The Agri-Business Capital (‘ABC Fund’) has provided a loan of EUR €800,000 to the Enterprise Cooperative Kimbe (‘Ecookim’) ahead of the 2020/21 cocoa production season. Such advanced financing is crucial in ensuring smallholder farmers do not lose the valuable benefits of being part of a cooperative.
Established in 2004, Ecookim is a union of 29 cooperatives located in rural communities across 12 different provinces in Côte d’Ivoire. Ecookim’s members have a total cocoa production capacity of over 62,000 tons and operate on 85,000 hectares. Ecookim procures raw cocoa from its members, before processing, transporting, storing and exporting cocoa beans.
In Côte d’Ivoire, cooperatives need to provide smallholder farmers with advance financing before they start to harvest and produce cocoa. Without advance financing, 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 investment will enable Ecookim to finance its members ahead of the 2020/21 cocoa season. This will help secure revenue and market access for the smallholder farmers responsible for the cocoa production. The ABC Fund’s loan offers a lower interest rate under more favorable 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.
In addition to the investment in Ecookim, the ABC Fund has provided a follow-up loan to Socak Katana, a separate cocoa cooperative in Côte d’Ivoire. The previous loan provided for the 2019/20 cocoa season positively 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 being able to double turnover, achieving a 40% increase in volume of sales, and a 36% increase in surface area cultivated during the period.
Jean-Philippe De Schrevel, Founder and Managing Partner at Bamboo Capital Partners commented: “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. Access to finance for smallholder farmers in Africa is a serious and pressing issue, but the ABC Fund provides a tangible and credible solution. We are delighted to invest in Ecookim and provide a follow-up loan to Socak Katana ahead of the 2020/21 cocoa season.”
Jerry Parkes, CEO of Injaro Investments, commented: “I take this opportunity to salute the unsung heroes in this story, West Africa’s farmers who have continued to work tirelessly during this global pandemic. I commend the farmers and our investment team in West Africa who have pushed through challenging circumstances to make this investment happen. We are honoured by this opportunity to contribute to rural agricultural livelihoods in Africa and trust that Ecookim and Socak Katana will deliver on the expectations for their 34,000+ members who will ultimately benefit from this financing.”
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