Fairtrade is launching a new fund which will meet producers’ demand for long term loans. The Fairtrade Access Fund will launch in Latin America later in the year and expand into Africa and Asia in a second phase.
Today, microfinance is often directed at short-term or pre-harvest loans. With the Fairtrade Access Fund, producers will be able to finance long-term projects like the renewal of their farms or the adoption of new technologies and equipment.
‘In Fairtrade we’ve witnessed how farmers can transform their own lives if they just have the means. The Fairtrade Access Fund will fill a critical gap so producers can drive that change in their communities,’ says Tuulia Syvaenen, Fairtrade International’s Executive Operating Officer.
Fairtrade partners with Grameen Foundation and Incofin Investment Management. The fund aims to raise an initial US$ 8 million -US$ 12 million and reach US$ 25 million by year two. Starbucks Coffee Company has initiated the investment plan with US$ 1.3 million. Further funding will be sought from development organisations and institutional investors.
The fund will not only offer a range of loan types, but also provide technical assistance to farmer organisations, including a new facility that will allow producers to receive timely information on Fairtrade certification practices, crop management and localised market information via their mobile phones.