April 11, 2022 - The Belgian Development Agency (ENABEL) and Entrepreneurs for Entrepreneurs (OVO) are joining forces to finance five innovative Benin companies. Given the status of the innovations, a creative mix of grants and social loans has been opted for.
Agriculture is a key sector for the socio-economic development of Benin. The sector employs 70% of the labour force and is the country's main source of employment, income and food supply. Among other things, the low level of financial and technological investment are major factors contributing to Benin's agriculture remaining in a self-sufficient situation rather than evolving into entrepreneurial agriculture.
Intending to improve the performance of Benin agriculture, Enabel launched the DEFIA program to develop entrepreneurship in the pineapple sector a few years back. Actions within this program are mainly focused on capacity building and financing productive investments.
Within the framework of this program, Enabel wants to valorize the waste generated during cultivation and after processing by commercializing it. Based on an entrepreneurial competition (Inno-Valorana), 5 projects were selected that use waste streams from pineapple production as raw materials. They are the following:
- Production of mushrooms from waste from pineapple processing by GEANT & CO;
- Manufacture of organic fertilizers based on pineapple residues by BIO LIFE;
- Production of pineapple powder from the pulp and dried core of pineapple by GABS BENIN;
- Manufacture of animal feed based on residues from the processing of pineapple by MOUSSCAL;
- Development of new agricultural machinery and materials to facilitate valorization of waste streams by NOTIC.
To support these projects, Enabel is working with several partners (companies and NGOs), including OVO. Over the past six months, through coaching and knowledge exchange, OVO has helped these companies become more sustainable so that they are now ready to invest further in the growth of these generally new activities.
In terms of financing, OVO and Enabel have worked out a specific, creative solution. Although the companies themselves have been active for quite some time, there is still a lot of uncertainty about the market potential or strategy for these new activities, so the repayment of any loan is not a given.
The financing will therefore be in two phases. Each company will receive through Enabel - after approval of the financial plan by OVO - a subsidy of about € 38,000 to reach the first phase of innovation. For its part, OVO will issue a letter of intent for further financing based on proven sales growth and additional investment needs. OVO offers affordable loans up to a maximum of € 50 000 and with a repayment period of up to five years.
By opting for mixed financing, OVO and Enabel can offer the companies support that takes into account the maturity level of the innovations and thus maximize the chances of success.