Nonprofit organisation Progreso Foundation, through their coffee trading platform Beyco, have begun accepting impact lenders. The network is a breakthrough innovation that is meant to not only make trade finance more efficient and accessible but to ensure the delivery of quality coffee to buyers, traders and roasters around the globe.
Many producer organisations struggle with gaining access to finance. Often, credit requests are below the minimum threshold and too time-consuming to be meaningful for a financier. Therefore, it was imperative for Beyco to bridge the gap between producer capital needs and the requirements from impact lenders.
Isabel van Bemmelen, Managing Director, Beyco and Progreso Foundation
Impact lenders devise their own procedures, requirements and fees. To reduce the risks in such transactions, they tie credit lines to export agreements that are signed on Beyco. Through this, impact lenders can improve efficiency while verifying and tracking contract execution in real-time. Meanwhile, producer organisations are able to request financing from impact lenders directly through the platform and build a credit history for future loans.
Progreso’s Managing Director Isabela van Bemmelen told BarTalks that the lenders’ fees range from 9 to 12 per cent on a yearly basis. Credits are typically only required for a few months during the harvest-export season because trade finance is volatile and dependent on the users’ capacity to import and export.
Oikocredit and Rabo Foundation are the first impact lenders active on Beyco, which agreed on a quicker scheme of analysing credit applications that they receive, provided that all information submitted to them is complete.
“We finance more than 500 coffee contracts per year and monitoring is very labour intensive. By digitalising the process, we can work more efficiently and support even more smaller cooperatives.”
Eduard Walkers, Regional Director LAC, Oikocredit in Peru
Currently, production companies are capitalising on the synergies provided by Beyco. Frutos de Selva, a cooperative that is composed of 137 Peruvian families, got funding for its export contracts, enabling them to export coffee on schedule and to the required standard. Following this initial experience, they sought out new customers and negotiated contracts for the following year, boosting their sales and helping all the affected families.
Although Beyco was originally developed for coffee, the company expressed willingness to set it up for Cocoa as well because of the several requests it received.
As a foundation, we are dependent on donations to support those big developments, but we would be very keen on doing so. We are reaching out to potential funders in order to do so, as we receive a lot of requests and have gathered much experience in developing, maintaining and onboarding the last four years since we launched Beyco for coffee. The Financier profile is already compatible for both, as financing coffee or cocoa contracts has the same structure.
Isabel van Bemmelen, Managing Director, Beyco and Progreso Foundation
Founded in Amsterdam, Progreso is an NGO with more than 20 years of expertise assisting producer organisations for coffee and cocoa to establish successful enterprises. The foundation introduced a blockchain-based network for trading coffee in 2018 by the name “Beyond Coffee” or Beyco. The platform helps producer organisations gain access to markets and funding while assisting dealers and roasters in offering their customers traceable coffees. Through QR codes, Beyco can be used to share sustainability initiatives (such as CO2 reductions). With 250 buyers and traders, largely from Europe, Asia, and North America, and 350 sellers from Latin America, Africa, and Asia, Beyco’s compensation and impact initiatives currently have over 600 active users in the coffee value chain.
