The MasterCard Foundation and One Acre Fund today announced a $10 million partnership that will expand access to financial services and training for smallholder farmers in Kenya, Rwanda, and Burundi. The project will enable 181,000 additional poor farm households to improve their farming techniques, and ultimately double their farm profits on every planted acre. The partnership will result in increased capacity and strengthened systems to serve a greater number of rural smallholder farmers, and employ over 770 additional people as One Acre Fund field staff. The partnership will also help pioneer a new sector of microfinance, increasing the interest and commitment among microfinance institutions to expand successfully into rural areas.
Founded in 2006, One Acre Fund has designed and proven an innovation that enables Africa’s poorest farm families to grow more food for consumption and sale in local markets. The organization’s model provides farmers with a comprehensive “market bundle” of services delivered to their doorsteps, including high yielding seed and improved fertilizer for staple crop production, financing through in-kind loans, on-farm weekly trainings, and post-harvest assistance through improved storage and market facilitation. One Acre Fund also continuously pilots and tests adaptations to their current model to provide, on credit, additional life-improving products and services to their clients, such as solar lights and tree seedlings.
Since 2006, One Acre Fund has achieved increasing success across its three core metrics. The organization has steadily increased its scale, and now serves 135,000 farm families across Kenya, Rwanda, and Burundi. It has improved its financial sustainability annually; in 2012, farmer loan repayments covered 84% of field expenses. Importantly, One Acre Fund has achieved high impact with every farm family served: on average, doubling farm profits on every planted acre.
According to One Acre Fund’s founder and CEO Andrew Youn, the need for farm microfinance is vast. “We believe there are as many as 50 million extremely poor African households in high-density, agricultural areas across Sub-Saharan Africa that could benefit from finance,” Youn explains, “yet less than 10% of these farmers have ready access to this powerful development tool. One Acre Fund is honored to be partnering with the MasterCard Foundation, a world leader in financial inclusion for the extreme poor, to help shape the emerging rural, agricultural finance movement on a global scale.”
“Agriculture and agri-business hold tremendous potential to help more people in Africa improve their quality of life,” said Reeta Roy, President and CEO of The MasterCard Foundation. “Our partnership with One Acre Fund will help us understand the complex realities and opportunities for providing productive financial services to smallholder farmers.”
Through its partnership with the MasterCard Foundation, by 2016 One Acre Fund will grow to directly serve 450,000 farm families across its current countries of operation – Kenya, Rwanda, and Burundi. The organization will also strengthen its core MIS and M&E systems, to enable continued improvement to its program design and greater cost efficiency in its operations, and to capture the most accurate and compelling evidence of impact. Finally, One Acre Fund will actively share its knowledge across the sector – through targeted knowledge dissemination and the establishment and publication of core principles for rural, agricultural lending. To this end, the project seeks to build a definitive “proof of concept” for farm microfinance: demonstrating that it can be accomplished at high impact, sustainably, and at scale, and thus increasing commitment among microfinance institutions to expansion in rural areas.
I’m highly touched by the benevolent actions of one acre fund foundation. Excellent work, keep up!