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Published By Drew Meyers on July 20, 2011
Seattle, Wash.,Â – Global Partnerships, a Seattle-based nonprofit investor, and Sustainable Harvest, a Portland-based specialty coffee importer, announced today that they have collaborated on an innovative loan product to two fair-trade coffee cooperatives in Latin America: Aprocassi, a cooperative of small-scale coffee growers in Cajamarca, Peru; and CafÃ© y Desarrollo/REDCAFES, an association of coffee cooperatives in Mexico serving small landholder farmers. The loans, which were made by Global Partnerships and fully secured by coffee sales contracts from Sustainable Harvest, are helping provide much-needed flexible financing to the regionâ€™s small-scale coffee growers.
â€œWith the help of Sustainable Harvestâ€™s support and expertise, we have created and executed a loan product that is finely attuned to the needs of Latin American coffee farmers,â€ said Mark Coffey, Global Partnershipsâ€™ Chief Investment Officer. â€œThe collaboration reflects our shared commitment to helping underserved populations in Latin America increase their income and improve their lives.â€
â€œWe are excited to work with Global Partnerships on this new opportunity to support sustainable smallholder coffee cooperatives in Latin America,â€ said David Griswold, President and Founder of Sustainable Harvest. â€œOur partnership is facilitating access to credit for coffee farmers in many remote communities, enabling them to increase their household income and build their assets by selling specialty coffee to the global market. Together we can demonstrate it is possible to stimulate economic growth, social impact, and environmental stewardship in rural farming communities.â€
Global Partnerships (GP) finalized and disbursed the loans to Aprocassi and CafÃ© y Desarrollo/REDCAFES in July 2011, and March 2011, for $465,000 and $498,000, respectively. The loansâ€™ structure includes two innovative components. First, both loans are secured by coffee sales contracts signed between each cooperative and Sustainable Harvest, which means that Sustainable Harvest has agreed that it will purchase a certain amount and standard of coffee from the cooperatives and that it will repay Global Partnerships once the coffee shipment is made. This reduces the risk of default for Global Partnerships and its investors.
Second, the loan terms allow the cooperatives to receive an initial disbursement, pay down the loan as coffee is shipped and then receive additional disbursements from Global Partnerships without going through an additional closing process. This lowers costs for the cooperatives and allows them to provide more flexible terms to its members, such as providing much-needed credit before the coffee harvest cycle, when farmers need to purchase inputs such as seeds and fertilizer as well as pay living expenses.
GP made the two loans from its fourth fund, Social Investment Fund 2010, a $25 million debt fund that loans capital at low cost to a select portfolio of microfinance institutions and cooperatives that have both a sustainable business model and display an exceptional commitment to improving the lives of their borrowers.
The two organizations are strong examples of the type of partners GP seeks. They provide not only low-cost credit to members but also a range of other services that help members increase their income and improve their lives, including access to coffee importers such as Sustainable Harvest; help with fair-trade and organic certification; access to lower-cost inputs such as fertilizer and coffee processing services; guidance on productivity-boosting techniques; and social programs such as health education.
The cooperatives associated with CafÃ© y Desarollo/REDCAFES operate in five of the poorest states in Mexico, Veracruz, Puebla, Oaxaca, Guerrero and Chiapas. One hundred percent of its 1,500 members are fair trade certified, and 80 percent are organic certified. One hundred percent of Aprocassiâ€™s 400 members are fair trade certified, and more than 80 percent are organic certified.
About Global Partnerships:Â Global Partnerships (GP) is a Seattle- and Managua-based nonprofit that expands opportunity for people living in poverty by investing in microfinance and other sustainable solutions to poverty. As of March 31, 2011, GP had $40.2 million in capital invested in 28 microfinance partners in seven countries in Latin America. http://www.globalpartnerships.
About Sustainable Harvest:Â Sustainable Harvest is a specialty coffee importer that uses the Relationship Coffee model to bring partners together in a sustainable supply chain that serves everyone involvedâ€”from the farmer to the final consumer. Its approach builds direct, transparent market linkages for coffee growers while investing in training and management systems to improve their ability to produce high quality coffee.Â http://sustainableharvest.com/