EDFI AgriFI (AgriFI), the Agriculture Financing Initiative funded by the EU, and BIO, have invested the equivalent of €6m in USD in Alterfin, a Belgian social investor targeting smallholder farming in developing countries.

EDFI AgriFI and BIO each committed to finance the equivalent of €3m in USD.

“AgriFI’s senior unsecured loan of €3m should enable Alterfin to grow its portfolio mainly in Africa and Asia and should allow the organisation to provide financing to more than 25,000 smallholder farmers each year,” explained Guillaume Simões, AgriFI Investment Officer at EDFI Management Company.

Founded in 1994, Alterfin invests in microfinance and sustainable agriculture in Latin America, Africa and Asia.

Alterfin aims to improve the livelihoods and living conditions of socially and economically disadvantaged communities, predominantly in rural areas of low and middle-income countries.

It focuses both on the financing of the agricultural value chain via investments in SMEs and producers’ organisations and the microfinance sector.

To date, the Belgian cooperative involves more than 6,000 cooperative members, of which a vast majority are private individuals.

The cooperative is currently active in 38 countries, supporting sustainable agriculture by financing 15 agricultural value chains.

By doing so, Alterfin has a direct impact on more than 1 million smallholder farmers.

“Alterfin plays such an important role in Belgium by raising awareness and involving more than 6,000 private investors to support smallholders in developing countries. The proximity of Alterfin to its partners on the field and its capacity to offer flexible financial solutions when the market cannot answer the needs have impressed us. We believe that BIO’s 5-year term loan to Alterfin will provide it the necessary means to leverage its action and fully achieve its mission,” added Harold Grisar, Investment Officer at BIO.

In addition to fostering financial inclusion, the organisation is firmly devoted to sustainable farming. Out of all the SMEs and producer’s organisations supported by Alterfin 90% are certified organic and 80% have fair trade certifications.

Dimitry Van Raemdonck, AgriFI Manager at EDFI Management Company, said: “AgriFI’s investment will enable Alterfin to access long-term financing (over a 10-year period) in US dollars, which is essential to fuel its disbursement capacity towards SME’s and producers’ organisations but also to ensure a diversification of its portfolio.”

“Alterfin is a real catalyst for these organisations and allows them to attract not only other investors but also buyers. Through this focus on sustainable agriculture in developing countries, Alterfin helps fight poverty, create jobs, increase food security and reduce gender inequalities while respecting the environment,” he added.