Kaleidofin, IDH Farmfit Fund and Apollo Agriculture announce landmark local currency transaction to strengthen smallholder finance in Kenya
Nairobi, Kenya, 07th May: Fintech platform, Kaleidofin, has closed Kenya’s first private-sector local currency securitisation in the smallholder agriculture sector, in partnership with agri-finance company Apollo Agriculture and with investment from the IDH Farmfit Fund, a blended finance impact fund, marking a significant step in developing institutional capital markets for rural lending.
This first-of-its-kind securitisation in Kenya demonstrates how structured credit markets can channel institutional capital toward smallholder finance.
The milestone transaction mobilised KES 276 million (approximately USD 2.5 million) through the securitisation of receivables originated by Apollo Agriculture, covering a portfolio of 23,839 smallholder farmers, 51% of whom are women, with an average loan size of KES 17,942 and approximately 22% first-time borrowers.
Structured through Kaleidofin’s ki platform, a dedicated debt capital market infrastructure, the transaction enables the conversion of granular agricultural loans into investable assets for institutional investors. Unlike traditional models that rely on rigid standardisation, the platform supports customised structuring of portfolios and risk segmentation, powered by Kaleidofin’s proprietary ki score, an AI-driven risk intelligence layer built on loan transaction, bureau and alternative data.
The structure allows originators such as Apollo Agriculture to recycle capital efficiently while aligning financing to seasonal agricultural cycles and provides investors with improved visibility into underlying asset risk, helping reduce information asymmetry in an otherwise opaque segment.
For Apollo Agriculture, the transaction releases immediate liquidity and improves capital efficiency, enabling continued expansion of financing to smallholder farmers without increasing balance sheet leverage. The company combines credit with farm inputs, insurance, and advisory services, using machine learning and satellite data to underwrite customers typically excluded from formal finance.
“This transaction demonstrates how innovative financial structures can unlock capital for smallholder farmers at scale,” said Roel Messie, CEO of IDH Investment Management, manager of the IDH Farmfit Fund. “Building investable opportunities in agriculture requires both capital and enabling infrastructure, and this partnership brings those elements together.”
“This is a meaningful step in building efficient, scalable funding for smallholder agriculture,” said Eli Pollak, CEO of Apollo Agriculture. “By converting receivables into working capital, we are able to lower our cost of funds and expand access to affordable, local currency financing for farmers.”
The IDH Farmfit Fund acted as anchor investor in the transaction, which represents the first step in a broader multi-year securitisation programme expected to mobilise approximately KES 2.37 billion and reach more than 130,000 farmers over time.
The transaction was supported by a broader ecosystem of partners working to develop the enabling environment for structured finance in agriculture. UK-funded specialist development agency, FSD Africa provided support across legal and regulatory structuring, investor engagement, and market development, while the UK’s flagship public markets programme, MOBILIST, contributed to tax and structuring guidance.
This transaction showcases how well-functioning market infrastructure can catalyse institutional capital for sectors traditionally considered high-risk, like smallholder agriculture. FSD Africa’s role has been to help build the foundations – from regulatory clarity to investor confidence – that make transactions like this viable and repeatable. We see this as a blueprint for how structured finance can unlock sustainable, large-scale funding for inclusive growth across Africa,
Dr. Evans Osano, Chief Financial Markets Officer at FSD Africa
The transaction is expected to serve as a blueprint for similar structures across emerging markets, demonstrating how technology-enabled infrastructure and blended finance can expand access to capital for underserved borrowers while creating investable opportunities for institutional investors.
