Rwanda’s third coffee cooperative began using shared interest in export credit services in less than a year! The country, known for its rich coffee production industry has had a struggle in the past to finance its cooperatives for a lucrative and sustainable pursuit.
COCAGI coffee cooperative further solidified the country’s claim of shared interest gaining positive ground. Located in the Gishoma district in Rwanda’s western region, COCAGI (Co-operative Des Caféculteurs de Gishoma) started humbly with just over twenty members in the year 2003. After six years, the cooperative now have a membership of 684 coffee growers. The members are considered in the industry as smallholders, with each having a share worth of just $5 only.
In May 2005, the COCAGI was granted a fair-trade certification by the industry authorities, thereby inspiring the cooperative to widen their membership, using more advanced technologies in their coffee production and processing, and finally, using shared interest this year.
Struggling for years, COCAGI buys coffee cherries from other cooperative folks and does the production processes on their own. The cooperative reports that over 84% of their production is due for export while the domestic coffee market purchases their processed coffee.
Also, the two main clients of COCAGI, per its reports, are not fair trade groups. Hence, they do not give advance payments to the cooperatives. These farmers do not have the means and facilities available to engage in the business themselves. This results to the coffee farmers delivering their products to the COCAGI, who in turn has to borrow the cash to purchase the coffee from farmers.
Until recently, COCAGI avails of credits from local lending institutions and banks, a lengthy, taxing process for small coffee farmers and young cooperatives. More than that, such a process opens doors for other stable buyers to exploit the small farmers’ predicament.
But with the export credit convenience offered by shared interest, COCAGI is hopeful of a 60% increase in export and sales this year.
For additional details about this post, please visit: shared-interest.com
