Argidius Annual Report 2021
Food: Creating resilient solutions
As the world faces a global food crisis and the war in Ukraine drives up the costs of fuel, fertilisers and food, we examine the critical role SMEs play in enhancing food system resilience. Innovation and collaboration across the food system can have a powerful impact in the creation of more equitable livelihoods, mitigate extreme poverty and boost prosperity. Covid-19 has exposed many vulnerabilities in local and global food systems. SME owners have been working hard to adapt to this new reality. We show just how important it is to support them in the short and long term to work through the current crises, grasp new opportunities and continue strengthening food system resilience.
A message from Donald Brenninkmeijer, the Chairman
At Argidius, we recognise that societal development can be accelerated when robust business models are operating in functional markets. Developing leaders and entrepreneurs, with the support of capital to unlock growth, is also key."
Just as we breathed a sigh of relief after one global crisis, we’re suddenly confronted with another. The Ukraine conflict is impacting the world in ways that would have been unthinkable a year ago and, regrettably, we’re seeing an increase in poverty. Meanwhile, the things we need to survive - water, food and energy - are becoming ever more difficult to access.
While these effects are felt globally, the world’s developing countries are, as ever, hit hardest. There is an increasing likelihood of global recession, meaning supporting our work and our partners’ work is more important than ever. We must continue to create and grow resilient businesses which respect human dignity, poverty, health and mental wellbeing.
At Argidius, we recognise that societal development can be accelerated when robust business models are operating in functional markets. Developing leaders and entrepreneurs, with the support of capital to unlock growth, is also key. Much of our partners’ work is focused on bolstering the resilience of smaller, medium-size enterprises, ensuring they’re connected to a system of learning from other businesses, coaches and mentors, who can transmit their knowledge and experience to address factors such as recession or inflation, cash planning or capital investment schedules. Such mentorship prepares leaders to come through the challenges they face now, and in the future.
Our strategy has not changed for as you will see our impact is gathering pace as we embed best practice, enhance cost effectiveness and increase our leverage; and, as our learnings are adopted and applied by others. Rather, at Argidius we continually seek to better understand the levers for lasting impact and change, and we continue to ‘peel the onion’, going deeper into areas such as food, sustainability and access to capital, examining how best to advocate for the whole sector.
We’ve looked closely at food systems, focusing on how small and medium-size enterprises can overcome barriers to contribute to the food systems of their countries and beyond. This research is enabling us and our partners to ask the right questions, thus coming to understand, for example, the most important intervention points for business during this global crisis.
During 2022, we’ve once more been able to visit our partners and entrepreneurs on the ground in both east Africa and Central America, and we continue to witness their continued drive to achieve success through business, alongside their great optimism for the future. We are deeply inspired by their resolve to realise improvements in society for themselves, their communities and future generations.
As we face up to the challenges ahead, we will continue to look at how partnerships can strengthen the SME ecosystem further from a funder’s perspective, and across new and existing partnerships. For example, an initiative is underway which will find out whether leveraging the learnings from the Coffee Association of Guatemala could accelerate the development of the more nascent Guatemalan Beekeeping Association, AIDAM, allowing both sectors to exchange knowledge. This with a view to progressing beekeeping from infancy to a more mature sector with sustainable, resilient growth.
Whatever is to come in the years ahead, we will continue to focus our efforts on our mission – to tackle poverty through enterprise development. We will continue to bring others on our journey, creating greater impact for our partners, our entrepreneurs and the thousands of employees and communities they serve.
A message from Nicholas Colloff, the Executive Director
The magnitude of our impact has substantially increased, through our strategic partnerships with a small number of high-performing organisations, who are now supporting thousands of businesses each across Latin America and Africa."
Now more than ever, the world is being shaken by multiple challenges that seem to strike at the very heart of our societies. Not only must we recover in the aftermath of the Covid-19 pandemic, but we face the effects of conflict, climate change, and a global hunger crisis afflicting millions of people. Never in our lifetimes has the world seemed more precarious.
It’s why I am personally even more determined to do our bit, through enterprise, to reduce poverty. Covid-19, and now the Ukraine crisis, have emphasised global challenges around food security, proving why we must build more robust, more sustainable, more localised food solutions, as a matter of urgency. So I am glad to say that Argidius continues to develop sustainable livelihoods through its food portfolio, with food representing about a third of the businesses that our partners support.
From a poverty reduction point of view, food can have a transformative effect on livelihoods. Food sends supply chains back into a wide variety of suppliers and small-scale farmers, and has a strong capacity to generate employment. In the African context, we’ve asked ourselves how to genuinely invest in a food system fit to meet current challenges, because agriculture in Africa seriously lacks both investment and robust opportunities to sell products and add value. When investment does come, strong, resilient agricultural and food enterprises can be developed, generating a great deal of employment.
In this year’s financial results, we see a palpable bounce-back from the pandemic, with enterprises supported by our partners showing strong revenue and employment growth. We see that good business support does make organisations more resilient in a crisis. And the magnitude of our impact has substantially increased, through our strategic partnerships with a small number of high-performing organisations, who are now supporting thousands of businesses each across Latin America and Africa.
This year, I believe we’ve really crystallised our work down to discovering the characteristics of a successful, business-development support organisation, then backing those organisations with core organisational finance, rather than programmatic finance. They are enabled to be better at what they do to a greater scale, capturing resources which they wouldn't necessarily have captured before. Thus, our shared deep expertise in business development is really where, together, we’re making a difference.
In this report you’ll read about some of our extraordinary entrepreneurs and partners, from an agri-entrepreneur in a semi-arid region of Kenya using new methods to grow, irrigate and export tropical fruit, to a family of cheesemakers in Guatemala, and a three-generation honey and tourism farm flouting tradition by promoting gender-equity in El Salvador. Each are in their own ways innovating their sectors, making a meaningful contribution to longer term development in their communities and countries. I am proud to work with all of them.