Gawa Capital
Huruma Fund

Gawa Capital launched its third fund Huruma last year to support the financial inclusion of 100,000 smallholder farmers in Latin America, Asia and Sub-Saharan Africa through investments in MFIs (at least 70% of the portfolio) and Ag-SMEs. Access to financial services is critical for farmers to buy better inputs and equipment - and hence boost productivity - whilst increasing their resilience to external shocks. The fund not only provides longer-term capital to financial service providers, but also advisory support on best practices to serve the agricultural sector successfully. The management team has developed a sophisticated impact framework which is fully integrated in the investment decision-making, with a portion of their remuneration based on (audited) impact. It has also raised from the European Union a EUR 8m technical assistance facility to strengthen the “agricultural readiness” of investees, i.e. help the organisation adapts its business model to serve farmers (do they have people who understand the agriculture sector, does it understand the demand for Ag-finance, is there a risk management system suitable for agriculture, etc.). With a first-loss tranche provided by the European Commission and subsidised debt from FONPRODE, the fund offers a mix of high impact and reasonable risk.