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Supporting Neumann Kaffee Gruppe and its Farmer Financing Unit

Project Details

CLIENT

Ibero Uganda Limited / MasterCard Foundation / Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)

YEAR

2017

COUNTRY / REGION

Uganda / Sub-Saharan Africa

EXPERTISE

Agricultural Finance

Digital Solutions

KEY TOPICS

Agricultural Value Chain Finance

Small Holder Loan Delivery Schemes

Analytics

CONTACT

Dörte Weidig

Coffee in Uganda is mostly produced by smallholder farmers with very low levels of productivity. This stems from the lack of reliable access to agronomic skills, inputs, finance and markets. Aiming to improve the production capacity of farmers in a commercially viable manner, Ibero Uganda Limited, a subsidiary of the largest green coffee trader in the world, Neumann Kaffee Gruppe, established the Coffee Farmers Livelihood Enhancement Project together with IPC GmbH and other partners. The project presents an ecosystem of complementary services to address the various challenges by 2021.

Ibero contracted IPC to set up and manage a Farmer Financing Unit (FFU) within its trading operation. The FFU offers tailor-made financial products to smallholder coffee farmers through a sophisticated partnership with non-financial institutions, creating an innovative service delivery model that is low-cost and highly effective. IPC is also implementing new IT solutions to facilitate data collection, control and tractability of fieldwork and credit risk analysis.

Setting up the FFU

  • providing consulting support on strategic and conceptual management
  • providing advice on a microlending strategy suitable to smallholder farmers
  • developing a business plan and financial model to orient the FFU’s development
  • establishing a risk management framework and lending procedures to ensure compliance and accountability
  • developing products, workflows, processes and procedures for the FFU
  • coordinating with other stakeholders on training measures about fertilizer use, good agricultural practices, and financial literacy
  • coordinating with local partners, especially farmer groups, on measures to enhance value-chain efficiency
  • supporting the establishment of distribution and mobile payment infrastructures
  • setting up further partnerships with local actors and supporting institution-building in a sustainable way
  • building staff capacity and training local staff on-the-job for various tasks within the FFU

Implementing IT solutions

  • customising the data-capturing smartphone application to the local environment of coffee farmers
  • integrating the data capturing application into the workflow of financing services offered to coffee farmers
  • guiding the integration of a lending module, the smartphone app, Ibero’s warehouse system and a mobile money platform to allow farmers to receive mobile money advances and repay in mobile money
  • implementing control mechanisms for operational staff (incl. GPS mapping)
  • conducting on-the-job training and coaching for operational staff: analysing and managing clients with automated tools (data capturing application and IPC Analytics) with support of smartphones and tablets

Key Achievements & Media

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