More Money for the Honey: A Unified Approach Amplifies Impact for Poor Farmers

October 01, 2013

The Aspen Network of Development Entrepreneurs or ANDE, recently released a case study (PDF) on Grameen Foundation Pioneer Fund investee and TaroWorks client, Honey Care Africa. The study shows how a multi-faceted, collaborative approach can empower poor farmers in ways that individual efforts alone cannot. Grameen Foundation and other ANDE members including, Root Capital, Open Capital Advisors, and Lundin Foundation provided complementary expertise that helped Honey Care Africa adapt and grow its business in Kenya. The promise of social enterprise will only be fully realized when supported by this kind of vibrant ecosystem.

Honey Care Africa’s mission is to increase economic opportunity for smallholder farmers in rural Kenya and is a Grameen Foundation investee. Director of Capital Markets, Matthew Speh, is quoted in the report discussing the Pioneer Fund’s unique approach to investing. In addition to looking at standard financial performance metrics at the company level, the fund takes an in-depth look into the return on investment case of the end customers, in this case the farmers:

“It is essential for us to understand the value proposition from the perspective of the poor entrepreneur. If a venture does not produce value for the customer we are not interested.”

Matthew’s team works hard to find creative ways to measure value for the “customer”. A lot of investors look primarily at a venture’s intentions, but as much as possible the Pioneer Fund wants to be positioned to assess verifiable impact with respect to improved livelihoods. In order to do so, the Pioneer Fund applied the traditional investment analysis of a business plan to a bee hive. With this information the expected horizon to break-even on the farmer’s investment as well as the long-term internal rate of return on the investment over the life of the asset can be calculated, Ultimately they assessed a significant economic return potential for the farmer and therefore was willing to invest.

At the same time, it is clear that financial capital is not enough to build a great business, and human resources and technology also play a significant role. Businesses (social or otherwise) need data 1) to understand their business and 2) to make good decisions. We’re glad to see how TaroWorks, a mobile data management tool, has enabled the management at Honey Care to understand and manage their supply chains. TaroWorks allowed the management team to stay in touch with field staff and support reporting on hive locations and conditions.

“Real-time communication helped Honey Care optimize the timing of their field visits, improve the efficiency of harvests and reduce losses due to side selling. It also helped to ensure that any issues with the hive’s health were promptly resolved. And by tracking hive performance, Honey Care was better able to estimate the amount of supply that it would market to both local and international honey buyers.”

This is truly a case where development organizations coming together with unique expertise and resources is having a transformative impact on the lives of poor people. Grameen Foundation looks forward to working more closely with ANDE and partner members to connect the poor to their potential.

Link to study: