by Jonna Bickel – LGT Impact Fellow 2016

As an agribusiness company specializing on high-quality crops like cacao beans, Kennemer Foods International enables small-holder farmers in the Philippines to grow cacao to earn a stable income. Kennemer provides its farmers with access to the newest cacao technology, high quality inputs such as seedlings and fertilizer, it trains them in the dos and don’ts in cacao farming and – once the harvesting stage is reached – ensures a guaranteed market for their produce. Kennemer has reached out to nearly 10,000 farmers so far – with more interested farmers ready to join every day.

Both starting a new cacao farm and ensuring high productivity of an existing farm are labor and input-intense. Farmers therefore need start-up capital as well as ongoing available funds to purchase fertilizer and other input materials which promote and protect their cacao trees. Especially small-holder farmers often do not have the financial means for such investments which limits their capacity to start a cacao farm and to take advantage of this opportunity to establish stable income sources.

To integrate access to finance into the support services to their farmers has therefore been a crucial step for Kennemer in its aim to empower small-holder farmers by opening up opportunities which can in the long-run increase their annual income 5-fold. Kennemer thus collaborates with public as well as private banks and financial service providers in the Philippines to provide medium – and long-term loans for its farmers. In order to meet the increasing demand from farmers to access financial services which match the crop-cycle, Kennemer in 2015 decided to start its own dedicated finance company which should provide short-, medium- and long-term financial products with an advanced product design specially tailored to new and existing cacao farmers.

In early 2016, I joined Kennemer Foods International as an LGT Impact Fellow to support the team in their endeavor to establish this new finance company. Having worked as an advisor in micro- and rural finance for the past 10 years, this was a great opportunity for me to apply my knowledge hands-on and immerge into setting up a new company and initiating its operations. I spent the first months of my fellowship designing the products and processes of this new finance company. This included learning from Kennemer’s experience by means of an intense exchange with Kennemer’s field and management staff as well as with farmers directly. At the same time, we needed to apply for the company’s license and secure funding for our operations. In July 2016, Agronomika Finance Corporation finally received its license from the “Securities and Exchange Commission of the Republic of the Philippines”, the official regulator for finance companies in the country.

For the following months I was fully occupied with hiring a local team, developing front- and back-end processes and procedures, integrating a software to support the financial transactions, designing marketing materials, training Kennemer’s field staff as well as identifying potential borrowers . Finally, in October 2016, we were fully operational and started disbursing the first loans to farmers. By December 2016, the official end of my 11-months-fellowship, Agronomika Finance had already financed 40 farmers establishing 170 new hectares of cacao across Mindanao.

Besides meeting the huge demand for financing new cacao farms and providing seasonal loans to already existing cacao farmers, Agronomika Finance also faces the demand to expand its services to other crops as well as to other financial products essential for rural communities in the Philippines and thus providing more farmers and their families with the opportunity to improve their living conditions.

Jonna & her team visiting a potential farmer who is interested to intercrop banana and cacao with a loan from Agronomika Finance

Jonna with team & Kennemer field staff visiting farmers’ house to explain about Kennemer’s growership programme and Agrononomika’s loan product

Jonna & her team signing loan contracts with farmers starting a new cacao farm