Bamboo Finance and Louis Dreyfus Holding have joined forces to launch and manage NISABA, a $50m impact investment fund focused on small- and medium-sized agribusiness enterprises (SMEs) in Sub-Saharan Africa.

As project sponsor, Louis Dreyfus Holding will invest $10m to seed the Fund.

Jean-Philippe de Schrevel, Bamboo Finance CEO, said this is a pioneer partnership that will merge multinational sector expertise with access to finance and impact investment know-how, in order to actively co-manage investments from pipeline to exit.

Bamboo Finance brings private equity experience, a successful track-record of investing in SMEs in frontier markets, and recognized leadership in impact measurement and management.

Through its controlling stake in Louis Dreyfus Commodities, Louis Dreyfus Holding has a 164-year-old global presence in the agribusiness sector, with expertise in a wide range of commodities, participation in various diversified businesses and a strong presence in Africa.

“This type of active collaboration represents an important milestone in the field of impact investing. We are excited to apply an integrated investment approach with a vast network of local expertise for the benefit of smallholder farmers and their communities, while demonstrating the value of impact investing,” de Schrevel said.

Despite its major potential, the African agribusiness sector has been facing numerous constraints that have discouraged long-term private capital to flow to SMEs.

This financing gap for SMEs in Africa, specifically in the agribusiness sector, is in part related to the mismatch between available capital and financing needs.

NISABA will target a balanced portfolio of countries, activities and commodities, and will invest in financing gaps across the agribusiness value chain in growth markets.

The focus will be on SMEs that combine social, environmental and financial returns by improving efficiency through access to data, finance and risk mitigation, training and technology innovation; strengthening market access by linking producers to end-consumers; and building local capacity through postharvest handling and storage, value-addition or processing solutions, among others.

The SME agribusiness sector in Sub-Saharan Africa represents untapped potential for investors and smallholder farmers alike to foster sustainable and inclusive economic development, while capturing the value of early-stage growth.

Margarita Louis-Dreyfus, Chairperson of Louis Dreyfus Holding, said: “Agribusiness development is at the crossroads of major challenges for Africa. With an estimated population of 2 billion by 2050, and 330 million young Africans expected to enter the labor market by 2025, global agricultural production is not keeping pace with population growth.”

“We believe that through appropriate financing tools like impact investing, the private sector must take an active role in addressing such challenges,” she said.