Similar to the past few weeks, we continued refining our presentation and collecting data to confirm our hypotheses. Today we met with a financial consultant to learn about a recent study conducted to analyze existing debt in the coffee sector. An important recommendation in our strategic plan is that the availability of credit will need to be expanded to help the industry recover from chronic underinvestment and severe leaf rust outbreaks.

The quantity of loans provided to the coffee sector, especially from private banks, has been steadily decreasing. After leaf rust decimated the coffee harvest (an estimated 74% rate of incidence in 2013), many farmers couldn’t meet short-term debt obligations and were subsequently forced to default on their loans.

Government initiatives have attempted to increase the availability of capital, but many producers are unable to participate in new programs due to their post-crisis credit ratings. While a lack of investment from banks is an issue, it’s important to recognize that a lack of qualified borrowers is equally as detrimental to the sector’s recovery.

The additional insight gained from this week’s meetings will help guide our schedule for the next few weeks, which will include meetings with USAID, a local think-tank, and follow-up visits with the financial consultant.

The Volunteer

Scott Argyres

Associate, FBG-Fund Statistics

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