Story: Unlocking sources of capital (en)
Dana Siedem and Shakeel Padamsey run a business in Uganda. They are entrepreneurs with a vision. With faith in a community of local farmers, Dana and Shakeel co-founded The Coffee Gardens in Mount Elgon region in the country.
Volcanic soil and the high altitude of the region in the eastern part of Uganda makes it one of the best areas for growing specialty coffee.
The company produces specialty Arabica coffee that holds a tremendous potential for international trade.
It sources coffee cherries directly from around 400 smallholder farmers in the district. This way, coffee can be traced back to producers, which helps in keeping quality checks and sharing rewards with farmers.
Ever since The Coffee Gardens began operating in 2017, it was clear that Dana and Shakeel would have to explore actively all the options to secure additional financing for the growing needs of the business.
As is the case with most growing businesses, The Coffee Gardens had to meet increased demand for the product, invest in new machinery and equipment and find innovative digital solutions in order to remain competitive. The company needed to tap into additional sources of working capital to be able to pay farmers on time and ensure that they received a fair price for their hard work.
"When we started our business, we did not even have anyone to talk to or ask for advice about accessing capital and being-investment ready," Shakeel recalls.
Last year, the company enrolled in a training on access to finance. The International Trade Centre arranged this training through the EU-EAC Market Access Upgrade Programme (MARKUP). MARKUP assists small and medium-sized enterprises (SMEs) in Burundi, Kenya, Rwanda, Tanzania and Uganda by targeting specific agricultural commodities such as avocado, cocoa, coffee, spices, tea and horticulture with financial support from the European Union.
With the help of this coaching, The Coffee Gardens was able to expand its business networks and improve its capacity to grasp opportunities to access finance.
"For us, joining MARKUP meant becoming part of a community. Now, thanks to the programme, we can connect with many experts for invaluable and specific advice. We now feel comfortable knowing we have the support we can count on." Shakeel said, talking about his experience.
The company also established contacts with potential investors and grantors. Earlier this year, participation in the MARKUP-organised EAC Coffee Business Forum in Mombasa, enabled The Coffee Gardens to connect with core impact investors for the coffee sector in East Africa.
The Coffee Gardens successfully won a USD 13,000 grant from the RaboBank Foundation. The company kept its sense of community alive during the pandemic. They realized that farmers at the lower end of the value chain needed their support more than ever. They plan to use this grant for farmer training, acquiring personal protective equipment, improving farmers' access to financial services and planting indigenous trees to help protect the environment.
In addition, the company also secured USD 27,000 in long-term loans to be invested in infrastructure and new equipment.
Dana and Shakeel are confident that these new avenues of finance will create a win-win situation for The Coffee Gardens, its team and its community of farmers.