Ground Up Investing, the impact investment arm of development organisation Corus International, has raised $6mn in the first close of a $20mn fund targeting agricultural businesses in Africa and Latin America, seeking to increase smallholder farmers’ incomes by improving access to finance for rural enterprises.
The fund will provide two-year working capital loans to agricultural small and medium-sized enterprises in Kenya, Uganda and Rwanda, as well as Colombia, Peru and Ecuador. These businesses purchase crops from smallholder farmers, connect producers to markets and create jobs in rural communities.
The fund targets businesses seeking loans of between $250,000 and $1mn, a financing gap that Ground Up Investing says leaves many agricultural enterprises underserved by microfinance institutions and conventional commercial investors.
The investment strategy focuses on businesses that can strengthen local food supply chains while increasing the share of agricultural value captured by farmers. Ground Up Investing expects its second fund to improve land management across more than 20,000 acres and generate $200mn in additional farmer income, equivalent to $10 for every dollar invested.
Mark Muckerheide, chief executive of Ground Up Investing, said the fundraising reflected growing confidence in agricultural businesses and the role they play in rural economies.
“Over the past several years, we’ve seen firsthand that when agricultural enterprises gain access to capital, farmers earn more income, businesses grow and communities become stronger,” he said.
The fund’s longer-term ambition is to generate $1bn in farmer income over the next decade, Muckerheide added.
The second fund builds on the results of Ground Up Investing’s first vehicle, launched in 2017. According to the organisation, the initial fund invested $5mn in 15 agricultural businesses that have collectively paid more than $50mn to farmers, created over 800 local jobs and improved land management across more than 50,000 acres.
One of its investments, Ugandan coffee company Mountain Harvest, sources coffee from more than 3,000 farming families and pays them a 30 per cent premium, Ground Up Investing said.
The fund’s expansion comes as agricultural enterprises across African markets face financing constraints despite their role in connecting smallholder producers with buyers, processors and export markets. Working capital is particularly important for businesses that must purchase crops from farmers before receiving payment from downstream customers.
By financing these intermediaries, Ground Up Investing aims to support a broader rural economy rather than provide capital directly to individual farmers. The model depends on agricultural businesses using the financing to expand purchases, improve market access and sustain payments to producers.
Ambassador Daniel Speckhard, president and chief executive of Corus International, said local entrepreneurs could create economic opportunities extending beyond individual businesses.
“Ground Up Investing has shown that when capital reaches local entrepreneurs, it creates opportunities that extend throughout entire communities,” he said.
Corus International, based in Washington, established Ground Up Investing in 2017 to provide impact-focused financing to agricultural businesses that often struggle to secure funding from traditional lenders and investors.
The fund’s projected $200mn in additional farmer income is a target rather than a realised outcome. Its eventual impact will depend on the businesses’ performance, their ability to expand operations and whether higher commercial activity translates into sustained increases in farmers’ earnings.
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