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Rural Farmers’ Cooperative Makes MicroFinance Work Mali’s Sikasso region is known for producing high quality potatoes, but until recently local farmers did not have the resources to reach their trade potential. In January 2005, the principal trading villages in Sikasso joined to form six cooperatives, and together the cooperatives formed the Union Regionale des Commerçants et Exportateurs de Pomme de Terre de Sikasso (URCEP), intending to maximize the potato farmer’s efficiency and provide their members with many benefits including unprecedented access to micro-finance.

negotiations for the new loans included an agreement by us to pay the past due 8 million CFA from the 2005/2006 harvest for all union members,” said Yaya Traoré, URCEP’s president. Mr. Siaka Collibably, URCEP’s Administrative Secretary added, “Normally loans are for 12 months and 2% per month, totaling 24% for the year. However, with the help of GREFA during loan negotiations, we were able to agree on a rate of 1% per month for an 8 month period, totaling to 8% for the year.”

A potato farmers’

cooperative in Mali overcomes major problems caused

by some members’

With micro-finance loans from a rural bank to members of URCEP, the farmers’ potato production soared. However, when URCEP members applied for a new loan for the following year’s crop, the bank firmly declined, because too many members had defaulted on repaying their loans.

“We know that as a result of the loans and the fertilizer we were able to purchase, that everyone had bountiful harvest and yet they did not pay fully. We are all living in similar situations, yet I and others were able to pay,” Mr Collibably added.

delinquent loans

The cooperative approached the Groupe de Recherche d’Etude et de Formation en Agriculture et Arboriculture (GREFA) for help. GREFA advised the cooper-ative’s leaders to resubmit their loan application to cover only the members who had repaid their previous loans in full. URCEP also demonstrated to the bank that the cooperative was making its own attempt to collect payments from the delinquent members, by imposing a small surcharge per kilo of potatoes during transport. GREFA and URCEP were able to secure new loans at even more favorable rates. “The

“Everyone needs to see that if you do not make payments you will not be eligible for another loan,” Mr Traoré asserted. “In reality, if we don’t enforce sanctions, it could be the end of the cooperative. Now they’ve seen the consequences of their actions, they have learned that they must respect how things are done.” URCEP members continue to be optimistic about the advantages of potato producers coming together. The successful negotiations gives new strength to their cooperative, and results in greater profit going to credit-worthy potato producers.


Rural Farmers’ Coope rative MakesMicroFinance Work