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Honduran producers increase revenue with financing from AgroMoney, a program of IFC, GAFSP, and Grupo Cadelga

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Honduras, December 20, 2021 - A partnership between Grupo Cadelga and the International Finance Corporation (IFC), a member of the World Bank Group, has resulted in a 90% increase in the income of Honduran producers in the departments of Santa Barbara, Comayagua, and Francisco Morazán (Anillo Verde).

AgroMoney is the first microcredit package of its kind in Central America, created with the support of the Private Sector Window of the Global Agriculture and Food Security Program (GAFSP). In this program, farmers receive loans in the form of fertilizers, seeds and irrigation technology accompanied by training programs, which they then pay back at competitive interest rates similar to those they would receive in the formal banking sector. 

After its launch at the beginning of 2019, around US $5 million in credit has been granted to more than 2,500 producers. The program has proven to be successful: A survey of 100 participants from more than 20 municipalities showed that 94% improved the quality and 84% the amount of their production, thanks to the inputs from the financing. IFC has trained participants in best farming practices, irrigation techniques, and diversification, which helps counteract the effects of climate change and is key to varying their sources of income.

With funding from AgroMoney, all producers purchased fertilizers and pesticides, while 40% purchased irrigation equipment and 20% agricultural equipment. In addition to the increase in profits, more than half of the farmers reported having had the opportunity to expand their production area, and about 40% diversified their harvest. In fact, 60% of producers sold their product at a better price, particularly coffee cultivation.

"With the financing, we managed to cultivate more land than normal, which provided an additional income to the family, and with it, I acquired more land and cattle for fattening," said producer Benjamín Muñoz Rodríguez, from the municipality of Arada, department of Santa Barbara.

Sanaa Abouzaid, IFC's Manager for Central America, highlighted the positive impact of the program on the lives of communities. "While the socioeconomic footprint is still smaller in scale, it is clear that it is improving the social and productive environment of the areas." Abouzaid also stressed the business opportunities that the program offers in the future: "Producers are investing in more land. This means that they will have a greater need for financing, which is an opportunity for financial institutions to analyze a new credit offering for the agricultural market in rural areas of the country."

As part of the advisory program, IFC worked with the Cadelga Group's retail network to strengthen their management and customer service skills, primarily aimed at ensuring that these small businesses can enhance their administrative and managerial capabilities to serve the needs of these rural communities. The survey of more than 200 producer customers showed that there was an improvement in the availability and condition of the products, as well as in customer service, which translated into an increase in visits for 49% of the participating stores, and greater satisfaction on the part of the customers who frequent them.

"The program is fulfilling its mission to build a more efficient, inclusive, and sustainable supply and distribution chain. With IFC's experience we have been able to empower producers and we see that they feel dignified with the attention, with the procedure, and with the quality of the products offered by AgroMoney," said Mateo Yibrin, CEO of Grupo Cadelga.

Despite the uncertainties that agricultural cultivation entails, and the recent challenges related to climate change and the impacts of the pandemic, with the AgroMoney service, small producers feel supported and confident. For retailers who participated in the program promoted by Cadelga and IFC, the improvements made were recognized by their customers: more than 90% of respondents are satisfied with the service received and stated that they would recommend their retail store to other producers in the area.

The Private Sector Window of GAFSP is implemented in partnership with the governments of Australia, Canada, Japan, the Netherlands, the United Kingdom, and the United States.

About Cadelga

Grupo Cadelga is a Honduran company leader in generating sustainability and profitability in agricultural producers with presence in Guatemala, El Salvador and Colombia. It represents world leaders in production and strategic quality partners focused on improving crop productivity and animal health, reinforced with a top-notch team willing to make  their crops the best in the region. For more information, visit https://grupocadelga.com/

About IFC

IFC, a member of the World Bank Group, is the world's largest private sector-focused development institution in emerging markets. We work in more than 100 countries, using our capital, experience, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 trillion to private companies and financial institutions in developing countries, harnessing the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit https://www.ifc.org/

About GAFSP

The Global Agriculture and Food Security Program (GAFSP) is a global effort that pools donor resources to fund programs focused on increasing agricultural productivity as a way to reduce poverty and increase food and nutrition security. The Private Sector Window, administered by the IFC and supported by the governments of Australia, Canada, Japan, the Netherlands, the United Kingdom, and the United States, provides long- and short-term loans, credit guarantees, capital and technical assistance to private sector companies and financial intermediaries. It links smallholder farmers to markets by improving their access to finance, technology, expertise, and inputs.


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