From the IRD: From "Bucket" to "Supermarket Milling"

by International Relief and Development (IRD)

(Editor's Note: This post originally appeared on the website of International Relief and Development. For more Africa-related business and finance news, check out our newly revamped finance page).

Roger Taurayi Makonde, a small-scale miller in Zimbabwe's Chendambuya communal area, has moved from serving local homesteads to supplying supermarkets in a space of four months. "Profits are more than expected," he says.

When Makonde started his Rotamak milling business more than five years ago, his scope was milling maize by the bucket for the local community within a radius of 20 kilometers. Thanks to a $3,000 AgriTrade loan he received in July 2011, Makonde is now milling maize meal for a broader market. He grinds the maize, packs it in 5 and 10 kilogram bags, and sells it to supermarkets in nearby Rusape, some 65 kilometers to the south. "Stumbling upon AgriTrade was the best thing that happened to me," said Makonde.

In February 2011, when he decided he wanted to add value to his product by packaging it and selling it in stores, he realized he needed more stocks of maize at any given time than before. In order to do this, Makonde had to expand his business, but he had no idea where to get financing.

It was around that same time Makonde heard of the AgriTrade credit facility. He applied for a loan and was successful.

Since then his business has improved dramatically. In the four months since securing the loan, Makonde has bought 70 tons of maize from 100 smallholder communal farmers in and around Chendambuya. "Last year this time I had no stock to talk about, but because of the AgriTrade loan, look at my stock today," said a visibly proud Makonde. "I have more than enough to pack at any given time."

Rotamak packages an average of 1.5 tons of maize daily. "I am so encouraged by how my product has been received on the market and am planning to expand even further south to Buhera and other areas," said Makonde.

To stay competitive Makonde has both electric and diesel grinding mills, as the electricity supply is erratic. "I have to cover all my bases and make sure production goes on at all costs," said Makonde.

AgriTrade is a $10 million revolving credit facility serving the agricultural sector. Local financial institutions, CABS, Trust Bank, and MicroKing Finance established the facility with 50 percent of the funds coming from USAID. AgriTrade assists hundreds of small and medium-size agribusinesses involved in communal agriculture, resulting in millions of dollars of new investment. AgriTrade loans range from $1,000 to $200,000. To date, AgriTrade had disbursed more than $3.5 million in loans to 499 borrowers.

AgriTrade is part of Zim-AIED, which is funded by USAID and implemented by Fintrac; IRD manages AgriTrade under a subcontract to Fintrac.