Rural Peace Investment Fund Launched in Colombia

The Rural Peace Investment Fund will invest in small and medium enterprises in the agrifood sector in the departments Naria and Putumayo. Also enterprises in other regions that generate social impact related to at least 50 small farmers in these departments can qualify. The enterprises should have an innovative proposal and a scalable business model. The fund will connect them with networks and national and international markets.

From €700,000 to €5,000,000

During the first year the seed capital of the fund will be 700 thousand euros, with the objective of attracting additional investment resources reaching 5 million euros within 7 years. The fund has been constituted with the contribution of the European Union, ICCO Cooperation and Truvalu and the valuable support of the Embassy of the Netherlands.

Combining Three Elements

Francisco Garca, Head of Cooperation for the European Union in Colombia, spoke at the launch: “As a European Fund we knew from the beginning that we needed three things: first, to bring in the private sector because, in the end, when we retire, we know that only peasants and businesses will be left. Secondly, we should take advantage of the flexibility of the fund to do innovative things. And thirdly, that we are going to do something in which we believe we have added value. For this we joined ICCO Cooperation and Truvalu to create this program that combines these three things”.

How The Fund Works

12 companies will be supported through Business Development Services that will help accelerate the companies’ consolidation and growth process. Of these, 8 companies will receive an investment ranging from 50,000 to 250,000 euros per company during the second year of the fund.

“With the Rural Peace Investment Fund we have an opportunity to combine different vehicles for development. We hope that these companies will form the bridge between what is produced on the territories and more sophisticated markets, and in the end benefiting small producers,” said Andres Bernal, ICCO’s Country Director for Colombia and Ecuador.

Increasing Confidence of Producers Towards Investment Funds

During the launch, there was also a panel discussion about financing alternatives for small and medium enterprises in the agrifood sector. Managers of banks, investment funds and business accelerators discussed the challenges that investment funds face in Colombia, as well as the potentialities for investment in companies. One of the conclusions was that it is needed to increase the confidence of producers and business owners towards the investment funds. These funds are relatively new to them as they are more used to traditional subsidies. The discussion concluded with that it is necessary to cooperate more in the different stages of the business cycle: together banks, private investment funds, business accelerators and international cooperation can continue to promote the growth of small and medium enterprises.

The Rural Peace Investment Fund is part of the Rural Peace project.