Rwanda

YAK Fair Trade 2

With EUR 250,000 Yak Fair Trade can buy more agricultural outputs (e.g. maize & grain from small holder farmers) and purchase equipment, like cold room storages, in order to expand its processing business.

  • Direct investment
  • 10 new jobs
  • 100 people reached
Issuer

€250,000

Amount

18 months

Maturity

5.75%

Annual interest
100%
Fully funded in 15 days on 31 July 2020.
+ 639 other investors

EN

IMPORTANT NOTE: high risk product - direct loan to an agribusiness company. No local financial institution in between to cover risks.

General information

  • Borrower:                           YAK FAIR TRADE LTD
  • Currency:                           EURO
  • Amount:                             250,000
  • Maturity:                            18 months, semi-annually and linearly amortizing
  • Repayments:                     After 12 and 18 months (not after 6 months)                  
  • Interest rate:                      5.75% p.a.


Direct loan

This is a direct loan to a company (rather than lending to a financial institution) and therefore it is recommendable that you are careful with the amount you will invest. 

Documentation

Information document of the issuer (NL)

Information document of the issuer (BE)

Summary

Yak Fair Trade Ltd is a Rwandan agribusiness trade and livestock business (established in 2010) providing affordable and nutritious products (grains, meat and meat products), based in the Rwamagana district of the country’s Eastern Province. YAK sources indirectly from over 65,000 Rwandan small holder farmers through 52 cooperatives and processes them for sale to larger food processing companies.

One of YAK’s main clients is African Improved Foods (AIF), a public-private partnership involving DSM, Government of Rwanda, IFC, CDC Group and FMO, which locally produces highly nutritious foods for infants as well as pregnant and breastfeeding mothers.

Yak Fair Trade Ltd was founded by Janvier Gasasira and Mediatrice Uwingabire in 2010, initially focused on staple food value chain development including the processing and distribution of grains and wide variety beans and in 2010 expanded its offering to include dairy value chain development. YAK also owns shops in Kimironko Gasabo, Muhanga and Rwamagna districts for crop production.

Historically, YAK has purchased a minimum of 60% of its products from small holders farmers (via cooperatives) and hopes to increase the percentage of purchases from SHF through improved trade finance and capacity development of the farmers.

Loan purpose

The loan will be used to allow YAK to buy more agricultural outputs, e.g. maize & grain from small holder farmers, and purchase of equipment (e.g. cold room storage) in order to expand its maize processing business.

YAK also acknowledges the need for earlier education at the cooperative level to improve farming methodologies and output. Yak train farmers on best practices as well as post-harvest technologies to avoid loss of production.

COVID-19 Update

Yak Fair Trade Ltd is an agribusiness company dealing with food sales and plans to continue to buy from smallholder farmers, especially during the crisis period. YAK follows the country regulation and protection measures for their staff as stipulated by the government.

Apart from complying with the Rwanda government’s instruction to protects its personnel, the Company has taken additional safety measures, by allowing only necessary movements, and have distributed protective equipment, to the staff that needs to move. YAK has also instructed its farmers to stay home and keep a minimum distance of 1.5 meters. When the Company goes to buy from the smallholders, it pays them with the use of mobile money without cash in hand to avoid contact.

YAK is committed to its mission of making food availability and ensuring the market for the farmers with fair prices.

Mission

The company’s mission is to sustain the private entrepreneurship through sustainable development of supply chains of food to different clients.

Vision

To become a leading and prominent regional and international company in the food supply chain.

Impact

  • Indirect benefit to the livelihoods of Rwandan small holder farmers & their families as YAK sources and purchases agricultural outputs (e.g. grains & maize), providing both a marketplace and higher prices than if individually sold
  • Farmers benefit from training and market offered by Yak which contributes to poverty reduction
  • Farmers can feed and educate their children
  • Farmers can pay their health insurance.

About Rwanda

Rwanda is a small landlocked country in east-central Africa with a population of 12 million. It is currently led by Paul Kagame who became president in 2000. In 2018, its GDP was US$9.5bn and it has steadily averaged high single digit GDP growth rates. Rwanda has been a leading engine in terms of trade openness and has one of the best business environments in Africa. Rwanda also has contained current account (-9% of GDP in 2018 vs -15.8% of GDP in 2016) and fiscal deficits (-2% of GDP in 2018), coupled with relative low debt levels (public debt c.42.5% of GDP in 2018).

High Growth Economy: The country has exhibited a high growth regime during the last decade, with some booms and busts but never with a major downturn. Growth recovered markedly from this low level, but was not immune to some imbalances in the past.

Attractive place for businesses driven by political stability: The World Bank’s Doing Business 2019 survey ranks Rwanda 29th out of 190 economies surveyed (including Developed Economies), making it one of the best-ranking African economies. Rwanda has made significant progress from the ethnic strife that led to the genocide & civil war in the nineties, with political stability among the key assets that has allowed a sustained reform momentum.

Agriculture is the main economic activity: Rwanda experiences a long dry season from June to August with heavy rainfall between end February and June (YAK’s main harvest period). Two-thirds of the population is engaged in the agricultural sector, generating c.30% of the national GDP. Tea and coffee are the major exports. Rwanda also exports dry beans, potatoes, maize, rice, cassava flour, maize flour, poultry and live animals within Eastern Africa.

Due to the strong link between agriculture and poverty, the challenges in the agriculture sector are also drivers of rural poverty. Despite remarkable improvements over recent years, the agricultural sector in Rwanda still faces many challenges such as land degradation, soil erosion, land fragmentation, strong dependence on rainfalls and vulnerability to climate shocks.

Management Team

Janvier Gasasira (CEO)

Mr. Janvier Gasasira is the current senior advisor to the business and holds the position of Chief Executive Officer (C.E.O.) of YAK FAIR TRADE Ltd.  He holds a master’s in development studies and project management acquired from Louvain La Neuve (Belgium) University in 2003.

Mr. Janvier Gasasira is a seasoned Rwandan agricultural sector expert, bringing with him over 26 years’ experience. Mr. Gasasira has strong leadership skills, is results and business-oriented,  over the course of his career, Mr. Gasasira has developed extensive knowledge of the agriculture sector, always ensuring sustained beneficiary engagement with smallholders, public institutions, the private sector, and civil society, from both a strategic and operational point of view. He contributed to impact assessment reports for five different projects under the Ministry of Agriculture and Animal Resources.

Mediatrice Uwingabire (MD)

The Managing Director of the company Mrs. Mediatrice Ingabire has experience of more than 10 years in the company, and she participated a lot in the expansion of its activities and the increase in its turnover. She has previously served as an accountant in King Faysal Hospital, where she worked for a period of 10 years. She holds a bachelor’s degree in business administration (Ao) acquired at KIM University.

Jean Baptiste Rwigema (COO)

Rwigema Jean Baptiste is a Senior Agriculturalist Engineer.  He has a general experience of 27 years, with 19 years of experience in project management. He has worked with YAK FAIR TRADE Ltd for more than five years. He holds a master’s degree in Soil and Water Engineering.

Thaddee Nsabimana

He holds a bachelor’s degree in Accountancy and is Certified Public Accountant (C.P.A). He has served in SOSOMA Industries for more than 20 years as an accountant and has four years of experience with YAK FAIR TRADE LTD.

Company nameYAK Fair Trade 2
CEOJanvier Gasasira
Founded2010-01-01
LocationRwamagana
SectorAgriculture
Turnover€2,800,000
Employees23

Impact of this project

  • With this investment 10 jobs are created
  • With this investment 100 people are reached

About the investment

TypeDirect investment
IssuerYAK
Funding target€250,000
Annual interest5.75%
Maturity18 months
Repayment periodSemiannually
CurrencyEUR
Terms and conditionsShow
Note termsDownload
Information document issuerDownload

About the risks

What are the risks of investing money?

Our local partners cover the risk of currency exchange rates and loan defaults. They do this by maintaining financial reserves for this purpose . In addition, there is an option to claim their equity if needed. While these measures are intended to minimize the risk to funders, our local partners face risks of their own that could effect their ability to secure a loan. These include: - bankruptcy - currency exchange rates - fraud - operational risks - political and regulatory changes - natural disasters or epidemics.

If you invest direct in a company, hence not via a local partner, risks of default are not covered. As the risk that comes with direct lendings is generally higher than an investment through a local partner, the interest rate is also higher.

There is also some operational risk at Lendahand. An example might be that Lendahand is unable to find shareholders to finance their activities. In such a case, Lendahand will handle outstanding loans at the best of its ability. At the same time, our ability to legally address non-payment from local partners becomes understandably difficult.

How does Lendahand minimize the risks?

Local partners must adhere to our mission and work with us to provide loans that are affordable. This insures that local entrepreneurs have access to financing that allows them to grow their business. A local partner must also have a track record. In other words, they must have proven themselves as a meso-credit provider for SMEs. This means (for instance) that the partner must have a solid credit portfolio, along with enough buffers and equity to compensate for unexpected downturns. We also check the organizational structure of the partner and how robust their (internal) procedures are. Finally, the loans that a local partner receives via Lendahand must be in proportion to the partner's total balance sheet. A healthy balance between effectuating influence and independence is crucial. If you would like to receive more information on the financial indicators we employ, please contact us via info@lendahand.com.

When currency exchange risks become too high for a local partner, Lendahand will urge the local partner to cover these risks. In some scenario's the local partner is contractually obliged to comply with these demands.

Lendahand will always conduct due diligence when a Company requests for a direct loan. To provide more insights on risks, an independent partie comes in to perform brief analysis on direct loans. The results can be downloaded on the project detail page of the direct loan. However, this analysis serves primarily as a tool for your own opinion and conclusion. Pay attention to the fact this analysis is not an investing advice.

Does Lendahand provide guarantee on the loans?

Normally we don't. Local partners take care of the repayment, even if (some) entrepreneurs are unable to do so themselves. If the local partner is for some reason unable to repay then there is a chance of partial or full loss of your money. For this reason Lendahand only selects financially solid partners based on strict criteria.

Also, for most direct loans no guarantee is provided. For these investments currency risks are covered however.

Sometimes - and only for some direct investments in Africa - our partner Sida, part of the Swedish government, will provide a guarantee with a maximum of 50%. If this is the case, it will be indicated explicitly.

Does Lendahand have a license or exemption?

Yes. The Dutch Authority Financial Markets (AFM) has provided Hands-on B.V. (with trade name 'Lendahand') in September 2016 with an investment firm license in accordance with article 2:96 of the Financial Markets Supervision Act (Wft). Placing orders on Lendahand's website is therefore an AFM regulated activity. Lendahand also meets its minimum capital requirements of EUR 125,000 following its license as required by De Nederlandsche Bank (DNB).

Lendahand uses an exemption from an approved prospectus that is available up to EUR 5 Million per year. 

How safe are my personal details?

We adhere to strict safety requirements with regards to private and payment details. All sensitive data is sent through an encrypted connection (https). Also, data is stored (encrypted) in a secured facility provided by AWS: the world largest hosting service. Customer documents can only be retrieved by a secured connection and multi-factor authentication.

What happens if the local currency devaluates?

Our local partners and Companies bear the exchange rate risks. We settle the loan, redemptions, and interest payments in euro.

Does Lendahand use a third foundation fund?

Lendahand works with Intersolve EGI: a Dutch financial institution that specialises in offering services in the field of payment settlement and electronic money. To be able to offer these financial services Intersolve EGI must comply with the applicable financial legislation. Intersolve EGI is therefore supervised by De Nederlandsche Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM) and is in possession of a license to act as an Electronic Money Institution (and therefore also has a license as a Payment Institution). Your money will be deposited on a protected and secure bank account until the project you have invested in has been fully funded. Intersolve in no way has access to these funds. Once the project is fully funded, the money is transferred to the local partner or company in question.

What happens with my money if Lendahand goes bankrupt?

If Hands-On BV (containing the brand name Lendahand) would go bankrupt trades between Lendahand and payment service provider Intersolve EGI would cease immediately. Intersolve will then transfer the funds in your personal wallet to your bank account (Note: if at this time the project you have invested in has been fully funded and the money has thus been transferred to the local partner, these funds will not be transferred back to your bank account). Intersolve will then in consultation with a trustee handle all repayments between the investors and investees up until the final repayment of the last project has taken place.

Additionally, Lendahand is part of the investor compensation scheme (ICS). This scheme aims to compensate individuals and small businesses who have trusted money and or financial instruments (such as notes or options) to a licensed bank, investment firm or a financial institution in case the financial firm is unable to meet its obligations arising from claims related to the investment service (in other words, if Hands-On BV is not keeping track of the acquired notes by investors in the Wge depot correctly). The ICS guarantees an amount of up to EUR 20,000 per individual. For more information, go to www.toezicht.dnb.nl/en/2/50-202210

Why is my money going via Intersolve EGI?

As part of the AFM license for investment firms it is required that operational activities carried out by Lendahand (maintaining the website, contracting of local partners, legal issues, etc.) are strictly separated from financial transactions (payments made through the website). Intersolve takes care of the payments. This collaboration offers you more security, since your money is placed on a protected bank account immediately after you have made your payment.

What happens when a local partner goes bankrupt?

When a local partner goes bankrupt, there will be a chance that you lose (part of) the amount you lend. Obviously Lendahand will try to recover outstanding payments, but the success rate will be limited in such situations. For the investor there is no possibility to take action against the financial institution. From a legal point of view the local partners are separated, therefore it is recommendable to spread loans across different local partners.

About YAK

Total assets€2,800,000
Revenue (per year)€2,800,000
Equity / total assets65.00%
Liquidity361.00%

We have already contributed for YAK Fair Trade 2

Willem van Wingerden
Eugene Cix
Gert Mosterd
Rita van den Berg
Bram Timmerman
+ and another
639
investors