Projects

Resilient Cocoa Farming

100% Confirmed Amount = € 100.000,00
Reserved Amount = € 0,00
€ 100.000,00
100% Funded
6 mth

term

5%

a year

biannual

instalment

B+

rating

rural_development

Rural development

2. Zero Hunger

SDG 2. Zero Hunger

8. Decent Work and Economic Growth

SDG 8. Decent Work and Economic Growth

11. Sustainable Cities and Communities

SDG 11. Sustainable Cities and Communities

Small cocoa producers feeding the planet, from Peru.

Impact

Project’s impact:

  • Promotion of an inclusive value chain by joining 3.000 local producers who have access to an international export value chain.

  • Better working and financial conditions for small producers, who own less than 2 hectares of land.

  • Rural poverty reduction: smallholders will receive a higher profit margin for their produce, which can be allocated to more than pure subsistence.

  • Contribution to the Company’s social mission, by ensuring cash payments at the “farm gate” to the farmers and early payments at a premium to the Company. The company can then reinvest the money in training, education, social support to the farmers and their families, health support and help with organic and fair-trade certifications.

  • Gender quality promotion - the company is fully owned by its female CEO, who runs a senior and experienced team.

  • Incentive to organic products growth: all the cocoa produced is organic and certified by a third party, that, among others.

  • Incentive to reducing child slavery – the chocolate certification guarantees that all the processing and procurement is free of child slavery labour, and there is no tolerance for any abusive labour practices.

  • Contribution to the environmental protection of the Selva Region, in the Peruvian Northern Highlands: A shade crop, cocoa can be grown in forests and agroforestry systems, thus helping to enrich soils and protect them against erosion.

Project Information

The goal of this campaign is to provide production and export financing to a fair trade, certified, female owned and female-led, Cocoa aggregator, processor, local seller and exporter, operating with more than 3,000 local producers in the Northern regions of Cajamarca, San Martín and Amazonas and the central region of Huánuco – the four regions collectively producing 55% of the Peruvian yearly total cocoa produce, for a total aggregate of 23,400 Metric Tons per year.

The Company, is in Tarapoto (San Martin) and concentrates 10% of the local market share, ranking as the third largest cocoa bean marketer in Peru. Its vision is to improve the quality of life of its farming partners, offering training and technical assistance, and to be recognized by the local and international community as suppliers of inputs for quality, developing customized products, with commitment, ethics and trust. This vision and strategy is reinforced by several certifications, from which Fair Trade (Comércio Justo) and USDA Organic should be highlighted.

The Fair Trade Certification is particularly relevant, as it places the Company in the 13% out of the 33million global cocoa producers that have achieved such certification which, among others, ensures that the cocoa processing and procurement is free of child slavery labour – the Fair Trade certification is particularly strict in this regard, and with yearly inspections in the sourcing farms, has no tolerance for any abusive labour practices.

Peru is the sixth largest producer of cocoa worldwide, the second largest organic cocoa producer (after the Dominican Republic) and the number one fair-trade organic cocoa producer worldwide.

The worldwide demand for cocoa is growing and especially the demand for certified cocoa is expected to continue to grow in Europe over the next years, with two clear increasing trends: search for sustainable (certified) chocolate products, i.e. cocoa bean production that complies with social, environmental and economic aspects and where the whole process is successfully certified by a third party; and towards authentic ingredients and single origin cocoa products.

Less than 10 years ago, thousands of farmers used their plots in the Northern Highlands of the Selva region to grow coca - while coca provided a steady income in remote regions, the illicit crop also brought with it the violence of drug traffickers and their allies. The government was eager to eradicate it and with the collaboration of the military, police, local, regional and national governments and initiatives from international donors and the private sector, Peruvian coca farmers were converted to cocoa (and coffee) farming and Peru has, in the last years, quickly built a global reputation for producing traditionally cultivated, shade grown, high quality cocoa beans.

The funds raised through this campaign will be used as Transactional Working Capital to provide liquidity to the Company from its procurement and processing stage, all the way through its exports.

Financial Viability

Transactional Working Capital is a short-term debt financing asset that allows the producer/aggregator/seller to receive advance/early payments and the buyers to delay their payments.

In commercial sales, standard market practice for payments is between 30 to 90 days from the time when the seller issues its invoice – such payment terms usually strain the cash availability of the seller for its own procurement, while allowing the buyer to hold on to their cash for longer. Often, the seller’s working capital gap is resolved by accessing traditional bank financing, which usually requires to be over-collateralized over hard assets (i.e. factories, buildings, machineries). However, due to the elevated requirements demanded by banks as guarantees for the loans, impossible to meet for smallholders, such bank loans seldom resolve any working capital gap.

Transactional Working Capital fills this gap without the need for collateral. That, in turns, obtains the following results for both the smallholders and the aggregator:

  • Liquidity to procure raw produce – the aggregator/processor is able to grow its business by increasing the level of raw material procurement to fulfil new orders for its international buyers, without waiting for payment from existing buyers.

  • Premium Prices - The producers receive a premium price that reflects the certified and fair trade value of the cocoa, resolving the cash pressure and eliminating the need to provide discounts to the buyer, in return for early payment.

  • Higher profit margin that can be reinvested: the higher profit margin can then be allocated not only to pure subsistence but to invest in capacity building of technical agricultural skills and technologies, improving production standards and yield investments in organic, fair trade and quality certifications.

WCA maintains a Trade Credit Insurance Policy with a global insurance company providing worldwide trade credit insurance, surety, and collections services, with a strategic presence in 50 countries. The Project repayment will be guaranteed under such Trade Credit Insurance Policy, which effectively protects GoParity lenders from default in a credit related event (e.g. insolvency, bankruptcy). The policy covers against losses from Insolvency, Protracted Default and Political Risk and covers up to 90% of the value of the underlying commercial transaction financed by WCA. As WCA provides up to 80% financing to any underlying commercial transaction, the policy in essence covers more than WCA’s entire financing.

100% Funded
6 mth

term

5%

a year

biannual

instalment

B+

rating

rural_development

Rural development

2. Zero Hunger

SDG 2. Zero Hunger

8. Decent Work and Economic Growth

SDG 8. Decent Work and Economic Growth

11. Sustainable Cities and Communities

SDG 11. Sustainable Cities and Communities

Small cocoa producers feeding the planet, from Peru.

100% Confirmed Amount = € 100.000,00
Reserved Amount = € 0,00
€ 100.000,00

Impact

Project’s impact:

  • Promotion of an inclusive value chain by joining 3.000 local producers who have access to an international export value chain.

  • Better working and financial conditions for small producers, who own less than 2 hectares of land.

  • Rural poverty reduction: smallholders will receive a higher profit margin for their produce, which can be allocated to more than pure subsistence.

  • Contribution to the Company’s social mission, by ensuring cash payments at the “farm gate” to the farmers and early payments at a premium to the Company. The company can then reinvest the money in training, education, social support to the farmers and their families, health support and help with organic and fair-trade certifications.

  • Gender quality promotion - the company is fully owned by its female CEO, who runs a senior and experienced team.

  • Incentive to organic products growth: all the cocoa produced is organic and certified by a third party, that, among others.

  • Incentive to reducing child slavery – the chocolate certification guarantees that all the processing and procurement is free of child slavery labour, and there is no tolerance for any abusive labour practices.

  • Contribution to the environmental protection of the Selva Region, in the Peruvian Northern Highlands: A shade crop, cocoa can be grown in forests and agroforestry systems, thus helping to enrich soils and protect them against erosion.

Project Information

The goal of this campaign is to provide production and export financing to a fair trade, certified, female owned and female-led, Cocoa aggregator, processor, local seller and exporter, operating with more than 3,000 local producers in the Northern regions of Cajamarca, San Martín and Amazonas and the central region of Huánuco – the four regions collectively producing 55% of the Peruvian yearly total cocoa produce, for a total aggregate of 23,400 Metric Tons per year.

The Company, is in Tarapoto (San Martin) and concentrates 10% of the local market share, ranking as the third largest cocoa bean marketer in Peru. Its vision is to improve the quality of life of its farming partners, offering training and technical assistance, and to be recognized by the local and international community as suppliers of inputs for quality, developing customized products, with commitment, ethics and trust. This vision and strategy is reinforced by several certifications, from which Fair Trade (Comércio Justo) and USDA Organic should be highlighted.

The Fair Trade Certification is particularly relevant, as it places the Company in the 13% out of the 33million global cocoa producers that have achieved such certification which, among others, ensures that the cocoa processing and procurement is free of child slavery labour – the Fair Trade certification is particularly strict in this regard, and with yearly inspections in the sourcing farms, has no tolerance for any abusive labour practices.

Peru is the sixth largest producer of cocoa worldwide, the second largest organic cocoa producer (after the Dominican Republic) and the number one fair-trade organic cocoa producer worldwide.

The worldwide demand for cocoa is growing and especially the demand for certified cocoa is expected to continue to grow in Europe over the next years, with two clear increasing trends: search for sustainable (certified) chocolate products, i.e. cocoa bean production that complies with social, environmental and economic aspects and where the whole process is successfully certified by a third party; and towards authentic ingredients and single origin cocoa products.

Less than 10 years ago, thousands of farmers used their plots in the Northern Highlands of the Selva region to grow coca - while coca provided a steady income in remote regions, the illicit crop also brought with it the violence of drug traffickers and their allies. The government was eager to eradicate it and with the collaboration of the military, police, local, regional and national governments and initiatives from international donors and the private sector, Peruvian coca farmers were converted to cocoa (and coffee) farming and Peru has, in the last years, quickly built a global reputation for producing traditionally cultivated, shade grown, high quality cocoa beans.

The funds raised through this campaign will be used as Transactional Working Capital to provide liquidity to the Company from its procurement and processing stage, all the way through its exports.

Financial Viability

Transactional Working Capital is a short-term debt financing asset that allows the producer/aggregator/seller to receive advance/early payments and the buyers to delay their payments.

In commercial sales, standard market practice for payments is between 30 to 90 days from the time when the seller issues its invoice – such payment terms usually strain the cash availability of the seller for its own procurement, while allowing the buyer to hold on to their cash for longer. Often, the seller’s working capital gap is resolved by accessing traditional bank financing, which usually requires to be over-collateralized over hard assets (i.e. factories, buildings, machineries). However, due to the elevated requirements demanded by banks as guarantees for the loans, impossible to meet for smallholders, such bank loans seldom resolve any working capital gap.

Transactional Working Capital fills this gap without the need for collateral. That, in turns, obtains the following results for both the smallholders and the aggregator:

  • Liquidity to procure raw produce – the aggregator/processor is able to grow its business by increasing the level of raw material procurement to fulfil new orders for its international buyers, without waiting for payment from existing buyers.

  • Premium Prices - The producers receive a premium price that reflects the certified and fair trade value of the cocoa, resolving the cash pressure and eliminating the need to provide discounts to the buyer, in return for early payment.

  • Higher profit margin that can be reinvested: the higher profit margin can then be allocated not only to pure subsistence but to invest in capacity building of technical agricultural skills and technologies, improving production standards and yield investments in organic, fair trade and quality certifications.

WCA maintains a Trade Credit Insurance Policy with a global insurance company providing worldwide trade credit insurance, surety, and collections services, with a strategic presence in 50 countries. The Project repayment will be guaranteed under such Trade Credit Insurance Policy, which effectively protects GoParity lenders from default in a credit related event (e.g. insolvency, bankruptcy). The policy covers against losses from Insolvency, Protracted Default and Political Risk and covers up to 90% of the value of the underlying commercial transaction financed by WCA. As WCA provides up to 80% financing to any underlying commercial transaction, the policy in essence covers more than WCA’s entire financing.

WCA (Working Capital Associates) LLP

Active since
2018
Fiscal Country
United Kingdom
Operating in
Latin America and Sub Saharan Africa
Industry
Investment
GoParity Loans
4
About WCA (Working Capital Associates) LLP

WCA is the only female-owned and led company providing direct financing to value chains of agriculture products from Sub Saharan Africa (SSA) and Latin America (Latam).

WCA follows a themed responsible investment approach which “allows investors to address ESG issues by investing in specific solutions to them, such as renewable energy, waste, and water management, sustainable forestry and agriculture, health products and inclusive finance” (PRI).

The company follows two key themes:

The company also applies a gender-lens to its investments, seeking to finance a significant level of female-led businesses that follow sustainable and responsibly managed standards.

WCA’s goal is to grow value chains by providing access to finance to SMEs, in the framework of three keys SDGs:

The company also applies a “No Harm” Impact Goal, when reviewing its investment opportunities and applying a negative screening to harmful/controversial products and industries.

The team is composed of ten professionals, with senior executive team-members having each 10+ years of experience in Emerging Markets and/or Trade Finance, and a collective experience in financing over USD1 billion in short term debt and Emerging Markets transactions.

Federica Sambiase – Founding Partner and CEO

Andrew Darling – Head of Operations and Structuring

Jorge Luis Cerna Coronado – Latam Origination and Relationship Management

Gathuo Njoroge - SSA Origination and Relationship Management

Alison Durrant - Business Development - New Clients

Alain Nsiona Defise – Board Member (Non-Executive)

Gaëlle Bonnieux - Board Member (Non-Executive)

Guido Boysen - Board Member (Non-Executive)

Matteo Atti – Board Member (Non-Executive)

From January 1, 2021 - Tineyi Mawocha – Board Member (Non-Executive)

You can learn more about the team here.

The Business Model

WCA is headquartered in London and registered with the FCA under the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2017. The company operates using a “commercial finance company” model, by raising funds (in the form of loans and/or co-investments) from international investors, which it then on-lends to borrowers in their target markets.

The company’s revenue comes from the net interest margin between interest received from the borrowers and interest paid to the lenders.

Traditionally, the funds obtained come from impact funds, credit funds, Development Finance institutions (DFIs), and private wealth seeking thematic investments, which provide the company with medium to long-term funding.

The company’s target market is comprised of 2million SMEs that are financially constrained across Africa (#1.6million) and Latam (#0.4million). Specifically, the company is focusing on Peru, Costa Rica, Colombia, Ecuador, Kenya, Rwanda, Tanzania and Ethiopia, with a preference for food value chains.

The company has tailored its services to SMEs, these suffering from the highest levels of transactional financing requests – approximately 58% of transactional finance proposals are rejected by banks, despite the sector globally submitting 44% of all transactional finance proposals. Banks reject such a high volume of proposals for three specific reasons: very cumbersome AML/KYC requirements imposed by regulators, capital requirements such that short-term financing to lower-rated enterprises is unprofitable and constraints on banks’ capital.

WCA follows the Principles for Responsible Investments based on the Ten Principles of the United Nations Global Compact.

In addition to this, WCA has established ESG standards related to investments in controversial sectors and products. The company believes that certain industries, countries, and/or sectors are not compatible with its principles, and therefore will refrain from financing companies that are against its sustainability values.

Track Record

WCA was founded in 2018 by Federica Sambiase – a senior banking & finance professional - who is also the company’s CEO, and who experienced first-hand how traditional commercial banks were not able to adapt to the needs of SME borrowers and to their tailor-made products requirements, especially in regions such as SSA and Latam, where the need for credit is rapidly increasing.

The vision behind WCA was to combine Federica’s 20+ years of finance expertise with her gender-focused and development passion, matured and nurtured as a Board Member with the international NGO Care International.

At the moment, WCA operates with a team of ten exec and non-exec each with 10+ years of experience in Emerging Markets and/or Transactional Finance and a collective experience in financing over USD 1B in short term debt transactions in Emerging Markets.

For the period July-November 2020 (first 5 months of WCA’s fiscal year) WCA has successfully implemented Resilient Farming Finance programs for over 400 Metric Tons of sustainable, certified and specialty coffee and for 120 metric tons of cocoa, for an aggregated value of supported commercial trades of c. USD2million and achieved c. USD15,000 in revenues.

As of today, WCA has a pipeline of over. USD 5M across SSA and Latam, for agriculture value chain financing, to be deployed in Q1 and Q2 2021.

Since inception, WCA has successfully deployed financing worth USD 1M in food value chains, structured as buyer-centric payable financing programs and with financed trade flows from ten suppliers in several countries including Argentina, Uruguay, China, USA, and South Africa. All programs were all repaid in full. The programs’ borrowers were operating in the organic crop protection industry for the African smallholder farming sector in South Africa and affordable beverage targeted to the bottom of the pyramid population in Zambia and Zimbabwe.

The programs addressed WCA’s SDG 8 - Decent work and economic growth, SDG 12 - sustainable consumption and production patterns and, indirectly, SDG 13 Climate Action.

WCA has also been recognized as a relevant industry player, as evidenced by:

1. Partnership with the United Nations’ International Trade Centre, in the context of their gender-focused trade support activities.

2. Partnership with the Kenya Chamber of Commerce.

3. Panel Speaker at the World Trade Development Forum – Ethiopia.

4. Panel Speaker at Sustainability Week Switzerland.

5. Panel Speaker at East Africa Coffee Annual Summit - Kenya.

Promoter Rating: B+

Guarantees

WCA (Working Capital Associates) LLP

Active since
2018
Fiscal Country
United Kingdom
Operating in
Latin America and Sub Saharan Africa
Industry
Investment
GoParity Loans
4
About WCA (Working Capital Associates) LLP

WCA is the only female-owned and led company providing direct financing to value chains of agriculture products from Sub Saharan Africa (SSA) and Latin America (Latam).

WCA follows a themed responsible investment approach which “allows investors to address ESG issues by investing in specific solutions to them, such as renewable energy, waste, and water management, sustainable forestry and agriculture, health products and inclusive finance” (PRI).

The company follows two key themes:

The company also applies a gender-lens to its investments, seeking to finance a significant level of female-led businesses that follow sustainable and responsibly managed standards.

WCA’s goal is to grow value chains by providing access to finance to SMEs, in the framework of three keys SDGs:

The company also applies a “No Harm” Impact Goal, when reviewing its investment opportunities and applying a negative screening to harmful/controversial products and industries.

The team is composed of ten professionals, with senior executive team-members having each 10+ years of experience in Emerging Markets and/or Trade Finance, and a collective experience in financing over USD1 billion in short term debt and Emerging Markets transactions.

Federica Sambiase – Founding Partner and CEO

Andrew Darling – Head of Operations and Structuring

Jorge Luis Cerna Coronado – Latam Origination and Relationship Management

Gathuo Njoroge - SSA Origination and Relationship Management

Alison Durrant - Business Development - New Clients

Alain Nsiona Defise – Board Member (Non-Executive)

Gaëlle Bonnieux - Board Member (Non-Executive)

Guido Boysen - Board Member (Non-Executive)

Matteo Atti – Board Member (Non-Executive)

From January 1, 2021 - Tineyi Mawocha – Board Member (Non-Executive)

You can learn more about the team here.

The Business Model

WCA is headquartered in London and registered with the FCA under the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2017. The company operates using a “commercial finance company” model, by raising funds (in the form of loans and/or co-investments) from international investors, which it then on-lends to borrowers in their target markets.

The company’s revenue comes from the net interest margin between interest received from the borrowers and interest paid to the lenders.

Traditionally, the funds obtained come from impact funds, credit funds, Development Finance institutions (DFIs), and private wealth seeking thematic investments, which provide the company with medium to long-term funding.

The company’s target market is comprised of 2million SMEs that are financially constrained across Africa (#1.6million) and Latam (#0.4million). Specifically, the company is focusing on Peru, Costa Rica, Colombia, Ecuador, Kenya, Rwanda, Tanzania and Ethiopia, with a preference for food value chains.

The company has tailored its services to SMEs, these suffering from the highest levels of transactional financing requests – approximately 58% of transactional finance proposals are rejected by banks, despite the sector globally submitting 44% of all transactional finance proposals. Banks reject such a high volume of proposals for three specific reasons: very cumbersome AML/KYC requirements imposed by regulators, capital requirements such that short-term financing to lower-rated enterprises is unprofitable and constraints on banks’ capital.

WCA follows the Principles for Responsible Investments based on the Ten Principles of the United Nations Global Compact.

In addition to this, WCA has established ESG standards related to investments in controversial sectors and products. The company believes that certain industries, countries, and/or sectors are not compatible with its principles, and therefore will refrain from financing companies that are against its sustainability values.

Track Record

WCA was founded in 2018 by Federica Sambiase – a senior banking & finance professional - who is also the company’s CEO, and who experienced first-hand how traditional commercial banks were not able to adapt to the needs of SME borrowers and to their tailor-made products requirements, especially in regions such as SSA and Latam, where the need for credit is rapidly increasing.

The vision behind WCA was to combine Federica’s 20+ years of finance expertise with her gender-focused and development passion, matured and nurtured as a Board Member with the international NGO Care International.

At the moment, WCA operates with a team of ten exec and non-exec each with 10+ years of experience in Emerging Markets and/or Transactional Finance and a collective experience in financing over USD 1B in short term debt transactions in Emerging Markets.

For the period July-November 2020 (first 5 months of WCA’s fiscal year) WCA has successfully implemented Resilient Farming Finance programs for over 400 Metric Tons of sustainable, certified and specialty coffee and for 120 metric tons of cocoa, for an aggregated value of supported commercial trades of c. USD2million and achieved c. USD15,000 in revenues.

As of today, WCA has a pipeline of over. USD 5M across SSA and Latam, for agriculture value chain financing, to be deployed in Q1 and Q2 2021.

Since inception, WCA has successfully deployed financing worth USD 1M in food value chains, structured as buyer-centric payable financing programs and with financed trade flows from ten suppliers in several countries including Argentina, Uruguay, China, USA, and South Africa. All programs were all repaid in full. The programs’ borrowers were operating in the organic crop protection industry for the African smallholder farming sector in South Africa and affordable beverage targeted to the bottom of the pyramid population in Zambia and Zimbabwe.

The programs addressed WCA’s SDG 8 - Decent work and economic growth, SDG 12 - sustainable consumption and production patterns and, indirectly, SDG 13 Climate Action.

WCA has also been recognized as a relevant industry player, as evidenced by:

1. Partnership with the United Nations’ International Trade Centre, in the context of their gender-focused trade support activities.

2. Partnership with the Kenya Chamber of Commerce.

3. Panel Speaker at the World Trade Development Forum – Ethiopia.

4. Panel Speaker at Sustainability Week Switzerland.

5. Panel Speaker at East Africa Coffee Annual Summit - Kenya.

Promoter Rating: B+

Guarantees

Payments Status: On time

2020-12-18

100% funded

356 investors successfully raised 100.000€

2020-12-02

Open for investment

This campaign is open for investment

Payments Status: On time

2020-12-18

100% funded

356 investors successfully raised 100.000€

2020-12-02

Open for investment

This campaign is open for investment