What is Impact Investing?
As the investments space becomes more global, inclusive, and sophisticated, investors are now able to access new frontiers. One of these is the opportunity to put their capital into industries that need funding and through which they can access substantial returns. This way, investors create desirable social and environmental outcomes while still being able to make money. This is the essence of impact investing.
Impact investing is a large contributor in the quest to find solutions for the pressing issues emerging economies face, such as poverty, food insecurity, and unemployment. Impact investing is characterized by its ability to generate a positive, measurable, and environmental impact alongside a financial return.
Impact Investing in East Africa
For Sub-Saharan Africa countries to achieve their development goals and economic independence, they require substantial financing, which their own domestic resources are insufficient to cover. Impact investing attempts to plug this deficit by channeling money into underfunded industries. Africa’s impact investors consist of fund managers, development finance institutions, institutional investors, high net worth individuals, and foundations.
According to the Global Impact Investing Network (GIIN), East Africa is a major hub for global impact investing, providing strong investment opportunities. Aside from SME lending, industries that are attractive to investors include agricultural aggregation, renewable energy, and mass-market consumer goods.
One of the major issues inhibiting impact investing initiatives is the poor linkage between sustainable social enterprise, innovation networks, and investors. There is a need for a party that links all three for there to be sustainable change. Endless Africa Limited, a Kenyan start-up involved in dairy, beef, and fodder production, seeks to be this link.
How Endless Africa Bridges the Gap in Farm Inputs and Market Access
The disconnect between farm inputs and market access for animal products presents an ongoing challenge for livestock farming in Kenya. To remedy this, Endless Africa offers research-driven solutions in cattle farming and invests in the off-taking of products. This increases yields and ensures efficient distribution, thus maximizing profits for investors. Fundamentally, the company unifies the process of production, value addition, and distribution of fodder, dairy, and beef products.
In the production phase, Endless Africa partners with farmers to increase the quality and quantity of milk and meat from cows by addressing challenges such as poor technology adoption in production, lack of finance solutions in agriculture, and flawed research and development. Additionally, Endless Africa is working to establish an animal feeds program that reduces the cost for farmers while still providing adequate nutrition. This further boosts yield.
The company also applies efficient and sustainable energy-saving technology using biogas. To help improve the processing and value addition phase, Endless Africa uses the latest technologies to process, store and distribute milk products, beef products, and fodder. Lastly, Endless Africa Limited plans to use milk ATMs, home deliveries, and supermarket circulation to oversee distribution and maintain quality.
Conclusion
For the investor, the benefits of partnering with Endless Africa are clear. Not only will they contribute to the production of quality dairy products, but they will also help to streamline the production process and improve the financial outlook for cattle farmers. Moreover, they will be able to earn a return from the sale of the value-added products in addition to diversifying their investment portfolios. Most importantly, they will play a role in creating lasting social and economic change in the region, which is the underlying motivation for impact investing.
