Fairtrade co-operatives receive access to long-term funds
29 Jul 2013
Smallholder farmers in Latin America have received almost USD 4 million towards long-term development.
A number of farmer co-operatives are the beneficiaries of loans from the Fairtrade Access Fund, established by Incofin Investment Management, Incofin cvso, the Grameen Foundation and Fairtrade International. By the end of the year, the fund is expected to reach USD 25 million and expand to Africa and Asia.
Long-term loans that allow farmer co-operatives to invest in projects to improve income in the long run are one of the most difficult to obtain, according to Fairtrade International.
Last year, Fairtrade International found that Latin American farmers need USD 500 million to cover their financing needs. Over half of that amount would need to be covered by long-term loans. Long-term loans will eventually become the largest portion of all Fairtrade Access Fund loans as the Fund grows. The Fund also offers working capital and trade finance loans.
The Fund’s first long-term loan was given to COCLA, a Peruvian coffee and cocoa cooperative. The two-and-a-half-year, USD 370,000 loan will allow COCLA to invest in new equipment for drying coffee and cocoa.
A 24-month loan given to the non-profit savings and credit programme of the Peruvian cooperative, NORANDINO, is the Fund’s second long-term loan and also the first given in a local currency. Two million Peruvian Soles (approximately USD 760,000) will allow the extension of financing for coffee farmers.
In Nicaragua, a USD 350,000 trade finance loan was granted to the coffee co-operative UCASUMAN. This will allow the body to purchase Fairtrade-certified coffee from the smaller co-operatives that make up UCASUMAN.
The Honduran co-operative COAGRICSAL, which has 15 years of experience in the coffee production sector, was granted a loan of USD 600,000. This will aid the purchase of coffee from members, and will also allow the export to European and American markets.
Other co-operatives that have benefited include, COCAFCAL in Honduras that received USD 500,000 to allow purchases and export; and UCOSEMUN(Nicaragua), which applied for a working capital loan of USD 500,000 to finance five member co-ops in preparation for the 2013/2014 harvest season.
