Our dual key investment series features stories of our investments from our investments.

Figure : Finished Products - Liquid Honey

Figure : Fishponds

TAF Assured Mixed Enterprises limited produces honeycombs and processes them into different products i.e., liquid honey, bee wax, propolis and bee venom. TAF also provides training services especially to the youth. TAF’s business model is an inclusive business model where smallholder (bee) farmers are included along the value chain. The smallholder farmers are major suppliers of honeycombs to TAF. TAF used the funds from the START Facility to increase its production & processing capacity.

Location: Telel Ward, Telel Parish, East Division, Lira City, Lira District, Uganda
Project Cost: $87,417 (UGX 309m)
Development Impact: Local Economic Development

UNCDF Support:

• Tailored Technical Assistance – Undertook full due-diligence, Pre-investment business development services, project development and finance structuring, co-designed commercially viable yet sustainably social business model, assessed the development impact, financial impact additionality and sustainability (Dual Key), supported the investments in the implementation phase, post- investment business development services including advise on performance, impact measurement and reporting.
• Seed Capital - UNCDF provided seed capital of $54,660 (UGX 193.5m) in form of concessional loan
• Technical assistance grant- UNCDF provided a grant of $12,000 in the form of an accounting system, computer hardware and training.
• Reimbursable grant- UNCDF provided a reimbursable grant of about $10,745 (UGX 40m) to fund working capital and support the company recover from the effects of Covid-19.

Financial Leverage unlocked by UNCDF: The intervention has demonstrated proof of concept of blending public and private resources at the local level; owner equity contribution of $32,757 (UGX 120m).

Investment Impact:

With the technical assistance and seed capital support from UNCDF, TAF has accomplished the following:

• Construction of processing premises including storage of 40Mt.
• Acquisition of additional processing equipment increasing capacity by 60% from 2 to 5mt per annum. This is an approximate increase in annual income by about $20k
• Acquisition of a 2MT truck to support in the transportation of raw materials and finished products.
• Distributed over 300 beehives to smallholder farmers increasing annual production of honeycombs by over 3,000mt per annum.
• Increased its working capital majorly for purchase of honeycombs from the smallholder farmers.
• Expansion of the farmland cover from 8 acres to 15 acres.
• Constructed training facilities including a conference room & 22 bed accommodation facility.
• Set up fishponds with a population of 35k fish currently and increased its own beehives to 400 currently
• Capacity building of over 500 smallholder farmers of which 40% are women and 60% youth.

Figure : Apiary

Social Impact:

• Women & youth economic empowerment- Over 500 farmers included in the value chain for the supply of honeycombs (40% female and 60% youth) with target to grow the number to 2,500 in the medium term. This has translated into income of about $450 per annum per farmer.
• Improvement in farmer livelihoods- Improvement in the house holds income by approximately $450 per annum (from nil) of the rural farmers within the Lango, Acholi & Karamoja sub regions subsequently growing their savings, rural economic investment, access to other social services like education, health etc.
• Employment – Recruited 6 permanent staff (2 women & 3 youth) and 5 temporary staff.

Figure :Beehive workshop

This teaser was written by Deus Tirwakunda, Deus Tirwakunda is the Finance & Investment Officer for the for UNCDF in Uganda, as one of the principal participant in this investment , he answered the following questions:

What made you enthusiastic about this investment?
TAF’s inclusive business model which involves working with farmers along the value chain made the project unique and worth supporting. The apiary farm is involved in the production of bee related products and offers training and beehives to beekeepers in Northern Uganda. The company works with farmers along the value chain first by ensuring that they have the right equipment. It offers to farmers improved beehives that ensure successful colonization and production. It has a training Centre that imparts skills in bee keeping and other organic farming practices. The company works with over 500 farmers and out of these 40% are women and 60% are youth. These farmers produce honeycomb which is sold to TAF for processing into different honey products for local consumption. This has created employment for women and youth in the Lango sub-region and improved livelihoods.

What were the challenges faced by this project?
Like most MSMEs, TAF had a challenge of access to finance for growth and expansion. Through the Support to Agricultural Revitalization and Transformation (START) facility, UNCDF was able to support TAF to prepare required documentation for financing including designing the financial model and project information memorandum to facilitate the project financing at affordable rate of 10% and a 12 months grace period. With the START funding the company constructed a honey storage facility, acquired additional honey processing equipment with the capacity to process 500 liters of honey, acquired a 2 metric ton truck and distributed over 300 beehives to smallholder bee farmers with the capacity to produce over 3,000 metric tons per year. With increased working capital the company was able to purchase more honey comb from the farmers for further processing.
With the outbreak of COVID-19 and its subsequent effects and measures instituted to curb the spread of the disease, TAF faced a series of challenges that impacted on its financial performance. The company was supported with a reimbursable grant under the Small Business Recovery Fund (SBRF) to overcome working capital challenges.
Through the technical assistance grant the company has been supported to acquire an accounting system, computer hardware and training to further improve on financial management and records keeping.

What are the lessons learned from this example?
TAF was one of the few SMEs to successfully get funding during the first call for proposal, thanks to the business development support and technical assistance under the START facility. With this support the company has been able to turn around the business of beekeeping which was previously not given much attention. And yet enterprises like these have remained largely unbanked due to the number of a challenges they have. As a lesson a blend of solutions including BDS / TA support and concessional funding are key in unlocking the potential of such micro enterprises. Such SMEs generate the bulk of new jobs, promote innovation, they are the source of economic development, and are able to integrate women and the youth into the mainstream economy.

For more information please contact :

deus.tirwakunda@uncdf.org

Investment Officer

Uganda