TriLinc has provided financing to a rice and bean importer located in South Africa. Incorporated in 2001, the borrower began its operations as a small-scale distributor of rice and bean imports from India. Over the past fve years, the borrower has expanded its business significantly and is now a supplier to large discount supermarkets throughout South Africa and the greater Sub-Saharan Africa region. These supermarkets sell substantial volumes of rice product to small-size traders and independent stores that serve both the rural and low-income consumer segments. For example, the borrower is the largest supplier of store brand rice to Massmart, a subsidiary of Walmart with over 376 locations (346 in South Africa) and 431 buying group members throughout the region. It is anticipated that TriLinc’s financing will allow the borrower to strengthen its operations, continue providing a consistent supply of product, and increase its number of employees. The borrower has established a consistent repayment track record with the sub-advisor and the transaction is part of a purchase and repurchase agreement secured by rice inventory.
South Africa is classified as an upper middle income country by the World Bank.1 Between 2010 and 2013, GDP growth rates averaged approximately 2.8%.2 Major exports include gold, diamonds, and platinum (world’s largest producer).3
South Africa meets TriLinc’s country standards for its performance across relevant growth, stability and access metrics.4 In 2013, it ranked 41st in the world and third across the region on the World Bank’s Ease of Doing Business index.5 As the second largest economy in Sub-Saharan Africa, the country benefitted from the $32 billion in direct foreign investment that was estimated to have flowed through the region in 2013.6 Robust domestic demand across Sub-Saharan Africa has helped spur real GDP growth of up to 4.7% in 2013, and is expected to remain stable at 4.7% in 2014.6 Looking ahead in 2015 and 2016, overall regional GDP growth is projected to strengthen to 5.1%.6
Additional Sustainability & Impact Highlights
- The borrower provides professional training programs such as computer literacy, junior management and supervisor development, and occupational health and safety to its employees, approximately half of whom are classified as either semi-skilled or unskilled laborers.
- The borrower is committed to product safety, quality, and freshness and utilizes an independent auditor to ensure compliance with Hazard Analysis Critical Control Point (HACCP) principles, ISO/TS 22002 Prerequisite Pro grammes on Food Safety and the Global Food Safety Initiative’s (GFSI) Food Safety Management System requirements, amongst other national and international certification standards and regulations.
- The borrower targets job creation and equal opportunity employment through implementing South Africa’s Broad-Based Black Economic Empowerment program.
1World Bank, Doing Business 2014, Economy Profile: South Africa. 2World Bank, World Development Indicators Database, 2014. 3CIA, The World Factbook, 2014: South Africa. 4There is no assurance that our investment in this company or this market will be successful. 5The World Bank, Doing Business 2014, Understanding Regulations for Small and Medium-Size Enterprises. 6The World Bank, Global Economic Prospects, 2014.
The above information is as of the initial date of investment: July 7, 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.
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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