Carmen Gabriela Luquin Rubio
Diego Enrique Morales Rodriguez
Edu Brasil López San Vicente
EGADE Business School Tecnologico de Monterrey
Ezequiel Reficco
Keep this story going! Share below!
Access to financing is a key factor in determining the success of small farmer organizations: without credit few organizations manage to collect, transform and commercialize the production of their members.
Small-scale producers do not know the characteristics of quality, delivery or presentation that buyers require. NGOs that develop community projects do not necessarily have that information or mechanisms to achieve it. And finally, the buyers do not know where the groups of small-scale producers or NGOs are with whom they could collaborate. It is not just about having information about sale or purchase price, but about how to make successful commercial interactions happen.
Identifying areas of opportunity and developing long-term solutions requires breaking from traditional models, perceptions and processes of the sector and developing a multi-stakeholder strategy with the participation of the financial, business, philanthropic and government sectors.
Thus, as of September 2017, they decided to join forces with Nuup and El Buen Socio - both Mexican social organizations - to strengthen the organizations of small Mexican producers and break some of the barriers to accessing financing.
The agricultural sector can be an effective and scalable engine for improving the living conditions of these millions of Mexicans, as well as being potentially more effective in reducing poverty. However, most small Mexican farmers lack high yields and sell their products at low prices due to lack of direct access to the market.
By organizing themselves into cooperatives and associations that bring together hundreds of farmers, some small producers have managed to improve their commercial conditions by integrating into modern value chains and establishing direct links with large national and international buyers. However, many of these organizations in Mexico fall into the "financial vacuum" because they are too large for microfinace and too small and risky for traditional financial institutions.
The project has two objectives: Objective 1. Facilitate contact between producer organizations and potential funders through the creation of a credit pre-qualification tool. Objective 2. Train small producers in basic financial and business issues to prepare them to be credit subjects. The technical contribution of the Real Credit team has been essential for the success of this project. Since in addition to the donation they have been supported in • The technological development of the online questionnaire. • Accompaniment throughout the project, with field visits.
As a fundamental part of its sustainability model, they have built more than 80 links with distributors over the years, both in Mexico and the United States and some Latin American countries. This is how they have been able to access the medium and low economic segments of the population.
The achievement of objectives is possible thanks to the permanent effort in communication and training with our business partners. For its part, the personalized treatment of its investors has facilitated communication and allowed a better flow of information. Thus, the In Companies program allows them to offer conferences of interest to our shareholders.
The problem of access to financing for organizations of small producers is not new but has not been eradicated. Many research, studies and publications have analyzed the issue in detail in Mexico and globally.
The barriers in both supply and demand of financing can be summarized in the following eight challenges:
Barriers in the demand for financing
Get stories of positive business innovations from around the world delivered right to your inbox.
Luis Arturo Magallanes Mantecón, Financial inclusion of small agricultural producers: technology and financial education to promote access to financing
This Mexican company with more than 25 years of experience in offering innovative financial solutions to the segments that are usually neglected by the traditional banking system.
Our priority is to help raise the quality of life of our customers through a differentiated, ethical and integral service. Crédito Real was rated as one of the 3 most sustainable companies that conquer the Mexican Stock Exchange (BMV): The sustainable companies that have been recognized in the Price Index and Sustainable Quotes of the BMV, thanks to its practices of social responsibility and the environment. Investors no longer only think about the performance of a company's stock.
The commitment of Mexican companies with their corporate governance, social responsibility and the environment are elements that also determine the attractiveness of a firm.