Connecting impact investment and agricultural development: MEDA bridges the gap

Above: a LEGEND Client standing in front his business

In 2020, MEDA launched a bold Strategic Plan, Towards an Equal World. The plan outlines our ambitious goal of creating or sustaining decent work for half a million people in emerging economies by 2030 by strengthening agri-food market systems, working in partnership with others to drive system-level impact, and most importantly, shifting decision-making from the Global North to the Global South.

Strengthened programming

This strategy has provided MEDA and our stakeholders with a platform to critically reflect and reimagine how our 70-year approach to economic development can evolve. One of the four pillars of our strategy is strengthened programming. Integral to the success of this pillar is our intention to align our impact investments with our donor-funded programming. As the only NGO that has been impact investing for as long as we have been implementing development programming, we see the linkages between the two areas and are frustrated by the artificial barriers that exist between the largely donor-funded world of agricultural development projects and the impact investing world seeking strong returns and impact.

Most agricultural development projects seek sustainable and inclusive growth for the sector and the smallholder farmers who participate in the projects although that growth is often limited by a lack of access to capital. Many impact investment funds seek technical assistance support to help reduce the risk to their investments by helping small agribusinesses to improve their financial and technical skills. However, they often lack an understanding of the wider systemic challenges. These challenges and the opportunities for greater synergy were highlighted in a report by Gatsby Africa which noted that there is significant untapped potential for greater transformational impact if development programming and investment-focused programming collaborate more effectively. For MEDA, because we do both investing and programming, we have been able to overcome some of the challenges of coordination outlined in the Gatsby Africa report, such as a lack of coordination between the two areas.

Understanding market systems and local context

To further advance this approach, we leverage our deep understanding of the market systems in which we work. We gain this knowledge through an integrated market systems assessment done with local partners that identify gaps and opportunities, power dynamics, market risks, community vulnerabilities, and adaptation strategies. Responding to this assessment, programming such as technical assistance to firms, small farmer co-ops, and agri-businesses is paired with strong ESG lensed impact investments designed to meet the identified needs.

This approach is unique and much needed as in our view, much impact investing is driven by enterprise-focused finance that fails to account for the systems within which enterprises operate. Ultimately, we believe that to invest successfully in agri-food market systems we need to understand and address the bottlenecks and weaknesses to channel finance to where it can do the greatest impact and create the most equitable and sustainable returns. In addition, a great deal of donor programming fails to consider an investment readiness lens which limits its ultimate impact and sustainability.

For this approach to be effective, it must be led by our staff and partners in country, in assessments and co-creation of solutions and investment sourcing and placing. Our recently launched Resilience and Inclusion through Investment for Sustainable Agrikultura (RIISA) and Leveraging Equality for Gender-Inclusive Economic Development (LEGEND) projects demonstrate this approach.

MEDA’s work in the Philippines

In RIISA, our local team will act as an innovative financing convener by hosting a series of conversations for cacao stakeholders so that they can learn, share, and ultimately form independent partnerships with each other. Additionally, they will tap into regionalized impact investment associations to build market intelligence networks and ultimately source information about localized cacao deals. MEDA will then apply this market intelligence to uncover previously hidden opportunities and encourage other investors to participate in co-investment and/or follow-on investment opportunities so that capital continues to flow. MEDA’s focus on having its in-country team play an intermediary role by brokering these relations is critical for ensuring the sustainability of the project’s capital shifts as ultimately local stakeholders will need to carry forward these market linkages and continue supporting each other.

MEDA’s work in Kenya

In LEGEND, our in-country team will act as an innovative financing tester by leading the ideation and experimentation of two agri-food financing models: investing in financial institutions and investing in funds. We will work with local financial institutions to launch and/or expand the reach of their financial products and investment readiness programming so that they are on-lending to small medium enterprises (SMEs) that are owned and/or operated by women, youth and/or other socially marginalized actors. The purpose of such efforts will be to ensure that SMEs, particularly those owned and/or operated by persons from non-traditional backgrounds are no longer underserved. In parallel, we will invest in funds and leverage its in-country team’s relationships with fund managers and their portfolio companies to deliver culturally appropriate gender and environmental lens trainings. Providing targeted coaching and using financing at multiple levels of a value chain can help to change the conversation on what is considered acceptable business norms.

Going forward

Both projects illustrate how this alignment between investments and programming is not just a simple process change, it represents an evolution in our trajectory towards achieving our goal of creating or sustaining 500,000 decent jobs by 2030. By continuing to shift power from the Global North to the Global South, forging and harnessing local partnerships to achieve systems-level impact and making agri-food market systems more resilient and sustainable, we will be better equipped to provide decent work opportunities for farmers and entrepreneurs in the Global South and help fulfill the UN’s Sustainable Development Goals.



  • Lindsay Wallace

    Senior Vice President, Strategy and Impact. Lindsay brings over 25 years of experience working in international development and leading economic analysis, impact measurement, program design, and strategy. She has expertise in conducting economic research and modeling in the education, agriculture, and financial inclusion sectors.

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  • Jessica Villanueva

    Jessica Villanueva is MEDA’s Senior Director of Technical Areas of Practice with more than 20 years of management experience, focusing on agri-food market systems, financial inclusion, impact investment, and gender and climate lens investment projects in Latin America, Africa, and Asia.

    View all posts
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