Coffee fund helps small farmers in developing countries to obtain credit
Ministry of Foreign Affairs - 15 November 2005
The Dutch Minister for Development Cooperation, Rabobank and Solidaridad are launching a new guarantee fund today that will enable small and medium-sized agricultural companies in developing countries to obtain affordable credit more easily.
This Sustainable Agriculture Guarantee Fund will be employed to extend credit guarantees to local banks in South America, Africa and Asia and this will in turn enable the banks to provide sustainable loans to agricultural co-operatives. These loans will be used for the production and export of sustainable, certified agricultural products such as coffee.
The fund guarantees the loans extended by financial parties in developing countries. This provides the local banks with greater security, while the agricultural entrepreneurs benefit from better credit conditions. The fund has received launch capital of two million euros. The objective is to acquire new partners and to raise the total amount of capital to 20 million euros over the next three years. This initiative will improve the incomes of some 100,000 farming families who live off the cultivation of sustainable coffee.
Last year, Minister Van Ardenne (Development Cooperation) issued a Call for Ideas to appeal to companies in the Netherlands and abroad to present proposals that are consistent with the Dutch ministry’s sustainable development policy. This Agri Fund is now the eleventh public private partnership connected with this appeal.
The Rabobank Foundation is closely involved in the Agri Fund. “For more than thirty years we have been providing micro credits to people in developing countries who want to start a small business, such as coffee farmers. This new fund will help us to continue to support these small farmers in association with Rabobank International,â€? says Bart Jan Krouwel, director of Socially Responsible Enterprise at Rabobank. Through the Rabobank Development Program, Rabobank focuses on the development of rural banks in developing countries in order to increase access to financial services.
Solidaridad is an ecumenical development organisation that, through its introduction of the Max Havelaar and Utz Kapeh hallmarks, has gained extensive experience in marketing fair-trade products and in expanding market access for coffee producers. The support that Solidaridad will provide to the Agri Fund in the form of transferring knowledge and training is a natural extension of this experience.
