The Inter-American Development Bank’s Social Entrepreneurship program will provide $500,000 in financing from a Swedish trust fund to a project to help small farmers in the Peruvian Amazon develop and strengthen the chain of production, processing and marketing of cacao.
The IDB will provide Industrias Alimentarias de la Convencion (INDACO) a $360,000 soft loan and a $140,000 technical cooperation grant from the Swedish Trust Fund for Small Projects Financing.
IDB President Enrique V. Iglesias, INDACO’s chairwoman, Fedia Castro Melgarejo, and INDACO general manager Carlos Melosevich Chico, signed the documents for the financing in a ceremony held last Thursday in Cartagena de Indias, Colombia, during the 7th Inter-American Forum on Microenterprise.
Iglesias underscored the impact of the Social Entrepreneurship Program, which provides financing for projects that combine a strong commitment to community development with sound business practices. “These little big projects might not involve huge amounts of funding but they certainly change people’s lives,” he noted.
INDACO’s largest shareholder is the Association of Cacao Producers of the Valley of La Convencion and Yanatile, which has some 400 members, among them many Machiguenga and Ashaninka natives.
“Our members will now receive a fair price for their production,” said Castro Melgarejo, who besides heading INDACO’s board is also the mayor of the province of La Convencion, which comprises nearly half the department of Cuzco. The project will help cacao producers extract more value from their high-quality crop as well as access national and international markets.
The loan will support the construction and equipment of a cacao processing plant. It will also provide INDACO working capital to finance cacao warehousing and payments for its employees and growers.
The grant component will help strengthen INDACO’s processing and marketing organization, raise its productivity and improve the post harvest handling of cacao. It will also support the marketing and sale of INDACO products and the opening of new markets in Peru and abroad.
Castro Melgarejo also took the opportunity to request the IDB’s support for future development projects her province would like to carry out with its share of the royalties from the Camisea natural gas project, which is in the same Amazon region. “We’re going to receive lots of money and we want to invest it well, in our people’s benefit,” she said.
The Microenterprise Forum was held in Cartagena de Indias, Colombia, September 8-10. The event brought together more than 1,300 delegates from microfinance institutions, credit unions, commercial banks, foundations, social investment funds, non governmental organizations, social investment funds, consulting firms, research centers, regulating agencies, central banks, bilateral aid agencies and international development institutions.