Fairtrade Access Fund distributes US$3.7m
The Fairtrade Access Fund, established to address the long-term financing needs for smallholder farmers in developing countries, is growing fast.
So far, a total of US$3.7 million has been distributed to seven cooperatives in Latin America, and the Fund is continuing to gather steam. By the end of 2013, the Fund is expected to grow to US$25 million, and will eventually expand to Africa and Asia.
The Fund has now distributed its first long-term and local-currency loans, along with working capital and trade finance loans.
These loans allow farmer organizations to invest in projects that will improve farmers’ income in the long run, but they are the most difficult for farmers to access. A survey conducted by Fairtrade International in 2012 revealed that Latin American Fairtrade farmers report they need over US$ 500 million to cover their financing needs. Over half of that amount would need to be covered by long-term loans. Long-term loans will eventually become the largest portion of all Fairtrade Access Fund loans as the Fund grows.
Most of the loans so far have gone toward trade finance loans (that includes the Fund’s very first loan, to COPROCAEL in Honduras). While trade finance loans are more commonly available, they are still an essential system of support for producers and will continue to play a role in future loans from the Fairtrade Access Fund.
The Fund is a collaboration between Incofin Investment Management, Incofin cvso, the Grameen Foundation and Fairtrade International. I – I