AV Ventures, the impact investing subsidiary of ACDI/VOCA, has provided a long-term loan of US$700,000 to Maphlix Trust Ghana Limited, a leading producer and exporter of fresh vegetables, roots, tubers, and fruits in Ghana. These produce are sourced from Maphlix’s own farms and from a network of smallholder farmers in the Volta Region of Ghana. A Ghanaian entrepreneur with significant experience in horticulture, Felix Kamassah, founded Maphlix in 2013.
Maphlix will use the loan from AV Ventures to acquire new farming equipment that will mechanize production activities, as part of efforts to modernize production for enhanced operational efficiencies. The investment from AV Ventures will also support the expansion and automation of its irrigation infrastructure. This will increase Maphlix’s production capacity and ensure consistent product volumes and quality, which are key for retaining buyers in the horticulture sector. In addition, the investment will help Maphlix enhance its cold chain system to support the transportation of fresh produce directly from its farms to key distribution outlets. This will reduce post-harvest losses and extend the shelf life and quality of produce. The model is part of AV Ventures’ global efforts to invest in systemic change. Helping Maphlix modernize the Ghanaian agricultural sector via a business model that is inclusive of smallholder farmers will demonstrate the viability of such approaches and spawn replication.
– ZUBEIRU SALIFU, SENIOR INVESTMENT MANAGER, AV VENTURES
With the investment from AV Ventures, Maphlix will more than triple the volume of produce sourced from its outgrower network of nearly 200 smallholder farmers, comprised of 30 percent women. Through produce aggregation, smallholder farmers obtain premium prices and access to markets for their produce. The commercial relationship also enhances smallholder farmers’ access to high-quality farm inputs and training in best agronomic practices, which improves the productivity, incomes, and economic livelihoods of these farmers and their dependents.
The revenue-based structure of the AV Ventures loan shares risk with Maphlix and provides a flexible financing structure to support its growth and expansion needs. This type of investment product aligns with AV Ventures’ long-term strategy of providing innovative and catalytic capital to support growth-oriented small- and medium-sized enterprises. These enterprises make up the “missing middle” of investment, as they are often too large to receive microfinancing but too small to attract traditional investors.
– FELIX KAMASSAH, FOUNDER & MANAGING DIRECTOR OF MAPHLIX TRUST GHANA LIMITED
The expansion in production capacity will enable Maphlix to secure additional sales contracts with foreign-based customers, resulting in increased export earnings and import substitution of horticultural products in Ghana. This will contribute to strengthening of the local currency and building successful export businesses in line with the export-led growth strategy of the government of Ghana.
The strong commercial relationship between Maphlix and its smallholder farmer network demonstrates the viability of large-scale off-taker and producer partnerships. This type of partnership could be replicated in other agricultural value chains as a model for attracting inclusive private sector investment into Ghana’s agriculture sector.
This article was originally published by ACDI|VOCA.