Thousands of coffee farmers live in poverty. But Neumann Gruppe's $25m sustainable sourcing loan seeks to deploy the power of finance to sustain long-term, economic and ecological viability. Here's how.
"The world keeps drinking more and more coffee, but yet half of the world's coffee farmers today live in poverty." This, according to Catalina Eikenberg, Head of Sustainable Business Unit at Neumann Gruppe, is the reason why the financing model must change.
Providing access to finance to smallholder coffee farmers, along with training and access to market, can help them maximise their incomes and tackle poverty.
" The facility helps to support farmers by ensuring long-term economic and ecological viability. "Neumann Gruppe's new $25 million revolving loan facility, whose subsidiary Neumann Kaffee Gruppe (NKG) is a market-leading green coffee service group, will help support 100,000 farmers across 10 countries over 10 years. The loan's unique structure, with the partner banks – BNP Paribas, ABN AMRO and Rabobank – entering into a Risk Sharing Agreement (RSA) in the event of a farmer default, sits alongside two complementary default guarantees by USAID and the Dutch Sustainable Trade Initiative (IDH).
NKG BLOOM, Neumann Kaffee Gruppe's long-term, sustainable-sourcing initiative, provides farmers with practical tools and knowledge, including access to farming inputs, sustainability consulting and education on coffee markets. Through the sustainable finance facility, farmers will be able to secure, manage and diversify their supplier base towards greener inputs, supporting their sustainability transition through best practice and ensuring long-term economic and ecological viability.