Doubling down on agriculture during COVID-19

MCE Social Capital
6 min readJun 23, 2020


Pitahaya fields in Nicaragua. Photo: MCE Social Capital

Millions of smallholder farmers rely on agricultural enterprises and microfinance institutions as critical sources of income, financing, resources, and market access. These businesses are drivers of economic development in the rural communities in which they operate and serve as a lifeline for smallholder farmers and their families, particularly during times of crisis.

COVID-19 has disrupted agricultural value chains and microfinance networks across the globe, threatening the sustainability of these businesses and the wellbeing of their clients. The companies in our portfolio have proven resilient in the past, and we are committed to doing everything we can to help them weather this crisis and continue to serve smallholder farmers during the harvest season.

Below are some of the new investments that we have made over the past few months, with a particular focus on strengthening agriculture value chains and creating economic opportunity for smallholder farmers.

The actions that these companies have taken in response to COVID-19 are highlighted in bolded text.

In May 2020, MCE executed a US$2,000,000 investment in Community Markets for Conservation (COMACO), a pioneering social enterprise that works closely with rural communities across Zambia’s Luangwa Valley to promote sustainable agricultural practices with enhanced market access in a way that incentivizes forest and wildlife conservation, promotes household income and food security, and increases climate resilience for small-scale farmers. We are proud to be collaborating with Fundación Netri, Candide Group, and Blink C.V. to support COMACO.

MCE has already disbursed the first tranche of $1,000,000. The second tranche, expected to be disbursed in June 2020, will consist of $200,000 from MCE, $300,000 from Netri, $250,000 from Candide, and $250,000 from Blink. This collective investment will enable COMACO to further procure high-quality produce from its network of small-scale farmers, improving their annual incomes and maximizing its production capacity in the upcoming season.

COMACO continues to operate following the government’s guidelines in response to COVID-19, taking additional internal precautionary measures including, but not limited to, sanitizing and hygiene measures, small group meetings, and distancing in production facilities, among others. The company is not expected to slow down activities since food production and processing are considered essential services.

For more information about COMACO, check out our recent blog post!

Smallholder farmer in COMACO’s network. Photo: COMACO

In April 2020, MCE made a $50,000 investment in Prograin Organic, the first company in Moldova to promote organic grain production, supporting its farmers through organic input supply, certification processes, collection and storage logistics, market access, and training in land management and crop rotation.

This was MCE’s third loan to the company since December 2018. As EU borders closed in response to COVID-19, Prograin’s final shipments to buyers were delayed as the logistics chain slowed down, resulting in late payments from clients. This left Prograin with a shortage of cash, which was successfully covered by a $450K bridge loan from MCE ($50K) and Open Road Alliance ($400K).

Prograin Organic quickly implemented health measures in response to COVID-19 to protect staff in its warehouse and export terminal. The short-term financing from MCE and Open Road Alliance enabled Prograin to kick off its organic grain cultivation process without delay, ensuring income stability for its network of farmers and the 1,700+ people they employ.

An organic field in Moldova. Photo: Prograin Organic

In April 2020, MCE made a US$500,000 investment in Insotec, an Ecuadorian microfinance institution that offers loans as well as a variety of non-financial services to its borrowers, including technical assistance, health brigades, and financial literacy training. As of December 2019, 55% of Insotec’s $58 million portfolio was in the agricultural sector, and nearly 73% of its 18,500 borrowers lived in rural areas. Insotec has been a client of MCE since March 2018, and this new loan brought MCE’s total exposure to US$1.5 million.

Over the past two years, Insotec has developed innovative value chains to meet the necessities of its agricultural clients — the MFI has partnered up with several agro-businesses to offer farmers customized credits for agricultural inputs and working capital, as well as access to agricultural insurance in case of a poor harvest.

In response to COVID-19, Insotec created a new product called “Renovación Anticipada” (“early renewal”), which allows clients with good credit history to renew their loans for the same amount as their current outstanding loan, with a maximum 3-month grace period. For clients whose business has been impacted as a result of the COVID-19 crisis and Ecuador’s lockdown, this product removes the financial obligation to repay their loan during the grace period and allows them to focus on their basic necessities.

Carlos Chicaiza, a smallholder farmer client of Insotec. Photo: MCE Social Capital

In March 2020, MCE made a $100,000 investment in Uncommon Cacao, a for-profit social enterprise that connects over 4,600 smallholder cacao farmers in Latin America and Sub-Saharan Africa to specialty chocolate makers through direct and transparent supply chains that increase farmer household incomes while promoting sustainable and organic agricultural practices. Uncommon Cacao embraces transparent trade to source quality cacao from producers they trust — they are one of the only supply chain companies in the world to publish their prices and margins from origin through final sale. This was MCE’s second loan to Uncommon Cacao since March 2019.

The first quarter of this year was Uncommon Cacao’s strongest Q1 ever in terms of sales, which put the company in a good position to weather the crisis and support its partners and clients and buyers through the disruptions in their supply chains.

In addition to successfully fundraising for its customers, Uncommon Cacao has leveraged virtual platforms for two distinct initiatives in response to COVID-19. First, they have hosted online sessions to bring together chocolate makers and the company’s origin suppliers to create stronger bonds and facilitate information sharing regarding the pandemic’s impact on supply chains.

Second, Uncommon Cacao has also organized multiple virtual “chocolate festivals” where chocolate producers, retailers, and educators from around the world collectively promote their work and drive direct online sales during the COVID-19 pandemic — the results have been quite positive, with a dramatic increase in e-commerce sales.

Employees of Maya Mountain Cacao, Uncommon Cacao’s first origin project, which sources from smallholder farmers in southern Belize. Photo: Uncommon Cacao

MCE is currently conducting due diligence for a new loan to Chamroeun, a medium-sized microfinance institution in Cambodia committed to supporting vulnerable populations with financial and non-financial services. As of March 2020, the MFI has a gross loan portfolio of $23.5 million, serving almost 35,000 borrowers, of which 81% are women and 63% reside in rural areas.

Through its dedicated “Credit+” department established in 2019, Chamroeun is actively working to increase its rural outreach and expand upon its agricultural financing and group loan products launched in 2017. Recently, Chamroeun developed a new “agricultural cooperative loan” to provide working capital for agricultural cooperatives that reach many smallholder farmers.

In response to COVID-19, Chamroeun has provided 3-month grace periods for clients who have been negatively affected due to lockdown restrictions. The MFI has also been promoting its “social emergency loan,” which provides a flexible repayment plan on principal and interest paid on a monthly basis. This loan has a max size of US$250 and a low interest rate of 1% per month.

A smallholder farmer client of Chamroeun. Photo: Chamroeun

For more information about MCE’s response to COVID-19, check out the Q&A with Pierre Berard, MCE’s Chief Investment Officer.



MCE Social Capital

MCE is a nonprofit impact investing firm that mobilizes capital to generate economic opportunity for women and rural families living in poverty.