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IFC-Backed Kenyan SME Project Wins Sustainable Development Prize


IFC-Washington D.C:
Rob Wright

Phone:(202)-473-7997        

Fax:(202)-974-4384

E-mail:
rwright@ifc.org

Kenya Contact:        

Farouk Jiwa        

Honey Care Africa        

Phone:254-2-574-448        

Tel/Fax:254-2-574450        

Mobile:0733-842999

E-mail:
fjiwa@insightkenya.com


Washington D.C., January 7, 2003—Honey Care Africa, an IFC-supported small business whose supply chain has doubled the incomes of some of Kenya’s poorest people, is the winner of a prestigious United Nations sustainable development award.

The firm has received the Equator Prize, a US$30,000 cash award honoring community-based poverty reduction initiatives in countries on or near the Equator, home to the world’s greatest concentrations of both biological wealth and human poverty. Earlier this year the collaboration between Honey Care and its NGO partner Africa Now received $85,000 in capacity building support from Project IDEAS, a $1 million initiative to support innovations in small business development jointly funded by IFC’s SME Capacity Building Facility and George Soros’ Open Society Institute.


“The Equator Prize is an important recognition of the work that Honey Care has been doing in partnership with the donor community,” said Farouk Jiwa, General Manager of Honey Care. “Our company has a very simple vision that I know IFC shares. It’s about people, the planet and profits. We believe that they can all co-exist and not be mutually exclusive.”


Honey Care was launched in 1999 by a group of socially responsible Kenyan businessmen who were seeking to capitalize on opportunities presented by Kenya’s underdeveloped beekeeping sector—both as a way to launch a profitable new consumer product and to raise incomes of the country’s rural poor.


Since then the firm has introduced Kenyan small-scale farmers to commercial beekeeping production methods used elsewhere around the world and successfully built a market for their honey. This has been done though close collaboration with Africa Now, a British NGO with long experience of carrying out rural income generation projects in Kenya linked to the private sector.


“Investing in the capacity building of grassroots partnerships that reach the poorest via commercially sound, market-based approaches is an important part of our SME strategy, and Honey Care is a good example of positive change that can stem from well-designed collaborations between the private sector and NGOs,” said Harold Rosen, director of the World Bank Group SME Department. “Although small, its impact on the lives of the poor people who supply it is large, and we are glad to have supported it at this relatively early stage.”


Honey Care’s business model enables local farmers to become beekeepers via a small-scale financing program whereby their roughly $160 cost of necessary equipment such as hives and protective suits is covered by future sales of honey. Though at times there is individual ownership of hives, the firm prefers to work via local community groups that enable farmers to collectively lease or buy the equipment and receive Honey Care’s technical and management training. Its partner Africa Now is also working to develop this financing program into a sustainable microleasing scheme.


When these relationships are in place, Honey Care then provides a guaranteed fair and mutually-agreeable price for every kilogram of honey produced. After its ‘Money for Honey’ system pays rural beekeepers in cash on the day of collection, the firm processes and sells the honey in Kenyan supermarkets for approximately $2.75 per jar. These innovations together have resulted in much larger volumes of higher quality honey made in Kenya than before, generating revenues for Honey Care of about $110,000 a year. Through its work there are now over 2,500 small-scale farmers involved in beekeeping, each one earning between $200-250 per year—generally double their previous incomes.


With the success of its operations has come a broadening of the company’s goals and together with Africa Now, Honey Care is working toward a private sector driven expansion of services to new beekeepers, overcoming  trade barriers in the European Union, development of the market for honey in Kenya, and seeking fair trade accreditation.


The Equator Initiative is awarded by the United Nations Development Program in partnership with Canada, the World Conservation Union (IUCN), the Nature Conservancy, and others. The jury awarding the prize to Honey Care and 26 other recipients included Nobel Peace Prize laureate H.E. Oscar Arias Sanchez of Costa Rica, 2002 World Summit on Sustainable Development Preparatory Chairman Emil Salim of Indonesia, and others.


As a recipient of the Equator Prize, Honey Care will be involved in a 2003 campaign to improve community-to-community learning and the knowledge necessary for advocacy and policy impact. In this way, lessons drawn from Honey Care will be used to create an enabling environment for the transfer and adaptation of its successful practices on a national and global scale.


IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.