Financing coffee farmers to help save Peru’s trees
Despite its protected status, Peru's Alto Mayo Protected Forest — a swath of Amazonian rainforest twice the size of New York City — has seen some of the country’s highest rates of deforestation. One of the culprits: unsustainable coffee farms. One solution: Providing local coffee farmers the finance to grow sustainable, world-class coffee beans while conserving this globally significant forest.
COOPBAM is a certified fair trade and organic coffee cooperative with more than 500 members who commit to sustainably using natural resources in the Alto Mayo Protected Forest and to zero net deforestation. To fulfill contracts with high-end U.S. and European specialty coffee buyers, COOPBAM needs significant working capital reserves to purchase the coffee produced by its members. Over half of COOPBAM’s members cannot afford to provide their product to the cooperative in advance of payments and must accept the low prices provided by middlemen who pay cash up front, creating losses for both the grower and the cooperative.
CI Ventures provided COOPBAM a $US 120,000 working capital loan in September 2018, which was repaid with interest in November 2018. The investment enabled COOPBAM to purchase more coffee from its members than ever before, increasing revenues and profits to their highest levels.
Recognizing the strategic importance of COOPBAM in the Alto Mayo landscape, CI Ventures decided to deepen its relationship in May 2020 by providing a 3-year revolving line of credit of up to US$ 235,000 that can be used to purchase sufficient coffee volumes to fulfill contracts with high-end U.S. and European specialty retailers.
All members of COOPBAM operate within the northern part of the Alto Mayo Protected Forest, which provides vital fresh water to downstream communities and is home to many threatened and endemic plant and animal species. The loan enabled immediate payment to all coffee producers, which in turn builds the cooperative's reputation and credibility, encouraging more producers to become members and to protect the forest.