Acumen, a nonprofit impact investing firm channeling donations to social enterprises in South Asia and Africa, has made a $1.2 million convertible debt investment to KZ Noir, a Rwanda-based coffee processing company owned by Kaizen Venture Partners. This adds to the $1.5 million mezzanine debt facility made by Grassroots Business Fund, similarly an impact investing firm for emerging markets.
Both investments will provide KZ Noir the funds for working capital, debt refinancing, and capacity expansion.
Acumen says that this investment will be their first in Rwanda and the coffee sector. Coffee, with over 2.25 billion cups consumed worldwide on a daily basis, is an important commodity for the Rwandan economy and source of employment.
KZ Noir obtains coffee from over 10,000 smallholder coffee farmers in Rwanda and exports its products to buyers such as Starbucks, Sustainable Harvest, Mercanta, Stumptown, and Taylor of Harrogate. The company currently employs over 1,200 seasonal staff, of which over 800 are women, says managing director Gilbert Gatali.
Kaizen Venture Partners consolidated three coffee processing companies on the verge of bankruptcy to form KZ Noir. Under Kaizen’s leadership, KZ Noir was able to increase production and widen operating margins. Revenues topped $4 million in 2012.
“This investment presents a great opportunity to impact the livelihoods of small scale coffee farmers in Rwanda, while building a scalable and financially sustainable company” said Duncan Onyango, Acumen’s East Africa Director. Onyango says that Acumen has invested over $30 million in East Africa since 2007. Altogether, Acumen has invested over $83 million since its establishment in 2001.
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