Value%20chain%20%20financing

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Harbu Micro Finance
Institution S.co

• Value chain financing
• European microfinance week
• 
  2010
• Luxembourg
  
  

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Main chain supporters

• Harbu Micro Finance Institution Established in
  2005 and is affiliated to Facilitator for Change
  (NGO). Harbu MFI aims at boosting agricultural
  productivity and agricultural marketing by
  supporting value chain development and access to
  financial services. Harbu currently operates in
  13 Branches Having 19,600 clients operationally
  sustainable with OSS by 127 and the PAR to the
  level of lt1

Facilitator for Change (FC) a national NGO
established in 1998 that works with disadvantaged
communities overcome their poverty. It focuses on
enabling them to improve their livelihoods using
their own resources, skills and experiences, with
minimum external support. FC currently has
eight projects in Oromia and Amhara states in
Ethiopia. It is heavily involved in value chain
promotion, especially on soybeans. So far it has
organized about 5,000 farmers into 64 farmer
marketing organizations. It promotes soybean
value chain in Jimma zone.
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Development and implementation phases

• Started in 2006 by FC and Jimma Agricultural
  Research Centre
• Started with smallholder farmers with the aim to
  boost production and productivity and thereby
  ensure the food security of farmers.
• However, after observing an ample opportunity and
  understanding that, beyond the local consumption,
  soybean can further be processed into soymilk

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Functions and Chain Actors
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1. Smallholder farmers

• Illiterate and large family size (Mostly more
  than ten) which exacerbated the level of poverty
  and misery.
• On average, farmers in the area
• Annual earning about 450 USD
• Earning per family member per day, 0.125 USD.

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FMOs roll conditions they were

• They play a role of collection from their
  members
• Primary cleaning, packing and make it ready for
  sale.

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Farmers before organization

• The farmers have been exploited by a long market
  chain which did not add any value to the product.
  
• Local traders and brokers use to cheat farmers
  through distorting weighing scales and
  manipulating prices
• Farmers do not have any control over price.

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who are the women

• Were very poor
• Used to generate their living from fire wood
  collection and selling, charcoal selling, selling
  the labor of their children and engaged in daily
  wage in construction and better off families.
• More than 95 of them were illiterate
• Earn a daily income of less than a dollar a day
  and live dilapidated houses.

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Women at their Factory processings, the soya into
milk
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Retailers

• Includes individual entrepreneurs around Jimma
  city
• The association itself engaged in the wholesaling
  and retailing at door step of the factory

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consumer

• Residence of Jimma town and the surrounding
  (University students (who account for 10 of the
  market)
• Cafeterias, hospitals, and the middle class
  residents.
• A Dutch based organization, Share People,
  supported FC and Harbu in testing the product in
  universities and cafeterias to check peoples
  preferences and tastes. The comments and feedback
  from this market research were encouraging. In
  addition to the Share people a BDS named FFARM
  PLC is also supporting in providing technical and
  advisory services to chain actors.

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Description of the initiative
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Harbus Loan products across the chain actors
Actors

• Lease financing
• Working capital loan

Working capital loan Short term - bullet payment

• Agricultural loan
• Installment loan
• Term loan/ bullet payment

Products

• Processing machine
• Working capital
• Stocking

Purchase of inputs
Purpose
Stocking Semi-processing
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Situations assisted us to succeed

• Inspired results were the very important for our
  success
• The aspiration of the actors and promoters
• Proven sustainability of the program through
  different indicators that has high returns and
  bringing changes in the livelihood of the very
  poor

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VCF initiative for Small holder farmer

• Farmers are no longer dependent on a single
  crop.
• Their income raised by more than 20 and improved
  the fertility of their soil which as a result
  reduced the fertilizer costs.
• They are now more able to grow crops for the
  market, and they can get loans to increase their
  productivity and incomes.
• Their ability to organize and promote sustainable
  local development has been increased.

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Then what for FMOs

• They have a reliable buyer for their product
• Raised their profits by over 15 and improved
  their ability to serve their members.
• The relation between the womens association and
  the FMOs has improved the reputation of these
  farmer groups.

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Purchase committee of FMOs
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Soybean stock
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The women today

• Those poor women whose income was less than a
  dollar a day and now working together in the
  association have also benefited much.
• Today at minimum they could able to get five
  bottles of milk a day (25 birr a day) which
  increased their income by five fold. .
• Moreover, most of them get employed in the
  factory and fetch income, their social status has
  raised and serving as a model for other poor
  women in Jimma town.
• Get mental satisfaction as they mentioned during
  group discussion with them

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Women at their Factory processing the soya into
milk
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Harbu as promoting organization

• Increased its portfolio and its clientele base by
  20.
• Lowered the risk of default by working with
  several actors in the chain rather than with
  individual players.
• Reduced its transaction costs by at least 20.

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Positive Impacts of the initiative

• Improve farmers income and farming systems.
• Improved the soil fertility of the land and
  reduces the fertilizer cost of farmers.
• Environmentally friendly business enterprise.
• Increase in income means many things sending
  children to school, improve health status, and
  overall livelihood improvement of communities.
• Capacity of FMOs strengthened to promote
  sustainable local development
• Market opportunities for producer farmers and
  employment opportunity for urban women and youth
  created.

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Hampered situations

• Lack of initiation and willingness by some
  promoters
• Lack of proven/tested references for value
  chain developments in Ethiopia for smallholder
  producers
• Absence of soft regulation to enforce local
  contracts and quality standards
• High electric interruptions and shortage which
  might affect the function of the processing
  machine.

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Enjoy soymilk!
Thanks!