The Challenge FundFrequently Asked Questions

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AKCF is looking for business-led investment projects that would result in:

• Smallholder farmers/pastoralists practicing environmentally sustainable and climate-smart agriculture
• Smallholder farmers/pastoralists engaging in commercial agriculture as a result of better integration into value chains
• Increased incomes for smallholder farmers/pastoralists
• Creation of jobs in both rural and urban areas and at different parts of the value chain

While the financial sector in Kenya has made large strides to advance financial inclusion, we believe there is a need to find and support innovative solutions by thinking beyond existing conditions. Over the past 15 years, challenge funds across Africa have become an established mechanism to help the private sector to overcome risk aversion and deliver social outcomes. Challenge funds have proven to be a cost-effective way of casting a wide net, to pick up new ideas from diverse (and often unexpected) sources and to take good, innovative ideas to scale.

The AKCF provides financial support for specific investment projects devised by individual investor-companies, or where possible, consortia of companies/partners. AKCF does not seek to obtain any financial return. The fund is not an equity or venture capital investor and will not buy shares in a company or a project, nor will it wish to share in the profits of successful investments.

The AKCF is not a bank and does not provide loans or other kinds of debt financing. The funding provided is financial support, and there is no interest or other charges attached to the money provided by the Fund.

• It is bankrupt, subject to insolvency or winding-up procedures, where its assets are being administered by a liquidator or by a court, where it is in an arrangement with creditors, where its business activities are suspended, or where it is in any analogous situation arising from a similar procedure provided for under national laws or regulations;
• It has been established by a final judgment or a final administrative decision that the agri-enterprise is in breach of its obligations relating to the payment of taxes or social security contributions in accordance with the law of the country in which it is established;
• It has been established by a final judgment or a final administrative decision that the agri-enterprise is guilty of grave professional misconduct by having violated applicable laws or regulations or ethical standards of the profession to which the agri-enterprise belongs, fraudulently or negligently misrepresenting information required for the verification of the absence of grounds for exclusion or the fulfilment of selection criteria or in the performance of a contract;
• It has been established by a final judgment or a final administrative decision that the agri-enterprise or its principals have been guilty of fraud, corruption, conduct related to a criminal activity, terrorist related offences or financing, money laundering, child labour or other offenses concerning trafficking in human beings;
• The agri-enterprise, advisors or principals were previously involved the preparation of the call documents for the AgriFI Kenya Challenge Fund;
• Shown significant deficiencies in performance of a contract or agreement financed by the European Union Budget which led to termination or penalties;
• Entering into agreement with other economic operators with the aim of distorting competition;
• they are in any of the situations listed in section 2.3.3 of the Practical Guide of the European Union.

This call will fund for profit initiatives that demonstrate a positive upstream or downstream impact on smallholder farmers/pastoralists. The nature of actions that can be funded through financial support under this programme include the following:

1. Initiatives relating to smallholder farmer agricultural productivity, and/or, market access, post-harvest losses, food safety or other impact. The initiatives may include (but are not limited to):

• Improving the quality and/or the access to input supply including establishment of sustainable nurseries;
• Provision of extension services to smallholder farmers;
• Promoting the production of nutritious foods;
• Promotion of climate smart and soil and water conservation technologies;
• Promoting the strengthening and skills development of farmer organizations;
• Promoting the smallholders’ capacity to comply with quality and standards certification;
• Reduce post-harvest handling and losses;
• Promoting access to innovative and affordable financial services for smallholder farmers

2. Initiatives that improve on the management, operational and supporting business processes that would be directly linked to improving the integration of smallholder farmers within the supply chain of the businesses and improving their efficiencies e.g. energy saving technology measures

AKCF is not constrained to any particular value chain. What matters is that the project results in a positive impact on smallholder farmers/pastoralists.

Yes, they are eligible to apply as long as they can demonstrate how their proposal would contribute to the realization of the programmes objectives. 

The AgriFI financial support will be invested in costs that result in better integration of smallholder farmers/pastoralists and improved business technical capacity. This will include:

• Costs related to farmer organization and capacity building in good agricultural/animal husbandry practices, climate smart adaptation, food safety, post-harvest management among other related areas. 
• Costs supporting improvement of institutional capacity/business processes for effective smallholder integration
• Cost related to acquisition, installation, upgrading /management of systems and applications geared towards efficient management of business and farmer integration processes 
• Capital expenditure will only be eligible if it directly leads to integration of a substantial number of smallholders/pastoralists. Otherwise, applicants are encouraged to use the matching fund instruments provided for capital expenditure. 

• Debts and debts service charges (interest);
• Provision for losses, debts or potential future liabilities;
• Costs declared by the beneficiary(ies) and financed by another action or work programme receiving a European Union financial support (including through the European Development Fund);
• Purchases or land or buildings:
• Currency exchange losses;
• Credits to third parties (including input credit)
• In kind contributions
• Salary costs of the personnel of national administrations

No, the eligibility requirements suggest that assets cannot be purchased using the Financial Support received from the fund. Applicants/co-applicants are free to purchase  the assets they may require provided that they use their own matching funds for this and not the Financial Support received.  

Smallholder farmers/pastoralists cannot access the Fund directly, but will benefit through projects implemented by private sector agri-enterprises that source or provide services and products to smallholder farmers.

No. All applications must come from a registered company.

Yes, they are eligible but not as lead applicants. Therefore, they can only apply as members of a consortium with an agri-enterprise being the lead applicant and the other entities as co-applicants.

Named co-applicants as part of a consortium are limited to being engaged in a maximum of two (2) applications under this call for proposals and may not be on more than one (1) grant awarded under this call for proposals. For explicit clarification a resource partner/co-applicant on multiple bids may only receive funding for one application, so may jeopardise the applications of other lead applicants.

No, they are not eligible to apply in this specific call. 

Costs relating to facilitation and meals are eligible. However, costs relating to salaries of government officials are not eligible. 

Private sector firms that apply to the AKCF must be able to demonstrate their capacity and financial strength, and must also be able to contribute a minimum of 50% of eligible project costs (in cash). Additionally, applicants need to demonstrate an average annual turnover of at least EUR 200,000 over the last 3 years. 

An applicant needs to meet the eligibility criteria for their application to be considered. However, the growth potential of eligible companies will be considered in the assessment.

Yes, the yearly turnover needs to be at least EUR 200,000.

A consortium needs to have 1 lead applicant that meets all the eligibility criteria inclusive of the annual turnover. The aggregate turnover of the consortium will not be considered.

Yes, as long as they have been in operation over the last 3 years and can demonstrate how their business prospect will benefit smallholder farmers/pastoralists, they are eligible to apply. 

Any company that applied unsuccessfully in the first call is eligible to apply again provided that they meet the eligibility criteria. However, agri-enterprises cannot be awarded more than one project.

These are the additional resources to be contributed by agri-enterprises demonstrating they are committed to the project and are prepared to take risks. The match funding may be through own resources available to the agri-enterprise and may be in the form of cash/cash equivalents, or may be sourced through external finance such as credit or external equity investment. 

In cases where applications are made by consortia, the match fund contributions can be provided by any of the consortia members.

Yes, the financial support is dependent on match funding from the agri-enterprise making the application.

An applicant is required to demonstrate matching funds right from the Concept Note stage. There is provision in the application form to explain the stage in which an applicant is in regarding this.

The duration for financial support will be 24 months from the signature date of the contract. During this period the financial support funds will be disbursed based on a negotiated milestone structure.

For the third funding round, financial support requested from AgriFI Kenya Challenge Fund must fall within the following range:

• Minimum amount: Euro 200,000
• Maximum amount: Euro 750,000

The Challenge Fund will award financial support to cover a maximum of 50% of the total value of the proposal. The balance (i.e. the difference between the total cost of the proposal and the amount requested as financial support) must be financed with matching funds in the form of cash/cash equivalents, credit or equity from external financiers. In cases where applications are made by consortia the match fund contributions can be provided by any of the consortia members.

Yes. After submission of the full proposal, the AgriFI Kenya Challenge Fund Implementation Team will conduct a pre-award assessment and compliance checks with a number of tools. The team will also verify and validate the information provided in the full proposal. Should the compliance check or the information verification and validation exercise reveal that companies do not meet the eligibility criteria or have made false declarations, the fund manager reserves the right to disqualify these applicants from the process.

Both new and existing projects are permitted as long as the applicant demonstrates how they’ll integrate and benefit smallholder farmers/pastoralists.

No. The Fund will not be involved in direct management of any project. However, we the Fund will monitor the progress of the project throughout implementation.

Financial support recipients will be expected to comply with various reporting requirements defined by the Fund. In addition, regularly monitoring will be done by the project implementing team and this will include visiting project sites. 

No, technical assistance will be given to support the agri- enterprises during implementation of their investments.

No, the AgriFI team will not match different applicants. Applicants need to seek out potential partners themselves. 

Yes, after award an initial advance will be provided. However, financial support disbursements will be made according to a schedule agreed with the investment project’s implementing partner(s) and formalized in the contract. These payments will be released when pre-agreed milestone are satisfactorily achieved.

AKCF will consider proposed projects located in any part of Kenya. However, we will favor project proposals that are expected to have the greatest positive impact on smallholder farmers/pastoralists located in Arid and Semi-Arid Lands.

No, it will not. However, AKCF and the selected agri-enterprise will work together to ensure that all is done to make the project succeed and meet its goals. If it becomes evident that the recipient is not committed to making the project a success, AKCF will terminate the contract. It should also be noted that funds not spent for their intended purpose will be returned to the Fund Manager.

The milestones set by AKCF and the recipients will be mutually agreed upon, and will be set out in a formal contract before the first disbursement of funds is made.

If one believes that the milestones set are too demanding, you are free to express this during the contracting phase. If a mutually satisfactory agreement cannot be reached, the applicant is free to halt the application process at any time.

The proposal should be in Euros

At this stage, applicants should use the prevailing exchange rate. Guidelines for the exchange rate will be given to successful applicants at the contracting stage. 

No, applicants are not constrained to any particular financial institutions and can opt to work with their existing banks. 

Step 1: Submit concept note applications on Africube

Step 2: Firms with approved concept notes are invited to submit full proposals

Step 3: Proposals are evaluated and pre-award assessment conducted

Step 4: AKCF enters into contract negotiations with successful applicants

Step 5: Contracts are signed

Yes, there are character limits for each section and the applicant will be able to see the number of words remaining as they type.

Yes, applicants may submit more than one concept note if they have multiple projects they wish to propose. However only one project/company can be awarded.

Yes. However, AKCF will only sign the contract with one organization. The applicant for a partnership or consortium should be the organisation the lead applicant who will manage the funds.

Named co-applicants as part of a consortium are limited to being engaged in a maximum of two (2) applications under this call for proposals and may not be on more than one (1) grant awarded under this call for proposals. For explicit clarification a resource partner/co-applicant on multiple bids may only receive funding for one application, so may jeopardise the applications of other lead applicants

 

No, there is no limit on the number of members. However, the value of each consortium member needs to be clearly demonstrated in the application. 

No, the lead applicant does not have to be in the same value chain as other consortium members. Members can be in different value chains but what is important is to demonstrate how they all integrate and benefit smallholder farmers.

We are interested in evaluating the viability of the project and therefore, the projected revenues/profits should be those resulting from the project as implemented by the different members of the consortium and not those of the lead applicant only. 

Yes, different legal entities can apply in consortium. They will however need to agree on who the lead applicant will be as there can only be 1 lead applicant. 

Yes, a subsidiary company is eligible to apply as a lead applicant provided that they too meet the eligibility criteria.

We are interested in the viability of a project as implemented by all consortium members and not the performance of the lead firm only.

The Applicant will be informed in writing of the decision concerning their application and, if rejected, the reasons for the negative decision.

 

No.  The AKCF decision is final. There is no right of appeal.

No, Technical Assistance is pegged on getting Financial Support and therefore only successful applicants will be eligible for this. 

AKCF treats applicant confidentiality with utmost seriousness. To ensure that applicant confidentiality is upheld, AKCF will utilize Africube and Salesforce platforms; both of which are highly reputed for maintaining data integrity and confidentiality. In addition, all documentation submitted will only be used by AKCF for decision making purposes and will not be shared with any other parties without the prior approval of the applicant.

The concept notes must be submitted online via https://africube.com/kenya/  in English language. Self Help Africa will not accept any project concept notes submitted anywhere else other than on the AfriCUBE portal. Upon submission of a concept note online, the applicant will receive an automatic confirmation of receipt to the email provided in the application. Concept notes can be edited with the final date for submission being 27^th August, 2020 at 12.00 pm (noon) EAT (East African Time).

Applicants do not need to register each time they wish to apply for support. However, applicants are required to submit a new application for each funding round. Previous applications will not automatically be considered in a new funding round.

If you forget your password, you can reset your password via  https://africube.com/lostpassword

If you have any technical difficulties in using the portal, then please submit a query through the contact form on the website or by emailing info@agrifichallengefund.org and a member of our team will get back to you as soon as possible.

Questions may be sent by e-mail no later than 10 days before the deadline for the submission of concept notes, indicating clearly the reference of the call.

Self Help Africa has no obligation to provide clarifications to questions received after this date. To ensure equal treatment of applicants, the Self Help Africa WILL NOT give a prior opinion on the eligibility of applicants or an action or specific activities

No, please only log in via one internet window, otherwise you risk losing your content.

• The European Investment Bank in its agenda to strengthen their close cooperation with Kenyan partners and the European Union Delegation, and in their mission to increase agricultural investment in Kenya, undertake this exciting new scheme that acts as a model for other engagement across Africa and, 
• Equity Bank, as the first Kenyan partner to participate in this Kenya Agriculture Value Chain Facility, will offer financial services initially to the Programme as other financial institutions are expected to join later.  

The applicants of the funds must be Small and Medium-Sized agri-Enterprises/Companies with business models that integrate smallholder farmers/pastoralists into their value chains. 

The EIB /Equity Bank Credit facility will enable financial facilitation in form of debt finance to eligible applicants across Kenya. This involves access to longer term (than commonly available in the market) loan facilities in local currency of up to Seven (7) years.

The facility is available to eligible applicants as matching funds against grant funding under AgriFI Kenya Challenge Fund. The credit facility will be used to cover 50% of project proposal costs, while the other 50% will be funded as a grant through the Challenge Fund.

• Legal entities duly incorporated under the laws of Kenya and duly licensed to carry out business in Kenya
• The applicants’ business must have been in existence in Kenya for at least a period of 3 consecutive years and on profitable trend,
• Applicants must be agro-based entities who have integrated small holder farmers on valid commercial agreements, such integration may include but will not be limited to farm inputs supply, produce off takers, technical support, agricultural technology and solutions to small holder farmers, etc.
• Applicants’ business must not be in the list of restrictions/exclusions of sectors and activities as per the NACE classification codes for business activities,
• The applicant or its affiliates must not be involved in any actions of crime or anti-money laundering activities 
• The activities of the applicant’s business must not have any adverse environmental and social impact,
• The applicant must have proof existence of market for their produce (where applicable) sourced from the smallholders integrated in their business operations.
• The applicant must have an existing (or is willing to set up) a strong and effective management structure with appropriate and relevant skills and experience to implement the project being funded.

• Tailor made Agriculture/Agribusiness financial solutions,
• Blended grant fund facility of 50% of the Project cost,
• Long term financing on both Working capital & capex facilities
• Flexible repayment terms,
• Affordable interest rates on the debt funding.

• All Equity Bank (Kenya) Ltd Branches

AKCF will provide information and opportunity to ask question in a series of webinars.

Interested applicants can register their details via www.agrifichallengefund.org