Apollo Agriculture closes $2.1 million local-currency securitisation in Kenya

Apollo Agriculture has closed a securitisation of KES 276 million, about $2.1 million, set against a receivables pool of KES 370 million, or about $2.8 million. Launchbase Africa reported on 7 May that IDH FarmFit is the anchor investor, taking the highest-risk position as a blended finance impact fund. The issue carries a BBB- rating from Agusto.

A first for Kenya

The deal is described as the first private-sector local-currency securitisation in Kenya's smallholder agriculture space. It is the first tranche of a planned multi-year programme that targets more than 130,000 farmers and aims to mobilise about KES 2.37 billion.

What Apollo does

Apollo lends to smallholder farmers for seeds, fertilisers and farming tools, and bundles inputs, credit and insurance. It assesses borrowers using machine learning, satellite imagery of farm plots and mobile field data. The current pool covers 23,839 smallholder farmers. Of the borrowers, 51% are women and about 22% are first-time borrowers. Eli Pollak is Apollo's CEO.

Why the structure matters

Proceeds let Apollo sell loan receivables and reissue credit in step with the farming season. The structure is meant to lower its cost of funds, move risk off its balance sheet and avoid foreign exchange exposure by lending in Kenyan shillings. Roel Messie, CEO of IDH Investment Management, said: "Building investable opportunities in agriculture requires both capital and enabling infrastructure."

At a glance

• Company: Apollo Agriculture
• Raised: KES 276 million (about $2.1 million)
• Round: Debt securitisation
• Anchor investor: IDH FarmFit
• Other supporters: Kaleidofin, FSD Africa, MOBILIST, British International Investment, Gates Foundation
• CEO: Eli Pollak
• Markets: Kenya
• Key figure: 23,839 farmers in the pool