LightCastle & WeGro Catalyzing Asset Backed Investments

Catalyzing Asset Backed Investments: LightCastle & WeGro

Machine handover ceremony in the presence of WeGro, iDE CSISA-MEA, & LightCastle personnel

LightCastle Partners, in partnership with WeGro, facilitated an Agriculture Machinery financing project as part of the joint venture agreement for iDE CSISA-MEA. For this project, the partnership aims to invest 25+ machinery financing, helping agri entrepreneurs situated in Feed the Future’s zone of intervention (also known as, FTF Zone) to flourish.

LightCastle Partners and International Development Enterprises (iDE) have joined forces to collaborate in the financial need assessment of Agriculture-based Light Engineering MSMEs (also known as ABLE MSMEs) and Machine Service Providers (MSPs), business development assistance for MSMEs and MSPs to increase investment readiness, and loan disbursement on alternative financing models in the agricultural mechanization and agri-based light engineering industries.

The Feed the Future Cereal Systems Initiatives for South Asia Mechanization Extension Activity (CSISA-MEA) is a five-year USAID-funded and CIMMYT-led initiative.

The goal of CSISA-MEA is to increase agricultural resilience, productivity, and profitability by enhancing the competitiveness and effectiveness of agricultural machinery lead firms and generating business opportunities for collaboration with U.S. manufacturing companies, technical institutions, and financial advisory firms.

The activity will also concentrate on training a gender-inclusive workforce, with a particular emphasis on the linked support market actors and manufacturing micro, small, and medium-sized enterprises (MSMEs) in Bangladesh and crisis-affected areas.

The Need for Alternative Investments – Easing the Access to Finance Process for Farmers

Traditional financing methods of credit from MFI (Micro Financial institution) and Financial Institutions (i.e. Banks & NBFI) pose many challenges for smallholder farmers, mainly high-interest rates, monthly instalments, and a plethora of documentation followed by weeks of due diligence and background checks.

More About WeGro – WeGro, at its core, is an agri fintech, connecting individual and institutional financiers with farmers and their agricultural projects. Our motto: Investing in Agriculture, simplified. WeGro provides a mobile app platform (both Android and iOS) where users can facilitate finance for agricultural projects, such as cattle, poultry, fisheries, vegetables, etc. With projects in Sirajganj, Pabna, Natore, Keraniganj, Kishoreganj, etc., WeGro is working with over 1,000 farmers across 18 zones in the country.

Almost 10 Million farmers across the country do not have access to finance. With hopes of addressing this problem, WeGro provides investment and guidance to smallholder farmers who cannot access formal financing elsewhere. Additionally, farmers can also avail access to agricultural input and access to markets. All of the projects are insured, monitored, scrutinised and available for the financiers to visit. After the output is produced, we sell the products to their partners (Chaldal, Parmeeda, Bidyanondo Foundation, Khaas Food Limited, etc.), thus ensuring fair prices for the farmers. We take pride in being Shariah-compliant; thus, the financiers receive a share of the profit, and the ROI is higher than other financial instruments.

Innovative financial products offered by WeGro ease the investment process for farmers and provide them prompt support for financing and repayment cycles that match their business cash flow. The investments are secured by the asset itself, posing it less risky for the investors and allowing farmers to enjoy a collateral-free investment. In contrast, in traditional financing methods, they had to keep their personal assets as collateral.

The investee farmer, Mr. Monjur Alam, received an ACI Power Tiller Classic 12 worth BDT 180,000 for a tenure of 1 year. The power tiller was given over in a handing-over ceremony in the presence of personnel from iDE CSISA-MEA, WeGro, LightCastle Partners, and ACI Motors.

The event attendees were as follows – Nazmul Kabir Al-Mehmud, Senior Business Consultant, LightCastle Partners; Shah Mohammad Yeaamin Ismile, Operation Lead, WeGro; Jotirmoy Mazumdar, Market Coordinator (Specialist – Market Development), CSISA-MEA; Mazed Hossain Mahin, Senior Technical Specialist – Private Sector Engagement, CSISA-MEA, iDE; Anwar Hossain, Officer – Market Development, CSISA-MEA, iDE; Ahmed Moosa Isty, Technical Specialist- Market Systems Development, CSISA-MEA, iDE; Md. Sahabuddin, Dealer, ACI Motors, Cox’s Bazar.

WeGro & LightCastle will continue their due diligence and investment process for further investment facilitation beyond the project period. We aim to set a positive impact with alternative investments in Cox’s Region by providing agri-mechanization financing and working capital financing.

LEARNING SNIPPET

Impact Investments (a sub-branch of Alternative Investments) is an investment strategy that aims to generate specific beneficial social or environmental effects and financial gains. Impact investments may take the form of numerous asset classes and may result in many specific outcomes. The point of impact investing is to use money and investment capital for positive financial, social & environmental results.

LightCastle’s presence in the Alternative Investments landscape over the years –