Nigeria’s AgroEknor sources hibiscus, ginger and sesame from a network of 5,000 smallholder farmers, 70% of whom are women. It then processes and exports their products to Europe, Asia, and North America.
The company is one of an increasing number of African businesses looking to meet their growth capital needs locally. The company listed in February a five billion naira ($3.3 million) bond on the Financial Markets Dealers Quotation exchange.
It has raised 1.5 billion naira so far through the issuance. “There’s growing appetite among investors for high-impact, yield-generating instruments that are backed by real-sector operators,” AgroEknor’s Timi Oke told ImpactAlpha.
Small business bonds
AgroEknor’s bond was issued as “commercial paper,” a short-term debt instrument designed to help companies meet their working capital needs for anywhere from 15 to 270 days.
Such commercial paper is typically issued by “large corporations with good credit ratings and history,” including companies operating in Nigeria’s oil sector, according to the FMDQ Exchange.
“Access to strategic local currency funding enables businesses to grow sustainably, create impact, and compete globally,” wrote the team at Aruwa Capital, a Lagos-based investment firm with an equity stake in AgroEknor (see, Agent of Impact: Adesuwa Okunbo Rhodes). “AgroEknor’s achievement sets a precedent for how local financing can be leveraged to unlock the full potential of agribusiness in Africa.”
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