The Netherlands Development Finance Company and Rabobank Foundation have extended a $500,000 (about Sh50 million) to Apollo Agriculture, a Kenyan startup that provides financial and technical assistance to smallholder farmers.
The former is a public-private bank also known by its Dutch acronym FMO while the latter is the “social fund” of the Dutch banking giant Rabobank, a leading food and agribusiness financier.
Apollo plans to use the funds to continue financing farming and improving techniques for gauging borrowers’ creditworthiness.
It also plans to expand geographical range within Kenya.
“Funding from FMO and Rabobank Foundation will allow us to expand our lending reach and will greatly accelerate our rate of learning. The more loans we extend and the more data we gather, the more effective our credit model becomes at predicting default,” said Apollo chief executive Eli Pollak.
Rabobank Foundation’s investment is a loan while FMO’s investment is a convertible grant, meaning it may acquire equity in in the future at no further cost.
FMO disbursed the convertible grant from the Massif Fund, which provides debt and equity primarily to small and medium-sized enterprises (SMEs).
The Nairobi based technology-focused firm operating in the agriculture sector was founded in 2015.
It offers smallholder farmers loans to finance the purchase of farming inputs such as fertilizer, seed, crop insurance and telephone consultations.
The consultations are based on satellite data combined with machine learning techniques to monitor the productivity of clients’ land.