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CUs help Mexican banana growers prosper
COAHAYANA, Mexico (4/5/12)--The World Council of Credit Unions (WOCCU)  is working with Caja Providencia, a local credit union, to develop a value chain financing program that ensures that banana growers in Mexico's Michoacan state get a fair market price for their crop to better support themselves and the local economy.

Click to view larger image Dora Leticia Garibo, an acopiador, or collection and processing agent, supports the value chain network launched by World Council of Credit Unions with Caja Providenica to assure banana growers in rural Mexico get fair prices for their crops.
Value chain financing provides financial infusion to farmers at key points in the planting, growing and harvesting cycle so they have sufficient funds to operate their businesses.  Acopiadors, or collection and processing agents, serve as the link among the grower, the buyer and the credit union, through which funds are provided,to support the farming cycle. Farmers who are Caja Providencia members can become part of the value chain process and gain access to additional credit union services.

"The value chain model has worked well to support rural growers, producers and craftspeople throughout Latin America," said Brian Branch, WOCCU president/CEO. "The partnership with Caja Providencia has made a positive difference in the lives of the members involved in this program."

The partnership is part of WOCCU's five-year Cooperative Development Program (CDP), supported by $4 million in funding from the U.S. Agency for International Development.  The program focuses on creating and testing agricultural and financial tools to improve rural economic and financial sector development, personal income and food security. Results from the program, which runs through 2015 and also operates in Guatemala, will include a scalable methodology to increase small farmers' access to markets, inputs and technical assistance.

The programs benefit credit unions by increasing member growth and participation. Caja Providencia, which serves 40,000 members, provides funds for the value chain model and provides the organization necessary to secure market-based prices from buyers.

Click to view larger image Teams of workers, called cuadrillas, spend entire days loading up to 23 tons of bananas into semi-trailer trucks for shipment to market in Mexico.(Photos provided by the World Council of Credit Unions)
WOCCU's partnership with Fideicomisos Instituidos en Relacion con la Agricultura, a development bank that offers credit and guarantees, training, technical assistance and technology-transport support to Mexico's agriculture, livestock, fishing, forestry and agribusiness sectors, has helped Caja Providencia members gain access to subsidized loans to grow their business.

The grower uses the loans, which currently have a 1.5% interest rate, to invest in better equipment, machinery and other inputs that will lead to higher quality crops. That, in turn, will increase prices and enable sale to buyers from markets currently out of the farmers' reach.

Members who participate in the program must increase production, improve their livelihoods and offer better financial support to their communities. Currently, a cuadrilla, or team of 15 workers, spends entire days loading up to 1,300 boxes--totaling 23 tons--of bananas into semi-trailer trucks for transport to market. 

For more information about the value chain finance methodology, use the link.
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