- Borrower: YAK FAIR TRADE LTD
- Currency: EUR
- Amount: 125,000
- Maturity: 18 months, semi-annually and linearly amortizing
- Repayments: After 12 and 18 months (not after 6 months)
- Interest rate: 5.75% p.a.
This is a direct loan to a company (rather than lending to a financial institution) and therefore it is recommendable that you are careful with the amount you will invest.
Yak Fair Trade Ltd is a Rwandan agribusiness trade and livestock business (established in 2010) providing affordable and nutritious products (grains, meat and meat products), based in the Rwamagana district of the country’s Eastern Province. YAK sources indirectly from over 65,000 Rwandan small holder farmers through 52 cooperatives and processes them for sale to larger food processing companies.
One of YAK’s main clients is African Improved Foods (AIF), a public-private partnership involving DSM, Government of Rwanda, IFC, CDC Group and FMO, which locally produces highly nutritious foods for infants as well as pregnant and breastfeeding mothers.
Yak Fair Trade Ltd was founded by Janvier Gasasira and Mediatrice Uwingabire in 2010, initially focused on staple food value chain development including the processing and distribution of grains and wide variety beans and in 2010 expanded its offering to include dairy value chain development. YAK also owns shops in Kimironko Gasabo, Muhanga and Rwamagna districts for crop production.
Historically, YAK has purchased a minimum of 60% of its products from small holders farmers (via cooperatives) and hopes to increase the percentage of purchases from SHF through improved trade finance and capacity development of the farmers.
The loan will be used for the purchase and sales of seeds. With EUR 125,000 YAK Fair Trade is able to be purchasing at least 70,000 kg of hybrid seed. The current price is USD 2 per kg, YAK will be selling at USD 2.4 per kg.
YAK also acknowledges the need for earlier education at the cooperative level to improve farming methodologies and output. Yak train farmers on best practices as well as post-harvest technologies to avoid loss of production.
The company’s mission is to sustain the private entrepreneurship through sustainable development of supply chains of food to different clients.
To become a leading and prominent regional and international company in the food supply chain.
- Indirect benefit to the livelihoods of Rwandan small holder farmers & their families as YAK sources and purchases agricultural outputs, providing both a marketplace and higher prices than if individually sold
- Farmers benefit from training and market offered by Yak which contributes to poverty reduction
- Farmers can feed and educate their children
- Farmers can pay their health insurance.
Rwanda is a small landlocked country in east-central Africa with a population of 12 million. It is currently led by Paul Kagame who became president in 2000. In 2018, its GDP was US$9.5bn and it has steadily averaged high single digit GDP growth rates. Rwanda has been a leading engine in terms of trade openness and has one of the best business environments in Africa. Rwanda also has contained current account (-9% of GDP in 2018 vs -15.8% of GDP in 2016) and fiscal deficits (-2% of GDP in 2018), coupled with relative low debt levels (public debt c.42.5% of GDP in 2018).
High Growth Economy: The country has exhibited a high growth regime during the last decade, with some booms and busts but never with a major downturn. Growth recovered markedly from this low level, but was not immune to some imbalances in the past.
Attractive place for businesses driven by political stability: The World Bank’s Doing Business 2019 survey ranks Rwanda 29th out of 190 economies surveyed (including Developed Economies), making it one of the best-ranking African economies. Rwanda has made significant progress from the ethnic strife that led to the genocide & civil war in the nineties, with political stability among the key assets that has allowed a sustained reform momentum.
Agriculture is the main economic activity: Rwanda experiences a long dry season from June to August with heavy rainfall between end February and June (YAK’s main harvest period). Two-thirds of the population is engaged in the agricultural sector, generating c.30% of the national GDP. Tea and coffee are the major exports. Rwanda also exports dry beans, potatoes, maize, rice, cassava flour, maize flour, poultry and live animals within Eastern Africa.
Due to the strong link between agriculture and poverty, the challenges in the agriculture sector are also drivers of rural poverty. Despite remarkable improvements over recent years, the agricultural sector in Rwanda still faces many challenges such as land degradation, soil erosion, land fragmentation, strong dependence on rainfalls and vulnerability to climate shocks.