Improving Access to Pre-Financing for Cooperatives and Coffee Washing Stations

DOWNLOAD FILE

May 1, 2016 - Author:

Improving Access to Pre-Financing for Cooperatives and Coffee Washing Stations
Feed the Future Africa Great Lakes Region Coffee Support Program

David Ortega
Policy Roundtable, Kigali, Rwanda
May 2016

Challenge and Findings
1. Coffee Washing Station (CWS) use pre-financing to pay for coffee cherry upfront. Loans are then reimbursed from the proceeds of coffee sales.
2. Private CWS often receive pre-financing from banks because they have collateral.
3. Cooperative CWS often cannot obtain pre-financing because banks believe cooperatives are mismanaged, and that cooperatives will default on their loans.
4. Bank loan cycles often do not match up with the coffee season. As a result, even when CWS do receive financing, it may not be at the right time.
5. Since cooperative CWS often cannot receive the pre-financing necessary to pay farmers upfront, many farmers sell to private CWS, which do not

(1) advocate for farmers’ needs; 
(2) elicit trust from farmers; 
(3) incentivize farmers to produce high quality coffee; 
(4) increase traceability in the sector.

See also FSP Research Paper 27

DOWNLOAD FILE

Tags: aglc (rwanda and burundi), coffee, fsg presentations, fsp presentations


Related Topic Areas

Rwanda, AGLC


Authors

David Ortega

David Ortega
517-353-2981
dlortega@msu.edu


For more information visit:

Feed the Future Innovation Lab for Food Security Policy
Food Security Group

Accessibility Questions:

For questions about accessibility and/or if you need additional accommodations for a specific document, please send an email to ANR Communications & Marketing at anrcommunications@anr.msu.edu.