Many customers in underdeveloped countries are struggling to obtain financing for their projects. This is not the fault of COVID-19, it\u2019s a reflection of the structure of the agri-processing industry with its many small, family-owned businesses.<\/p>\n
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In general, commercial banks in low-income countries are hesitant to finance small agri-processing projects. They have the same attitude towards agriculture: farmers are perceived as high-risk borrowers.<\/p>\n
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All over the world, agribusiness is the vital link between farmers and urban consumers. No country can thrive without a stable food supply. Most agribusinesses are family-owned or privately held companies that are wary of handing over their keys to a finance hotshot in a skyscraper on the other side of the world. In Africa, specialist private equity investors have moved into the space left empty by the commercial banks who chase a limited number of companies to invest in.<\/p>\n
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So, what should you do if you are the owner of a small agribusiness company and you want to buy equipment in order to sell more products? If you go to banks in Africa, you will find unfair interest rates and crazy collateral requirements.<\/p>\n
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The solution is to start small. Of course, you dream of a large plant that will give you significant market share overnight. But the raw materials, are they available? The money to buy a high volume of raw materials, is it available? The skilled workers you need to run a large plant, can you hire them? Your own management skills, are they up to the job?<\/p>\n
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It\u2019s good to be ambitious, to have vision, but it\u2019s also important to be realistic. Start small, start now, with just the core equipment you need. Do you need expensive cleaning equipment from day one when you can hire unemployed men and women to clean the raw materials manually? Many companies in Africa do just that \u2013 it\u2019s a win-win for the community. Buy only what you need to start operating. The business will start earning money and you will learn how to make it profitable. Soon, the bankers will be at your door, offering you loans. By using modular processing systems like Insta-Pro, you can then expand production year by year, by adding extra modules.<\/p>\n
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Don\u2019t wait until next year, don\u2019t just dream, act now.<\/p>\n","protected":false},"excerpt":{"rendered":"
Many customers in underdeveloped countries are struggling to obtain financing for their projects. This is not the fault of COVID-19, it\u2019s a reflection of the structure of the agri-processing industry with its many small, family-owned businesses. In general, commercial banks in low-income countries are hesitant to finance small agri-processing projects. They have the same […]<\/p>\n","protected":false},"author":8,"featured_media":11310,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[8979,92,36],"class_list":["post-14677","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-businessstrategyandfinance","tag-african-business","tag-business-strategy","tag-creating-a-profitable-plant"],"acf":[],"yoast_head":"\n