AgroMinds Africa Challenge Executive Director Steven Nhyira Odarteifio said the introduction of equity financing for agribusiness companies will be a game-changer for agribusiness finance on the African continent.
According to him, equity financing of agri-food businesses is a more sustainable way to ensure that agripreneurs on the continent have access to funds to grow and ensure the development of their businesses compared to the usual grants and borrowing facilities.
He said the AgroMinds challenge was a platform to connect agripreneurs with ready-to-invest investors to secure their business finances.
Speaking on JoyNews’ AM Show, Steven Nhyira Odarteifio said, “AgroMinds is pretty much an empowerment platform that supports agribusiness across Africa with equity financing for develop and develop agro-industries.
“And so we created a platform that brings equity investors into the space, they interact with these finalists or candidates who are full-fledged agripreneurs and they pitch to secure the financing of their businesses.
“So we’re moving away from the typical subsidy or debt facilities that most of the continent’s agro-industries are used to.
“We are introducing the concept of equity financing where an investor takes a share of your business and exchanges it for a percentage of ownership. And this is how we are trying to revolutionize the financing of agribusiness businesses across the continent by targeting youth-led businesses.
Further explaining what equity financing entails, IESO Agribusiness Consult management consultant Francis Osei said equity financing will ensure the growth of agribusiness businesses through risk sharing.
He said, “We know the problems we have had with the debt. You would go to a bank and there are difficulties especially with regard to agriculture. Sometimes you don’t get what you need, sometimes you don’t get it at all. If you are playing in the grant space, the people giving grants have their own amount and it may not even be what you need.
“In other jurisdictions, fairness is what keeps the business growing, as other people decide to share the risk with you. They go into the business with you and share the risks and of course the rewards.
He added that equity financing was the sustainable way forward for agribusiness companies in Ghana, given that banks and credit institutions were now risk-averse, especially when it came to the Covid-pandemic. 19.
“But if you look at the usual lenders, they are systematically becoming risk averse across Africa and it’s much worse in the Covid situation. And so this is the gap that we intend to bridge for young people in Africa who are engaged in agribusiness.