Seven agribusiness SMEs from Rwanda and Kenya, have secured over $1 million funding from the Rockefeller Foundation’s Good Food Innovation Fund for the production and sale of affordable fortified and nutritious foods.

The Good Food Innovation Fund (GFIF) said that it selected seven enterprises that are revolutionising the availability and affordability of ‘good food’ in low-income communities in Kenya and Rwanda to receive funding and technical assistance to expand their operations.

The development was announced on September 6, 2022 in Kigali during the 2022 African Green Revolution Forum (AGRF 2022).

Kagwiria Koome, Food initiative manager at the Rockefeller Foundation, told The New Times that within the food chain, the foundation is focusing on increasing access to good food – the food that gives nutrients required, not just calories.

"For the Good Food Innovation Fund, our target will be to reach at least five million underserved populations with good food in five countries – Kenya, Rwanda, Burundi, Benin, Ghana,” she said, indicating that one of the best ways to reach many people with nutritious foods was through supporting SMEs engaged in their production.

Launched in 2021 with a $5 million grant from The Rockefeller Foundation, the GFIF supports small and medium sized businesses (SMEs) to expand access to nutritious and affordable food for low-income communities in Sub-Saharan Africa – while mitigating barriers such as high prices, consumer preferences, and unfavourable policies.

The fund is managed by Intellecap Advisory Services.

In the initial round, seven SMEs were selected to receive support. They will receive funding between $100,000 (over Rwf100 million) to $200,000 (over Rwf200 million) each, for a total of over $1 million. The funding consists of interest-free loan, and the repayment is between three and five years, depending on the operations of the company, according to Koome.

They include five from Kenya, namely Fibered Fresh Partners, Keep it Cool, Sanku Kenya Ltd, Shalem Investments, and Smart Logistics Solutions, and two from Rwanda, which are Agri Farmer Centre Ltd (Agriface) and Muteesa Company Ltd.

GFIF announced that it received 144 applications for this initial call for applications. Selection focused on small and medium enterprises (SMEs) with a special interest in promoting nutritious, regenerative, and equitably produced and distributed food—called "good food”—through schools and other institutional feeding programs.

Food fortification for improved nutrition

Also for improved nutrition among children, Koome said that they are seeking to scale up the consumption of biofortified beans, which are rich in iron and beans.

She said that most children in Rwanda were consuming a meal consisting of Kawunga (maize flour-based meal), and beans, mainly in the school feeding programme.

"But, the maize flour used is ‘super ordinaire’, but when you use ‘super ordinaire’, [it means] that the maize has been "stripped off its nutrients because the bran has been removed [through high agro-processing],” she said.

Yet, she said, it is in the bran where all the nutrients – the zinc, the fatty acids – are. The bran is largely made of the outer layer of the grain.

She said that they are supporting Muteesa company to produce whole-grain fortified maize flour [by adding required nutrients for a healthier diet] for school feeding, adding that the fortification will be done at industrial level.

Muteesa Company Ltd CEO, Thichien Nisunzimana, told The New Times the funding is expected to help the firm double its maize four production from two to three tonnes a week (to between four and six tonnes a week).

The company is based in Rusizi District, western province.

"With this financing, we will be able to buy equipment to produce more flour, get standard certification for our products, and access a wider market,” he said, indicating that this time, it will be fortified flour, which is more nutritious.

Explaining why the free-interest loan he got is important, Muteesa said that securing loans from financial institutions was a challenge for SMEs.

"Banks require collateral whose value is 120 per cent of the loan in question,” he said, suggesting that this requirement was prohibitive for SMEs’ access to finance.

Also, Nisunzimana expressed concern over the high interest rates charged by financial institutions.

Currently, the average loan interest rate from commercial banks in the country is 16 per cent, but microfinance institutions such as the Savings and Credit Cooperatives charge up to 24 per cent per year, according to the National Bank of Rwanda.

The above-mentioned SMEs have been selected at a time of growing food insecurity globally. In 2021, more than 282 million Africans were undernourished, and the ongoing Covid-19 pandemic, climate change, and the Russia-Ukraine conflict have fuelled further food price hikes—making access to affordable food even more difficult and threatening to send millions more into hunger.

"African businesses have a vital role to play in making sure that people, especially in low-income communities, have access to nutritious and affordable food,” said Mehrdad Ehsani, Vice President at The Rockefeller Foundation.

"Supporting them will improve efficiencies along the food supply chain, reduce the cost of production, increase their competitiveness, and enable them to reach low-income populations with nutritious food,” he observed.