One Acre Fund: Bringing New Hope to Smallholder Farmers in East Africa

One Acre Fund is a Kenya-based not-for-profit organization that works closely with the farmers in the rural villages in Kenya, Tanzania, Rwanda and Burundi. Its mission is to provide asset-based financing and agriculture-based training to smallholder farmers in these countries. The ultimate goal of One Acre Fund is to significantly reduce the incidence of hunger and poverty in these areas.

Transactions and activities on all levels within the farming value chain at One Acre Fund are facilitated through a market-based approach. Among these transactions and activities include seed sourcing and markets support, which are essential parts of the farming value chain. According to One Acre Fund’s report in 2013, its member-farmers realized 180% of return on investment. Most of these farmers have increased their farm income on each acre planted.

Through One Acre Fund’s initiatives, smallholder farmers gain access to the organization’s “service bundle.” The “service bundle” provides seeds and fertilizer, funds for farm inputs, training on new agriculture techniques, and market facilitation that will almost guarantee profits. Loan packages carry crop insurances that deal with the risks of unforeseen events such as diseases or drought.

Farmers need to be a part of a village group in order to avail the loans and training from One Acre Fund. Such village group should be supported by a field officer recognized by One Acre Fund. The delivery of farm inputs and conduct of the trainings and the collection of repayments are coordinated between the field officers and the farmers. As a means to help the farmers in their repayment process, One Acre Fund implements a flexible repayment system where the farmers pay their loans in increments anytime within the growing season. One Acre Fund reported that in 2013, 99% of the farmers have fully paid their loans.

One Acre Fund was established in 2006 by Andrew Youn. His MBA at Kellog School of Management brought him to Kenya in August 2005 where he researched in the quality of life of the smallholder farmers there. He discovered that most of his respondents endured a “hunger season” at least every year. In spite of having one acre lands, they were not able to feed their families. Youn went back to Kellog armed with a new vision: a business plan that would introduce market-based approach in productive farming. Thus, One Acre Fund was birthed and was launched in February 2006 in Bungoma, Kenya.