Africa focused fin-tech startup LendXS BV sells 21% stake to IDH to jointly accelerate smallholder financing

AFRICA – IDH Farmfit Fund, the catalyzing smallholder finance facility of IDH, has signed an agreement to acquire a 21% ownership stake in fintech scale-up company LendXS BV.

IDH is a sustainable trade initiative that restores flourishing markets with better jobs, better incomes and a better environment while LendXS, is a fin-tech start-up by the Financial Access Consulting Services BV (FACS), the former ING Bank emerging markets banking advisory subsidiary.

The investment marks the start of a unique collaboration that is expected to unlock access to credit for many farmers.

“LendXS will enable rural lenders to better assess the risk and lower the costs of providing credit to farmers. The IDH Farmfit Fund will be able to support these lenders with funding and risk mitigation.”

Roel Messie – CEO of the IDH Farmfit Fund.

An estimated 270 million smallholder farmers in the world live in poverty because they lack the financial means to invest in their farms to make them more profitable.

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Many financial Institutions are reluctant to invest in smallholders because of the perceived high risks. In return these risks drive up interest rates, making loans unaffordable for the majority of smallholder farmers.

“We are very pleased with the investment and partnership with LendXS, because it creates a synergy that is expected to unlock access to credit for many farmers.

“LendXS will enable rural lenders to better assess the risk and lower the costs of providing credit to farmers. The IDH Farmfit Fund will be able to support these lenders with funding and risk mitigation,” said Roel Messie, CEO of the IDH Farmfit Fund.

LendXS was founded in 2019 and has operations in Kenya, Ghana, Uganda and Cote d’Ivoire. The main objective of LendXS is to improve rural access to finance through affordable digital technology.

For the development of its digital solutions, LendXS has entered into a partnership with Incentro Africa Ltd, the Kenya-based affiliate of Dutch technology company Incentro BV.

“Few banks are willing to provide credit in smallholder farmers because of the high costs and credit risks. This is one of the vicious circles that keeps farmers poor.

“Transaction costs of smallholder finance accounts on average for around 60% of the interest rates charged. Our long-time experience with financial transactions, enables us to design fin-tech solutions and advisory services that bring down these costs significantly,” says Eelko Bronkhorst, CEO of LendXS.

The unique collaboration will improve Micro Finance Institutions’ bottom-line profits and will make loans more affordable for smallholder farmers, creating self-propelling change.

Further to that, the investment by the IDH Farmfit Fund brings LendXS to the scale that is needed to play this transformative role.

With the objective of contributing to better incomes of farmers in its supply chains, Investors in the IDH Farmfit Fund are the Dutch government, JDE Peet’s, FMO, Mondelēz and Unilever.DE Peet’s is one of the investors in the IDH Farmfit Fund.

The investment in LendXS is commodity agnostic, highly scalable and expected to benefit farmers in for instance the coffee supply chain at scale. In the foreseeable future LendXS aims to reach at least 280,000 smallholder farmers.

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