Greenland Fedha Limited
Status: Proposed investmentWhy disclosure?
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In case of questions
We welcome feedback on this proposed investment opportunity for FMO. The ending of the proposed investment phase is indicated on the right side of this page. In case of questions, please contact us at disclosure@fmo.nl
Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our prospective customer?
Greenland Fedha Limited (GFL) is a microfinance institution in Kenya that does not take deposits. It is fully owned by the Kenya Tea Development Agency Holdings (KTDA), which established GFL to provide credit to smallholder tea farmers. KTDA is the leading management agency for small-scale tea farmers in Kenya. Most tea in Kenya is grown on small farms, with KTDA members' farms averaging between half an acre and one acre. KTDA's mission is to provide effective management services to the tea sector for efficient production, processing, and marketing of high-quality teas, and to invest in profitable ventures along the value chain for the benefit of shareholders and other stakeholders.
What is our funding objective?
FMO will provide a USD 20 million loan to Greenland Fedha to support the expansion of its loan portfolio. The loan will be financed equally by FMO's balance sheet and MASSIF. FMO’s financing will further support GFL in reaching its potential of 700,000 tea farmers.
Why do we want to fund this investment?
GFL will use the loan to expand on-lending to low-income households (smallholders) in Kenya's tea sector, providing a variety of affordable financial services. Our funding allows GFL to offer high-quality and affordable loans to 700,000 tea smallholders, supporting their economic empowerment. Loans are used for buying agricultural inputs and tea farming tools, supporting microbusinesses, and paying school fees. The proposed investment is labeled 100% RI and 100% Green.
What is the Environmental and Social categorization rationale?
The client is assessed as a category B direct investment due to its close dependence on KTDA and not operating as an independent financial institution. The main environmental and social (E&S) risks for GFL are related to PS1 (Environmental and Social Management System, including policies and procedures for E&S risk management) and PS2 (terms and working conditions of GFL employees). The risk associated with Client Protection Principles is deemed to be medium due to GFL's conservative credit policy, focusing on providing suitable credit at minimum cost to farmers and raising financial literacy. FMO analyses risks from different perspectives and assessments. In the case of microfinance investments, the E&S classification is typically low because the exposure generally is limited to retail and micro-entrepreneurs. The risks that might come with microfinance investments, such as, among others, over-indebtedness, transparency of interest rates, and responsible pricing, are covered by FMO in other assessments such as the Client Protection Principles (CPPs). In case of high contextual risk, a human rights assessment can be carried out.
More investments
| Date | Total FMO financing |
|---|---|
| 10/6/2020 | EUR 0.10 MLN |
| 6/19/2024 | USD 7.50 MLN |
| 6/19/2024 | USD 10.00 MLN |
| 5/1/2025 | USD 10.00 MLN |
- Website customer/investment
- http://gfedha.com/
- Region
- Africa
- Country
- Kenya
- Sector
- Financial Institutions
- Publication date
- 5/1/2025
- Deadline for feedback
- 5/31/2025
- Total FMO financing
- USD 10.00 MLN
- Funding
- MASSIF
-
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - B