Tanzania: Grassroots Business Fund backs agricultural company
The Grassroots Business Fund (GBF), a global impact organisation that utilises blended capital to invest in traditionally under-financed businesses, has announced a $350,000 investment in Rainbow Haulage & Commodities Traders Company Limited in Tanzania.
This investment was made possible thanks to a four-year senior/ mezzanine debt facility which was extended to GBF under the SME Programme of the Trade and Development Fund (TDF), a TDB Group institution.
The strategic investment is aimed at supporting Rainbow in purchasing sufficient stocks to meet demand of its agri products across the East African region. It is also designed to help the company move beyond just buying and selling for farmers to a business model that addresses the challenge of fluctuations in supply. It will also help in developing a more consistent payment and cash flow regime for the farmers and the strengthening of the entire supply chain ecosystem.
The arrangement with GBF also brings in proven management experience built over the years managing similar ventures to help Rainbow improve its business structuring and performance in a model that may consider bringing in other key sector players, including micro-insurance services.
“Rainbow will benefit from GBF’s extensive experience in working with companies to improve management efficiency and stabilisation of its financial management systems. The switch from bank overdraft financing to medium-term cash flow-based funding by GBF will allow Rainbow to accrue benefits of consistent funding with repayments suited to its cash flow cycles,” said Lilian Mramba, GBF team leader in Kenya.
Established in 2008, the Tanzanian-based family-owned Rainbow business is led by Tausi Aloys Shaban and Jean Marie Rutambuka. Rainbow mainly trades in commodities, including maize, soybeans and sorghum, sourced directly from farmers in different parts of Tanzania and sold to companies in Tanzania, Rwanda, Burundi and in South Sudan. It sources the agri-products directly from farmers and aggregators followed by sorting, cleaning and packing for sale in local and export markets.
This investment in Rainbow continues GBF’s approach of blending structured mezzanine finance, with business advisory services.
In Kenya, GBF currently manages the Mastercard Foundation MSME COVID 19 Response Fund which provides emergency relief loans to members of the Kenya Private Sector Alliance (KEPSA), WomenWork Ventures and Kenya National Chamber of Commerce & Industry (KNCCI). The loans are managed in collaboration with its partners Cardno Emerging Markets and 4G Capital.
Are you seeking private equity or venture capital investment to grow your company? Africa Private Equity News now offers you the opportunity to connect with investors backing African businesses. Contact us at editor@africaprivateequitynews.com for our rate card and more information.