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Agricultural Finance: Colombia

Spotlight Series

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USAID Colombia Producers to Markets Alliance

Partnerships Increase Availability of Finance for Rural Farmers

Due to a variety of factors (land titling, high interest rates, etc.), traditional finance is difficult to obtain for smallholder farmers in Colombia. However, PMA is launching a series of initiatives to address this constraint by facilitating working capital through various value chain actors. For example, through negotiations with PMA, La Compañia Nacional de Chocolates is providing credit to PMA-assisted producer associations to purchase farmers’ cocoa production and provide planting material and training to improve crop quality. The Cocoa Producers Association of Tumaco is providing purchase credit as well as covering farmer transport costs to the processing center to ease the barriers to entry for rural smallholders.

Similarly, coffee buyer Racafe is providing purchase credit to PMA-assisted producer associations as well as quality analyses free of charge to PMA beneficiaries to identify quality coffees that achieve premium prices. In the latex sector, Mineros Nacionales has provided pre-processed latex on credit to PMA partner and processor Rubbercorp to conduct industrial quality tests for latex. By design, all PMA interventions require leverage from public and private counterparts to co-finance program initiatives. To date, PMA has secured $43.1 million in committed leverage from public and private partners; for every $1 of USAID funds committed, in-country partners have committed $3.40 in leverage. Use the link below to follow our progress as these partnerships develop.

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