PR-L1072 : Development of Associative and Community Platforms for Access to Financing

The objective of this operation is to support the development of small agricultural producers at the base of the pyramid, who are grouped into producer communities and cooperatives. It will achieve this through the provision of long-term financing to Paraguay's first cooperatively owned bank. Small farmer cooperatives face major obstacles in obtaining long-term financing from local banks, and this limits their ability to boost production and achieve better economic returns. To meet this objective, the Opportunities for the Majority Sector (OMJ) will provide a senior secured loan of up to US$6 million to BANCOP, the first cooperatively owned financial entity in Paraguay. IDB loan proceeds will be used to expand BANCOP's agricultural and intermediation portfolio. BANCOP is responsible for providing long-term financing in support of the working and investment capital9 needs of small-scale producers at the base of the pyramid. The transfer of resources to these producers may be made directly or through producer cooperatives. This will support linkages between small-scale producers and cooperatives so that the latter can act as an anchor for the development of rural businesses belonging to small-scale producers.