The Global Social Impact Fund (GSIF) that we manage from Global Social Impact Investments (GSII) focuses geographically on sub-Saharan Africa and, more specifically, on the eastern part of this vast region. Our target investments are in countries such as Uganda, Kenya, Rwanda, Tanzania and Zambia, to name but a few in that region. In this geographical area, almost 70% of the population lives on less than $2 a day.
In this second piece, I wanted to talk to you about ACPCU, the second investment we've made in the GSIF fund, specifically in Uganda, an investment that remains active and in a way reflects how we understand impact investment at GSII, and of which we are deeply satisfied.
To help you get your bearings, Uganda is a country with a population slightly smaller than Spain's (almost 43 million inhabitants), occupying an area a little less than half the size of Spain. Its per capita income stands at 643 dollars (2018), almost 48 times less than Spain's. We are therefore looking at one of the poorest countries in the world.
Could you please provide more context for ACPCU? It's not a widely recognised acronym, and its meaning can vary greatly depending on the field or organisation it refers to.
ACPCUAnkole Coffee Producers Co-operative Union Limited) is an agricultural cooperative operating in southwestern Uganda. It is a limited liability company that provides access to international markets, primarily for coffee, to over 12,000 smallholder farmers established in western Uganda.
To put the project into context, agriculture employs approximately 69% of the working population in Uganda, 77% of whom are under 30 years of age. The vast majority of these farmers typically have access only to low-quality seeds and lack the training, skills and tools needed to cultivate the land. Generally speaking, they have no insurance or other means of protection against pests or droughts. Nor do they usually hold international certifications, and their produce is sold to small local middlemen.
Our relationship with ACPCU began in April 2019, with the granting of a loan amounting to 500,000 dollars. Subsequently, one year later, the credit was increased to 750,000 dollars. The company uses our credit to finance agricultural campaigns, facilitating its growth in operations and financing working capital requirements, which allows for the acquisition of coffee for processing.
ACPCU is currently made up of 21 primary cooperatives, each comprising between 300 and 800 smallholder farmers. All members of the organisation hold fair trade and organic product certifications. ACPCU is playing a very important role, offering a fruitful, reliable and sustainable market to its associates.
What is the social impact of ACPCU?
This agricultural co-operative provides a lucrative market for its more than 12,000 smallholder members by paying a price for coffee year after year that is higher than in previous years (an average increase of 17% over the last four years) and offering its members more than 43% above the average price received by farmers who are not members of ACPCU. Furthermore, it improves its members’ productivity compared with competitors, thanks to the training and support they receive, which in turn leads to an increase in their income.
Through the profits generated by ACPCU, investments are made in the rural areas in which it operates. The following are noteworthy in recent years: the construction of a medical centre to treat illnesses such as malaria, typhoid fever, diabetes, and high blood pressure. The establishment of paediatric or maternity care rooms, a scholarship and aid programme for the families of its associates with good academic records and low incomes, the renovation of educational centres, and the construction of several wells to improve access to drinking water.
The Ugandan cooperative also contributes to improving efficiency and productivity throughout the entire production process, both internally and for its associates. Thanks to its activities, international fair trade and organic production certifications have been obtained, which in turn result in better selling prices and greater access to international markets, reducing intermediaries and improving margins. Furthermore, existing facilities for product processing have been improved and tools and machinery have been provided to its associates, offering them training in good agricultural practices and even financial education.
Ultimately, ACPCU has provided over 100 direct jobs and hundreds of indirect jobs in the areas where it operates.
Just as in the case of the inverted Let's go, At ACPCU, we periodically monitor the evolution of indicators that we consider key, and that are easy for our investee to measure. From GSII, we are extremely satisfied with the social impact of these two investment projects, but also with the financial performance and the professionalism demonstrated by their managers in the context of a pandemic characterised by a thousand difficulties in carrying out activities normally, and in which both companies have emerged much strengthened and have demonstrated their solidity and resilience.
We continue to look for more TUGENDEs and ACPCUs to invest in.
