IVORY COAST – The Agri-Business Capital (ABC) Fund managed by Bamboo capital, has issued loan financing to two cocoa cooperatives in Ivory Coast to enable them provide small-holder farmers with advanced financing for production of the crop ahead of the 2020/21 cocoa season.
Under the agreement, Enterprise Cooperative Kimbe (‘Ecookim’), a union of 29 cooperatives located in rural communities across 12 different provinces in Côte d’Ivoire has clinched €800,000 (US$970,000) while Socak Katana, a separate cocoa cooperative in the country with over 2,700 members received a follow-up loan from previous season’s financing.
Ecookim’s members have a total cocoa production capacity of over 62,000 tons and operate on 85,000 hectares.
Socak Katana on the other hand has a total production capacity of 6,000 metric tons with 8,400 hectares put under cultivation.
They both procures raw cocoa from its members before processing, transporting, storing and selling the cocoa beans to local and international buyers.
“We are delighted to invest in Ecookim and provide a follow-up loan to Socak Katana ahead of the 2020/21 cocoa season.”Jean-Philippe De Schrevel – Founder and Managing Partner at Bamboo Capital Partners
According to Bamboo Capital, the 2019/20 financing to Socak Katana impacted over 3,000 farmers and created four new permanent positions in the cooperative which employed 12 people, representing a 30% increase.
The loan also contributed to Socak Katana doubling turnover, achieving a 40% increase in volume of sales, and a 36% increase in surface area cultivated during the period.
“The ABC Fund has delivered clear on-the-ground impact in the last 12 months. Our investment in Socak Katana ahead of the 2019/20 cocoa season positively impacted thousands of farmers, created jobs and helped the cooperative to scale.
“We are delighted to invest in Ecookim and provide a follow-up loan to Socak Katana ahead of the 2020/21 cocoa season,” said Jean-Philippe De Schrevel, Founder and Managing Partner at Bamboo Capital Partners.
Access to finance for smallholder farmers in Africa is a serious and pressing issue in ensuring smallholder farmers do not lose the valuable benefits of being part of a cooperative.
With the absence of the support, smallholder farmers may sell the cocoa they produce to local traders at a cheaper price for instant payment.
However, by selling through local traders, smallholder farmers miss out on the benefits of selling through a cooperative, such as qualification for certification premiums, including Fairtrade, Rainforest Alliance and UTZ, which provides a higher income.
The ABC Fund’s loan offers a lower interest rate under more favourable collateral terms than traditional financial institutions.
Moreover, local banks typically only disburse loans to cooperatives once the cocoa beans have been delivered into the warehouse at port, leaving a financing gap to cover the cost of cocoa beans collection and purchase, storage and transport from villages to warehouse.
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