IDH Farmfit Fund recently announced the close of a US $4 million loan facility to support CHC Commodities Limited (CHC), an agricultural service and processing company in Zambia.
Speaking after the announcement, Roel Messie the CEO of IDH Investment Management, noted that agriculture accounts for 20% of Zambia’s GDP, but despite the country’s abundant fertile land and rainfall, agricultural productivity remains low by global standards. “Two-thirds of the population live in rural areas and rely on agriculture for income; however, they’re challenged by poor rural infrastructure and minimal access to supplies or financial services,” he said. “Our loan to CHC will be instrumental in implementing solutions and empowering smallholder farmers to grow their businesses in a future-proof way.”
“We’re inspired by CHC’s commitment to improving its service delivery to smallholder farmers and creating more impact on the ground,” Barbara Visser, the COO of IDH Investment Management said. “The IDH Farmfit Fund is pleased to support CHC with this transformation through a long-term loan and data-driven insights and recommendations.”
The investment is aimed at helping CHC to reorganize its supply chain, build stronger logistics networks, and better supply Zambia’s smallholder farmers with resources required to grow their businesses — including training on climate-smart agricultural practices, environmental and social risk management, credible brokerage services, and transparent pricing. It is also expected to assist local farmers to be better equipped to safeguard against themselves broader negative impacts like deforestation, water availability, soil quality and child labour.
This IDH Farmfit Fund’s loan will bring the services of CHC, and its subsidiary Griffin Services Limited (Griffin), closer to the local farmers who most need support. The facility will be funneled towards the revolving purchase of agricultural produce closer to farmgate by CHC, funding core operational costs and stocking agricultural inputs and products at Griffin. Additionally, it will be used to roll-out and establish Griffin depots across rural Zambia, where food can be safely stored and farmers can purchase essential supplies. These storehouses will build upon the CHC’s existing, country-wide network of depots and buying points in areas like Mkushi, Kapiri Mposhi, Livingstone and Lusaka.
“Since its inception, CHC has been rooted in its passionate vision of agricultural growth and economic sustenance,” Beena Patel, the CEO of CHC Commodities said. “Through our partnership with the IDH Farmfit Fund, and with our subsidiary Griffin, CHC can leverage the proposed value chain to offer farmers a guaranteed market for their commodities. We’ll also improve operations, streamline buying processes and offer the farmers a much better and convenient service.”
On his end, Robert Coventry, Director of Griffin said that with the loan from the IDH Farmfit Fund, the team will begin improving the lives of rural farmers to instigate new systems for delivery of crop inputs, increased yields and routes to market. “The support from IDH will be pivotal in enabling Griffin to achieve the economies of scale to make this smallholder development project economically sustainable and, as a result, achieve long-term benefits for both the CHC Group and smallholder agriculture in Zambia. We look forward to a continued partnership with IDH and seeing Zambia’s farmers go from strength to strength,” he said.