The Role of Banks and Investment Funds in agri-SME Finance: A Conversation with Two Practitioners
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In the developing world, banks and private sector investment funds are two of the largest sources of capital for agricultural small and midsize enterprises (agri-SMEs). Banks are by far the farthest reaching, serving a large portion of the market through their branch networks. While having the potential to transform both local economies and food systems through agricultural financing, they often take too conservative of an approach to lending, have demanding collateral requirements, and tend to be focused on short loan tenors. Investment funds, as another option, can provide debt without requiring security and can also invest equity, but typically support larger transaction sizes, which can be problematic for SMEs that need smaller loans.
On December 19, 2023 at 9 am EDT, please join Marketlinks and the USAID Bureau for Resilience, Environment, and Food Security (REFS) for a discussion about how donor capital can be used to mobilize capital in agriculture through funds and banks. Moderator Songbae Lee from REFS will lead the discussion with Brian Milder, CEO of Aceli Africa, and Chris Isaac, CIO of AgDevCo, to examine the different impacts from supporting funds vs banks, e.g. supporting a higher volume of smaller transactions versus a lower volume of medium- to large-transactions and capital mobilization / leverage relative to impact and capital additionality.
Moderator
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Songbae Lee, Agricultural Finance Team Lead, USAID
Songbae joined RFS in 2020 as Agricultural Finance Team Lead, supporting USAID in its efforts to mobilize capital for agriculture. Before this role, he spent eight years at Calvert Impact Capital, a non-profit impact investing debt fund, where he was responsible for deal origination, credit assessment, and ongoing portfolio monitoring. Prior to that, he worked for Dresdner Kleinwort Wasserstein in their global energy investment banking group in New York City, Banc of America Securities in their real estate investment banking group in San Francisco, and Mercy Corps in their microfinance institution in Kyrgyzstan. He holds an M.B.A. from the University of Chicago and a B.S. from the University of Vermont.
Speakers
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Chris Isaac, Chief Investment Officer, AgDevCo
Chris is AgDevCo’s Chief Investment Officer (CIO) and one of the company’s founding directors. He has been working in development finance in Africa for the past 20 years, including periods living in Namibia and Mozambique. Prior to AgDevCo, Chris worked in infrastructure project development with InfraCo Africa; as an economic adviser in the UK’s Department for International Development; and as an economist in the Ministry of Finance in Namibia. He started his career with Arthur Andersen. Chris holds economics degrees from University College, Oxford (BA Hons) and the London School of Economics (MSc). He grew up on a hill farm in Carmarthenshire, South Wales.
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Brian Milder, Founder & CEO, Aceli Africa
Brian Milder is Founder & CEO of Aceli Africa, which partners with commercial banks and impact investors to increase lending to agricultural small- and medium-enterprises (SMEs) in Africa. Previously, he served as Chief Innovation Officer for Root Capital, designing and assessing the impact of approaches to financing agricultural SMEs in Africa and Latin America. He also co-founded, directed, and now serves as Senior Advisor for the Council on Smallholder Agricultural Finance (CSAF), an alliance of 20 impact lenders that promote industry standards and best practices for agricultural SME lending globally. He holds a BA in Social Studies from Harvard College and an MBA from Harvard Business School.
