A farmer tends to his tomatoes. Because of the risks in the agricultural sector, including climate change, many farmers were not able to get finance. Now several non-profits have come into the market to assist. Credit: Geoffrey Kamadi/IPS

By Geoffrey Kamadi
NAIROBI, Oct 30 2023 (IPS)

Smallholder agricultural enterprises in Africa face a lot of challenges getting loans from financial institutions like banks due to the stringent requirements they can hardly fulfil. Investor confidence is usually lacking, given the risks involved in this sector of the economy.

Climate change has not helped matters either. Prolonged droughts and unreliable rainfall patterns have made them less resilient. And since a paltry 1.7 percent of climate finance goes to small-scale agriculture (according to the Climate Policy Initiative), small-scale farmers are left particularly vulnerable.

However, innovative financial solutions targeted at these farmers are transforming the sector in tangible ways in Africa. Organisations like Root Capital are working with small-scale agricultural enterprises using a financial model that is accommodative to their unique needs while addressing the climate change component on the ground.

Root Capital is a nonprofit that supports agricultural enterprises working directly with small-scale farmers. On the other hand, Mercy Corp – an international NGO – through its venture capital arm, supports entrepreneurs who are developing transformative technologies, innovative business models and effective climate adaptation resilience solutions which are usually tech-enabled.

Users of these technologies are in 35 most climate vulnerable countries, according to Scott Onder, the chief investment officer at Mercy Corp. In Kenya, for example, the NGO has partnered with Safaricom, the largest mobile network operator in the country through its DigiFarm product.

The product bundles together a range of solutions for smallholder farmers, helping them become more productive, increase their yields and grow their income.

Batian Nuts Ltd, an edible nuts processing enterprise based in Meru County in central Kenya has seen its operations expand, ever since it started working with Root Capital. This enterprise exports macadamia nuts internationally but also deals in peanuts processing for the local market. It has a base of 8,000 small-scale farmers.

“We chose to work with Root Capital because their interest rates are below what you would normally get from the financial market, plus their terms are very accommodative to a start-up like ours,” says James Gichanga the co-founder of Batian Nuts Ltd.

He explains that commercial banks require considerable collateral, such as parcels of land or other assets, which they do not have.

On the other hand, Root Capital will provide the finances they need, based on the commitment made by the overseas buyer of their produce. The buyer need only provide a letter of intent, committing to purchase macadamia nuts from Batian Nuts Ltd, and “Root Capital will give us money based on that alone,” says Gichanga.

In other words, the buyer of farm produce based in the US, Europe or Asia and the borrower (it could be a coffee cooperative in, say, Rwanda) – or Batian Nuts Ltd in this case – signs an agreement with Root Capital. And when the time comes for payment, the buyer pays Root Capital directly.

“We take our principal interest and then pass the rest of the payment to the coffee cooperative,” explains Elizabeth Teague, the senior director of Climate Resilience at Root Capital.

Even though this type of financing has existed before, their innovation involves applying it to the smallholder agricultural context. This, explains Teague, is a way of mitigating risk without requiring collateral from smallholder farmers.

In addition, they provide small and medium sized agricultural enterprises with technical assistance through a programme known as “agronomic and climate reliance advisory.”

Prior to its partnership with Root Capital, Batian Nuts Ltd used to handle between 300-400 tonnes of produce per year. However, since 2017 when the collaboration begun, the business has more than doubled this capacity to 1,000 tonnes, and its workforce has grown from 26 permanent employees to 55 currently. Its seasonal workforce has increased as well from a couple dozen to 160, who are engaged seven months in a year.

Investors have traditionally shied away from putting their monies in small-scale farmers in sub-Saharan Africa, due in large part to higher cost and risk involved, thus creating an estimated USD 65 billion financing gap for small businesses in the region, according to Teague.

“And then climate change exacerbates that and makes it even riskier for investors,” she adds.

Root Capital works with a network of 200 businesses and 500,000 farmers in Africa, Latin America, and Indonesia.

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Patients outside the Mycetoma Research Center in Sudan. Credit: DNDi

By Geoffrey Kamadi
NAIROBI, Apr 7 2023 (IPS)

The disease burden and distribution of mycetoma—a neglected tropical disease—are not very well understood. However, it is known to affect people in Sudan, Senegal, Mauritania, Kenya, and Niger, as well as people in Nigeria, Ethiopia, India, and Cameroon. Cases have also been reported in Djibouti, Somalia, and Yemen.

“It is currently unknown what the incidence, prevalence and the number of reported cases per year per country is,” observes Dr Borna Nyaoke, head of the Mycetoma Program at the Drugs for Neglected Diseases initiative (DNDi) – Africa Regional office. DNDi is a not-for-profit international R&D organisation operating in Kenya, Ethiopia, Uganda and Sudan.

Mycetoma is one of a group of 20 diseases referred to as neglected tropical diseases or NTDs in short. These diseases usually affect marginalized and poor communities.

NTDs are caused by viruses, bacteria, fungi and toxins from snake bites. They affect 1.7 billion people globally.

According to the Centres for Disease Control and Prevention, mycetoma is caused by certain types of bacteria and fungi found in soil and water. Mycetoma can be caused by bacteria (actinomycetoma) or fungi (eumycetoma).

For years now, little attention has been directed towards NTDs in terms of research and the development of new treatments, hence their neglected categorization status.

Between 2000 and 2014, only 66 novel products entered phase I clinical trials intended to prevent or treat NTDs, according to Dr Maurice Odiere, head of the Neglected Tropical Diseases Unit, Centre for Global Health Research at the Kenya Medical Research Institute (KEMRI). This represented just 1.65 percent of all 4,006 phase I trials in the world.

However, this has changed over the last couple of years, with concerted efforts producing new drugs and research initiatives.

For example, the world’s first randomized double-blind clinical trial on eumycetoma (fungal mycetoma) was completed last year in Sudan, according to Nyoke.

“We were comparing the investigational drug Fosravuconazole against a treatment against Itraconazole, which is the standard treatment of eumycetoma in Sudan,” she explains.

This clinical trial started in 2017 in Khartoum, Sudan, with phase II clinical trials completed in March 2022, and the top-line results were presented in September 2022. The clinical report is under review and is expected to be finalized later in 2023.

The study was conducted in Sudan because it is one of the countries where mycetoma is endemic.

Expensive Toxic Treatment

The existing treatments for eumycetoma, such as the antifungals Ketoconazole and Itraconazole, are expensive, ineffective, and have serious side effects. Patients oftentimes undergo multiple amputations, which may prove fatal.

However, scientists think that Fosravuconazole, a drug developed for onychomycosis (a fungal nail infection), could offer an effective and affordable treatment for eumycetoma, hence the study. The drug’s interaction with body tissues is said to be favourable, and its toxicity levels are low. Lab tests show its activity against agents causing eumycetoma to be effective.

Mohamed Safi Ahmed El-Safi, who hails from the Kordofan region of Sudan, is a survivor of mycetoma. Initially, he did not think much of what appeared to be a pimple on his toe.

However, he would soon seek medical attention when he began experiencing excruciating pain emanating from the toe.

“The infection and pain increased, giving me a fever. My body felt like I was on fire,” recounts El-Safi.

Medical tests later revealed that the infection had spread to the bone. His lower right leg had to be amputated as a result. He now urges people to immediately seek medical attention once they notice a boil or pimple on the leg.

Mycetoma Research Centre (MRC)

Sudan boasts of the Mycetoma Research Centre (MRC) in Khartoum, which was established in 1991 under the auspices of the University of Khartoum, which is based at Soba University Hospital.

“It is the only referral hospital in the country, providing integrated medical care for mycetoma patients as well as training for medical and health professionals,” says Nyaoke.

Not only does the centre receive patients from within Sudan, patients from across Africa and the Middle East are referred to the Centre as well.

Nyaoke maintains that plans are underway to conduct epidemiological studies in Sudan, Senegal and India, among other endemic countries, to gather information on the burden and distribution of disease.

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