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Impact Investing

How impact investing is shaping lives and businesses in Africa

The impact investing industry is growing fast with plan to makeover a trillion dollars’ worth of investments over the next decade according to JP Morgan research reported in “Business Ethics magazine”. Geared towards private investors, partners and sponsors, emphases are made that impact investing must take a balanced approach with other channels in a philanthropist's toolkit to have the greatest possible impact.

As a result, so much has been done around the globe with impact investing, even in Africa—businesses have reshaped, rebranded and new business have birthed.

The presence of impact investing in Africa is becoming more and more apparent as new grounds are broken and more opportunities unlocked: it has become impossible for the impact investing landscape not to be noticed nor its impact felt. The case studies below tell how much impact is being made particularly in Africa.

About 25,000 SMEs in Tanzania were able to access funds from “SME Impact Fund” yearly to boost their business environment after being trained with skills and knowledge to do so in a sustainable manner. As a result, SMEs were able to engage over 5,000 additional smallholder farmers (SHF) per annum which led to the creation of an additional 100 jobs per annum.

Many smallholder farmers in the underdeveloped rural areas of East Africa also benefitted indirectly from this fund as a result of higher production and higher demand from these SMEs. In addition, SME Impact Fund also promotes fair treatment of the SHFs by the SMEs and monitor payments to SHFs as well as their percentage of the end market price.

Through this credit facility, SMEs were able to increase direct and indirect employment, boost turnover and assets, improve working environment and also build a stronger relationship with their SHF partners while fostering sustainable development throughout the region.

Another case study in Tanzania is the Council on Smallholder Agricultural Finance (CSAF) which is aimed at strengthening food security in Tanzania through financing and capacity building for agro-processing firms. The council provided loans for Chamwino Super Sembe Supply Limited, a company which sources maize from smallholder farmers and processes fortified maize flour for domestic food
consumption.

In Tanzania, maize is the staple food for the majority of her citizens—a critical crop for food security. About 8 per cent of most maize in Tanzania is produced by small-scale farmers on a subsistence scale and also as a cash crop. Sadly, very little of the maize that is domestically grown is nutritionally fortified before it reaches the final consumers.

To change this story, Chamwino Super Sembe Supply Limited fortifies its flour (from milled maize) with iron, zinc, folic acid, and other vitamins which is then supplied to wholesalers, retailers, hospitals, colleges and school as well as government agencies across the country.

The company, which employed over 90 employees: 30 full-time staff and 40-50 part-time employees annually purchases and processes about 5,500 metric tons of maize sourced from 1,800 smallholder farmers, majority (60 per cent) of whom are women.

Through this fund, Chamwino was able to double its purchase and milling processes, into a new factory equipped with modern equipment and also expanded distribution of its fortified flour by adding six delivery trucks. d.light Design Incorporation, a global leader and pioneer power solutions company records another success story. Its impact investment traverses over the continent of Africa as it delivers affordable solar-powered solutions designed for two billion people in the developing world without access to reliable energy.

The power solution company makes high quality, affordable solar lanterns that are distributed world-wide with over half a million units delivered each month. This product has optimised work efficiency among other things as it delivers light to millions of individuals and families.

The products and services have empowered over 100 million lives and interestingly they pay less for solar lighting compared to traditional kerosene lanterns. In addition, the lighting allows for greater productivity and income generation as their customers
can work beyond daylight hours.

Another set of the major beneficiaries are the students, who with this product enjoy a better study environment even as their homes are safer and healthier without kerosene fumes. Put together, about 26 million students have benefitted from d.light power solutions.

The social and environmental impacts of this company have saved $4.1 billion energy-related expenses, over 22 billion productive hours created for working and studying and it has generated 221 gigawatts hour (GWh) of renewable energy. This is huge!

It is also important to mention the significant reduction in carbon emissions (CO 2) that this product was able to save the world as it offsets 23 million tons of CO 2 . The statistics above show that the social and environmental impacts of this company is
churning a good profit even as it is empowering lives all over Africa the same time.

As a result of the progress report and success story, d.light has won numerous certifications and awards with testimonies all over the world. It is also backed by an impressive collection of venture funds and foundations—all expecting to turn a profit
on their investments; as it must continue to meet rigorous standards of social and environmental performance, accountability and transparency.]

With the success stories of these case studies, we hope to see more investors come on board to explore the same opportunities to affect lives and make profit in Nigeria.

As we prepare for a post-COVID-19 intervention, this is a good start for any investor or company. In terms of agricultural and educational endowments, Nigeria is well blessed. There are over 300 tertiary institutions in the country including federal and
state universities, polytechnics, colleges of education and private universities, polytechnics and monotechnics.

From north to south, the country has arable land suitable for tuber and cereals. If success stories could be recorded in Tanzania, far better results will be achieved in Nigeria because of the better business environment and larger market.

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