Since July 2017 the Lemonaid & ChariTea Foundation supports the microcredit project of the federal organisation ‘Federación Argentina de Cooperativas Apícolas y Agropecuarieas Limitada’ (FACAAL). FACAAL addresses the financial needs of the low-income farmers, small-scale producers and entrepreneurs in the north-eastern part of Argentina with the development of a financing platform.
FACAAL is a federal organisation that is comprised of 83 cooperatives and farmers associations in 19 provinces across Argentina. The federation takes on a representative role for the conglomerate of cooperatives in giving them a common voice and lobbying power in politics and international programs. Main aim of the work of FACAAL is to strengthen the regional economy. Therefore a number of trainings are offered in different fields, such as negotiation skills, management and commercialization. By providing technical as well as financial resources the cooperatives can expand their skills and new markets can be accessed. The entire process asks for a strong participation and seeks to enable a strong networking activity among the farmers and small entrepreneurs. Another area of specialization is the allocation and administration of financial instruments, such as microcredits. In the past FACAAL has already been able to establish a financing platform by government funds which provides simplified access to financial resources for small entrepreneurs and farmers.
With the financial support of the Lemonaid and ChariTea Foundation the microcredit system will be further expanded. The focus of the current work is on the regions of Misiones, Chaco and Corrientes, north of the city of Santa Fe and the entire metropolitan area of Buenos Aires. These areas are characterized by the highest levels of poverty and social vulnerability within the country. Furthermore in these areas there is little or no access to funding for small-scale farmers and entrepreneurs so far. The allocation of the microcredits by FACAAL takes place in a special level system, which provides an individual selection process and a regular verification. The loans are not allocated to individuals directly but to persons who are part of a solidarity group or cooperative. Each individual group member supports the others and takes the role as guarantor for other participants. The loan amount varies and is well adapted to the needs of the producers and small entrepreneurs. After the allocation of the credits the further development of the project and the individual activities are reviewed every two weeks.
FACAALs work brings tangible added value to the cooperatives
Through the access to financial capital smaller investments and repairs can be made and the necessary equipment and materials can be purchased by the entrpreneurs. Improved infrastructure contributes to increase productivity and also enables the possibility for further processing of agricultural products. This mechanism can be seen at the women’s cooperative ‘Sabor y arte’, which received a micro-credit through the program of FACAAL. The women produce and sell freshly made pasta, bread, cakes and Argentinean sweets. Through the loan the women are able to buy more material and ingredients and thus achieve greater production capacity. Overall by providing the credits, a higher product variety and production amount is accessible. The grants are accompanied by a mandatory training and mentorship program, where commercial and management training for the credit recipients is provided. The project management highlights the positive results and sustainability of the financial support:
‘The entrepreneurs perceive the loans as a way to have confidence in their own abilities and to develop strategies to generate income by themselves.’
The current project aims to improve the initial situation of farmers and small entrepreneurs in the poorer regions of Argentina. Furthermore the project seeks to highlight the importance of the agricultural sector as an emerging sector in the long term. The modality of ‘solidary credit groups’ contributes positively to the social fabric, which opens the space for dialogue. The farmers use this platform for discussions with the goal to include their needs and problems in the government’s agenda.
The large range of FACAAL
Besides working with various cooperatives throughout Argentina, at their headquarters in Rosario FACAAL is working together with vulnerable population groups, such as the transgender community. These groups are allowed to use the premises of the head office and also various training opportunities in coding and IT are provided. Furthermore, in cooperation with the university an afternoon care for children from low-income families has been set up.
The Lemonaid and ChariTea Foundation supports both the development of training programs and the expansion of the fund for microcredits. Through financial support, the project has a larger range and more people can benefit from the microcredit program.
The work of FACAAL contributes to the strengthening of the entrepreneurial sector in 19 regions of Argentina. Based on a financial instrument that is tailored to the respective needs, low-income entrepreneurs and small producers are accompanied and connected. From this starting point, the sector problems are discussed and consequently strategies to improve the current situation are developed. All with the aim to reduce the high poverty rate in the long term.