One Acre Fund raises $1.4m from Impact Bridge to finance agricultural products

One Acre Fund has raised $1.4 million (£1million) from Impact Bridge Asset Management, a Spanish fund manager founded in 2018 and specialized in social impact investing, via its IB Impact Direct Debt, a €50m fund aimed at financing social and environmental impact companies in developing countries.

Based in Kenya, One Acre Fund supplies smallholder farmers with simple interventions like providing access to naturally-produced hybrid seed, quality fertilizer, and training on farming best practices to get them out of poverty and feed their families and communities, improve their nutrition and increase their incomes. 

Working with family farms in rural areas, One Acre Fund ensures that smallholder farmers build resilience for their communities and for the environment through climate-smart farming and programs like tree-planting initiative, a farmer-led movement with the goal of planting 1 billion trees over the next 15 years. One Acre Fund offers a comprehensive tree package that supplements seasonal harvests, providing stability for farmers and at the same time empowering them to help protect the environment. Its farmers can use mobile phones to make loan repayments, sign up for products and services, view trainings, and more and has rolled out the use of USSD text messaging-based service for farmers to access services and market information straight from their phones.

IB Impact Direct Debt fund has already raised €15m from a range of international investors, including pension funds, family offices and foundations and around 80% of the fund would be invested into developing countries focusing primarily on sub-Saharan Africa and Latin America to improve access to basic services, climate change mitigation and adaptation, women’s empowerment, decent job creation and financial inclusion.

Apart from One Acre Fund, the fund has invested €3m into a blue bond issued by the International Bank of Ecuador and backed by the International Finance Corporation. The fund plans to make between 15 and 20 investments at an annual return of 4% to 6%.

Speaking about the fund’s investment into One Acre Fund, Impact Bridge’s CEO Arturo Benito said, “At the beginning of the season they provide farmers with an in-kind loan of seeds, fertiliser and other farming tools as well as micro crop insurance. Once the crops have been harvested they also help them introduce their products to market. They then collect the value of the in-kind loan plus the interest.”

One Acre Fund, launched in 2006 in Kenya has trained farmers in sustainable farming techniques, including planting a diversity of crops and microdosing of fertiliser, provides farmers with naturally-produced hybrid seed and training, including advice on planting techniques and soil and crop health and also provides services such as credit and crop insurance to protect farmers against drought and flood as a result of climate change.

One Acre Fund now employs around 8290 staff globally and in 2023 served 4.8 million farmers, the social enterprise aims to serve 10 million farmers by 2030, which it says is 10 percent of the families in the world living on less than $1 per person, per day.

“One Acre Fund help farmers plant a variety of plants to reduce reliance on monocrops and use research to try to understand which plants and which combination of plants are better for each region. They also encourage the use of techniques such as microdosing that are better for the farmers’ pockets as well as the environment,” concluded Benito.

Last year, One Acre Fund received $2.5 million in unrestricted funding as the 2023 recipient of the Conrad N. Hilton Humanitarian Prize and launched One Acre Fund Re, designed with the support and partnership of the International Finance Corporation (IFC), U.S. International Development Finance Corporation (DFC) and African Risk Capacity (ARC) to provide a critical financial safety net for millions of smallholder farmers. One Acre Fund Re aims to improve the insurance offering for farmers in the face of devastating impacts on crop yields and aims to cover at least 4 million farmers by 2030, with a range of insurance products.

In May 2024, One Acre Fund received $10 million in funding from Proparco to enhance food security in Africa by offering agricultural resources, financing, and training for increased food production and prosperity. The organization presently aids over one million farmers across nine African countries including Kenya, Uganda, Tanzania, Rwanda, Burundi, Ethiopia, Malawi, Nigeria and Zambia.

In July 2024, One Acre Fund partnered Global Parametrics, a CelsiusPro Group company to provide financial protection for smallholder farmers in Zambia and Malawi against the financial loss incurred due to crop loss in drought. The two firms developed a water-balance index to calculate payouts.