Vital Capital has partnered up with the US Government’s Kenya Investment Mechanism to provide funding to Kenyan agri-businesses that have been affected by the Covid-19 pandemic.
Vital Capital is an impact investment private equity fund focused on companies in sub-Saharan Africa. “We are excited to launch this major collaboration to support Kenyan agribusinesses in what is an incredibly challenging economic environment,” said Nimrod Gerber, managing partner of Vital Capital.
KIM is a five-year program funded by the US Agency for International Development (USAID) to unlock financing to businesses that have been hit by the global pandemic.
Vital Capital and KIM are looking to execute at least five completed transactions that would provide at least USD 5 million in financing, to alleviate the strain of Covid-19 on Kenyan businesses and thereby sustaining 500 jobs.
“KIM’s goals are closely aligned with our own and we have a shared vision for the economic development of the agricultural sector in Kenya. We believe this collaboration has the potential to effect real change and support smallholder farmers survive the worst ravages of the COVID-related economic crisis,” commented Gerber.
Close to 27 per cent of households in Kenya are suffering from food shortages, according to a recent survey by the World Bank. In May, the Central Bank of Kenya flagged that around 75 per cent of the country’s SMEs could face collapse without funding from banks or equity partners.
According to Roger Bird, Kenya Investment Mechanism Chief of Party, the Vital team brings experience of creating positive sustainable impact that will be invaluable in creating enduring economic growth in Kenya. “Vital Capital was quick to recognise and fast to respond to the economic consequences of Covid-19 in Kenya,” he said.
The collaboration follows Vital’s launch of the Vital Impact Relief Facility in April, a USD10 million emergency loan facility that offers critical funding to African businesses to help them overcome negative economic consequences of the Covid-19 pandemic