USAID and the Bank of Abyssinia Provide Credit to Coffee Cooperatives
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2003-094
FOR IMMEDIATE RELEASE
November 7, 2003
Contact: USAID Press Office
Addis Ababa (US Embassy) - During a trip to Ethiopia earlier this month, United States Agency for International Development (USAID) Administrator Andrew S. Natsios, signed a partnership agreement with the Bank of Abyssinia to make marketing credit available to coffee cooperative unions. This USAID initiative will enable coffee cooperative unions to expand their purchase of coffee from primary cooperatives, thereby enhancing smallholder coffee growers' access to the market. New credit will have an immediate benefit for the three coffee cooperative unions with whom USAID works, supporting dozens of local primary cooperatives and thousands of smallholder farmers who are now harvesting their coffee beans. Coffee is Ethiopia's most important export (40%) and there are an estimated 1.2 million coffee farmers.
For several years, USAID has supported the strengthening of agricultural service cooperatives (i.e., coffee, cereals, horticulture, livestock, and oilseeds). Technical assistance is provided by USAID partners Agricultural Cooperative Development International/Volunteers in Overseas Cooperative Assistance (ACDI/VOCA) and the Regional Cooperative Promotion Bureaus. The programs strengthen the management capacity of primary cooperatives and cooperative unions, help farmers improve their productivity and trade competitiveness, support market development, and promote business partnerships between cooperatives, agro processors, larger-scale agricultural producers, and traders. This has resulted in tens of thousands of small holder farmers and pastoralists improving their access to modern production inputs and domestic and international markets for their products.
The availability of and access to credit is a critical constraint faced by smallholder farmers and farmer-owned business cooperatives. Since 2000, USAID and the Bank of Abyssinia have collaborated to provide marketing credit to cereals cooperatives. This loan guarantee program has been highly successful with 100 percent repayment of loans and five cooperative unions participating. USAID and the Bank of Abyssinia are broadening the existing program to provide credit to coffee cooperatives.
The U.S. Agency for International Development has provided economic and humanitarian assistance worldwide for more than 40 years.
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