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Bujumbura - Burundi coffee growers plan to open their own bank to give out the loans they need to invest in improving production, in an industry which accounts for a substantial chunk of the small east African country's economy.
It will be the first time Burundi coffee growers have joined together to open a micro-bank, Joseph Ntirabampa, chairperson of the confederation of coffee producers' associations, or CNAC, told Reuters.
The coffee industry employs some 800 000 smallholder farmers, almost 10% of the population, growing Arabica beans.
Ntirabampa, whose CNAC organisation has 130 000 members, said it had already collected 600m francs ($389 000), double what the central bank requires to create a micro-financial bank.
“The idea of opening our own bank came due to a serious challenge we face getting loans from local commercial banks,” he said.
“The central bank requires between 200m and 300m francs to open a micro-financial institution. We have now 600m francs in cash, the next step is to ask for registration,” he said. He expects the bank to open in the next few months.
Ntirabampa said the micro-finance will help producers access credit to meet their basic needs and allow them to purchase agricultural items such as fertilisers. CNAC plans for the bank to have capital of 8bn francs in the next three years, rising to 18bn by 2020.
Production of green coffee fell to 9 890 tonnes in the 2013/14 crop year from 24 000 tonnes in the previous 12 months, meaning revenue from the nation’s top hard-currency earner slumped to $23.8m from $66.3m.
Industry regulator ARFIC projects coffee production for the current crop year to reach 21 000 tonnes due to good rains.
ARFIC says the cyclical nature of the crop and land degradation were behind last year's poor harvest, but coffee growers argue a lack of fertilisers and the volatility of commodity prices are the main causes.
Some coffee growers complain coffee is no longer profitable and have decided to switch to other crops such as bananas and fruit.
It will be the first time Burundi coffee growers have joined together to open a micro-bank, Joseph Ntirabampa, chairperson of the confederation of coffee producers' associations, or CNAC, told Reuters.
The coffee industry employs some 800 000 smallholder farmers, almost 10% of the population, growing Arabica beans.
Ntirabampa, whose CNAC organisation has 130 000 members, said it had already collected 600m francs ($389 000), double what the central bank requires to create a micro-financial bank.
“The idea of opening our own bank came due to a serious challenge we face getting loans from local commercial banks,” he said.
“The central bank requires between 200m and 300m francs to open a micro-financial institution. We have now 600m francs in cash, the next step is to ask for registration,” he said. He expects the bank to open in the next few months.
Ntirabampa said the micro-finance will help producers access credit to meet their basic needs and allow them to purchase agricultural items such as fertilisers. CNAC plans for the bank to have capital of 8bn francs in the next three years, rising to 18bn by 2020.
Production of green coffee fell to 9 890 tonnes in the 2013/14 crop year from 24 000 tonnes in the previous 12 months, meaning revenue from the nation’s top hard-currency earner slumped to $23.8m from $66.3m.
Industry regulator ARFIC projects coffee production for the current crop year to reach 21 000 tonnes due to good rains.
ARFIC says the cyclical nature of the crop and land degradation were behind last year's poor harvest, but coffee growers argue a lack of fertilisers and the volatility of commodity prices are the main causes.
Some coffee growers complain coffee is no longer profitable and have decided to switch to other crops such as bananas and fruit.
