Farm Supplies Distributor

Borrower Overview
 

TriLinc has provided financing to a farm supplies distributor in Zambia. Incorporated in 2010, the borrower specializes in the warehousing and country-wide distribution of key agricultural goods, including maize, soya beans, ground nuts, seed and fertilizer. As a farm supplies distributor, the borrower plays a vital role in catalyzing the sector’s growth and productivity while ensuring improved market access for both producers and consumers. As a goods-to-market facilitator, the borrower purchases product from small-scale farmers and farmer associations for resale and distribution. The borrower also imports finished fertilizer product from a network of international suppliers for distribution to agricultural producers throughout Zambia. By providing short-term liquidity for the purchase of additional fertilizer imports, it is anticipated that TriLinc’s financing will support the borrower’s growth and employment generation objectives. In addition, the financing will help reinforce its efforts in becoming one of Zambia’s leading farm supply distributors and key players in improving the country’s agricultural productivity and food security.

 


Market Overview

Zambia is classified as a lower-middle income country by the World Bank.1 Between 2010 and 2013, GDP growth rates averaged approximately 7.5%.2 Zambia’s main exports have traditionally been concentrated in copper, cobalt, electricity, tobacco, flowers and cotton.3 Conversely, the country’s main imports have been focused in machinery, transportation equipment, petroleum products, electricity, fertilizer, foodstuffs and clothing.3

Zambia meets TriLinc’s country standards for its performance across relevant growth, stability and access metrics.5 In 2014, it ranked ninth across the Sub-Saharan African region on the World Bank’s Ease of Doing Business index. As the 12th largest economy in Sub-Saharan Africa,6 the country benefited from the $38.7 billion in net foreign direct investment that was estimated to have flowed into the region in 2013.7 Robust domestic demand across Sub-Saharan Africa has helped spur GDP growth to 4.5% in 2014, and is expected to remain stable at 4.6% in 2015.8 Looking ahead, overall regional GDP growth is projected to strengthen to 5.1% by 2017.8


Additional Sustainability & Impact Highlights

  • The borrower is registered as a Citizen-Owned Company by Zambia’s Citizens Economic Empowerment Act, which promotes the empowerment of citizens whose access to economic resources and development capacity has been constrained.9
  • As a part of the Government of Zambia’s Farmer Input Support Program, the borrower provides two fertilizer products for distribution to small-scale farmers and farmer associations throughout Zambia.
  • The borrower provides its employees with training opportunities in computer literacy and technical driving skills for forklift and truck fleet operators.
  • The borrower supports local sports clubs to promote health and well-being in the communities where it operates.

1The World Bank, Doing Business 2014, Economy Profile: Zambia. 2The World Bank, World Development Indicators Database, 2014. 3CIA, The World Factbook, 2014: Zambia. 4There is no assurance that our investment in this company or this market will be successful. 5The World Bank, Doing Business 2015, Going Beyond Efficiency. 6The World Bank, GDP Ranking; December 2014. 7The World Bank, Data, 2015. 8The World Bank, Global Economic Prospects, 2015. 9The Citizens Economic Empowerment Act, Zambia, 2006.

The above information is as of the initial date of investment: August 22, 2014.

This borrower is no longer in TriLinc’s portfolio.

TriLinc originally performed an SDG mapping exercise in December 2017 to map all of our borrower companies, both current and exited from our portfolios, to specific SDGs based off of business activity. TriLinc’s official SDG alignment methodology was not finalized until June 30, 2018. For borrowers that had exited TriLinc’s portfolios prior to this time period, the selected SDGs for these borrower are a reflection of what TriLinc believes would have been the SDG alignment if 1) the SDGs had been in effect and 2) TriLinc had integrated the SDG alignment while the company was in the portfolio. The SDG mapping presented does not include input from Investment Partners or borrower companies given that the companies were no longer in the portfolio when the alignment was finalized.

RISK FACTORS
There is no guarantee that TriLinc’s investment strategy will be successful. Investment in a non-listed LLC involves significant risks including but not limited to: ownership is restricted; no secondary market; limitation on liquidity, transfer and redemption of ownership interest; distributions made may not come from income and, if so, will reduce the returns, are not guaranteed and are subject to management discretion. TriLinc selects investments and conducts operations on behalf of its clients, and will face conflicts of interest. Investment with TriLinc is not suitable for all investors. Securities Offered through CommonGood Securities, LLC, a member of FINRA and SIPC.

An investment with TriLinc carries significant fees and charges that will have an impact on investment returns. Information regarding the terms of the investment is available by contacting TriLinc. This is a speculative security and, as such, involves a high degree of risk. Investments are not bank guaranteed, not FDIC insured and may lose value or total value. Some investments may have been made in an investment vehicle that is no longer open for investment. The highlighted investment may or may not have been profitable. There is no guarantee that future investments will be similar.

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