Royal Quinoa (Quinua Real)

A great opportunity for Bolivian producers

Bolivia-SudaméricaNoviembre 2010

Uyuni Salt Lake (Salar de Uyuni)Uyuni Salt Lake (Salar de Uyuni)45.000 ha cultivated - 26.000 mt of food45.000 ha cultivated - 26.000 mt of foodAnnual export of $us 10 MMAnnual export of $us 10 MMAverage family-based farming between 2 and 8 haAverage family-based farming between 2 and 8 ha

Uyuni Salt Lake (Salar de Uyuni)Uyuni Salt Lake (Salar de Uyuni)45.000 ha cultivated - 26.000 mt of food45.000 ha cultivated - 26.000 mt of foodAnnual export of $us 10 MMAnnual export of $us 10 MMAverage family-based farming between 2 and 8 haAverage family-based farming between 2 and 8 ha

15.000 peasants: self-consumption and commercial 15.000 peasants: self-consumption and commercial cropscrops60.000 persons taking care of the crops60.000 persons taking care of the crops

INCLUSIVE BUSINESS FINANCING IN THE CHAIN OF QUINOA

Disbursements: US$ 501,500

Portfolio: US$ 205,000

Default: 0%

Administrative

Efficiency: 6.1%

Self-sufficiency: 128%

The initiative presented to the European Microfinance Award on Value Chain Finance

Facilitate the production of organic quinoa promoting fairer trade relations between peasant producers and processors

OBJECTIVE: BENEFICIARIES:

271 peasant producers

CLIENTS:

4 primary processors

RESULTS, 2 years of operation:

How do we How do we generate generate sustainable sustainable benefices for all benefices for all involved actors?involved actors?

How do we How do we generate added generate added value for primary value for primary producers?producers?

Inclusive business Inclusive business

KnowledgeKnowledge

Fair rulesFair rules

Model and productModel and product

Results for Results for peasant producerspeasant producers

• Income:Income: 94,6% 94,6%

• Utilities:Utilities: 101,7% 101,7%

• Sales:Sales: 86,7%86,7%

• Net assets:Net assets: 13,3% 13,3%

• Employment:Employment: 11,67%11,67%

How can we assure lasting links?How can we assure lasting links?

PRODUCER

GATHERING AND TRANSFORMATION COMPANIES

CERTIFICATION COMPANIES

PRODUCERS ASSOCIATION Community

Municipality

Goods and services provider

Productive Productive

chain focus chain focus

Building social Building social

stockstock

Financing Financing

productproduct

Financing Financing

modelmodel

FinancialFinancial productproduct: : DiscountDiscount RRateate

QUINOA TRANSFORMER

• Oriented to workingOriented to working capital and capital and conditioned to cash paymentsconditioned to cash payments

• Finance applying a discount rate (4% to 8% flat) with mortgage Finance applying a discount rate (4% to 8% flat) with mortgage

guarantee.guarantee.

• Diagnosis and improvement plan for the producer and the buyer Diagnosis and improvement plan for the producer and the buyer

focusing on organic production.focusing on organic production.

• Single payment at the end of the credit. Deadlines according to Single payment at the end of the credit. Deadlines according to

business cycle - 3 months to 1 yearbusiness cycle - 3 months to 1 year

• Amounts from US$ 30,000 to US$ 90,000 Amounts from US$ 30,000 to US$ 90,000

ASSOCIATED PRODUCERS

Intervention ModelIntervention Model

Commercial articulation diagnosis

Commercial articulation diagnosis

AgreementAgreement Credit contractCredit contract

Buying and selling agreement

Buying and selling agreement

Enterprise payment to the

producers

Enterprise payment to the

producers

AmortizationAmortizationBalance payment to the producersBalance payment to the producers

Monitor resultsMonitor results

Gathering and primary

transformation

Producers Association

IDEPROIDEPRO

Organic Certification

Agency

Organic Certification

Agency

BDS

FS

11

33 44

55

77

8899

Business PlanBusiness Plan

22

Product DeliveryProduct Delivery

66

1010

• Cash payment and competitive prices• Long-term relationships with transformers•Technical services towards organic production• Organic certification• Better income

• Increase in supplier bases• Operating capital• Technical assistance services

• Consolidation of intervention strategies• Promotion of impact results • Reduction on transaction costs (increasing demand) and financial recovery

Results - BenefitsResults - Benefits

How can we mitigate the How can we mitigate the risks?risks?

Integral focusIntegral focus

Conditions of the financial productConditions of the financial product

Better information and more Better information and more

investmentinvestment

TYPE OF SERVICE 2006 2007 2008 2009 sep-10

QUINOA 0% 0% 0% 0% 0%

PRO-Chains 0,06% 0,57% 0,67% 1,38% 0,97%

PRO-Micro 2,85% 3,28% 3,28% 1,32% 0,93%

Dic-06 Dic-07 Dic-08 Dic-09 Agosto -10

IDEPRO 2.40% 2.76% 2.30% 1.34% 1.11%

FINRURAL 4.93% 3.25% 2.38% 1.68% 2.04%

ASOFIN 2.11% 1.07% 0.92% 1.03% 1.21%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

En p

orc

en

taje

s

Nivel de Mora

Default at IDEPRO and the IndustryDefault at IDEPRO and the Industry

How do we scale-up results?How do we scale-up results?

Six value chain financing Six value chain financing on operationon operation

Brasil nut Certified timber Textile confections

Grapes, wines and singanis

Camelid fiber, meat and leather

Tourism

Value chains and selected Value chains and selected regionsregions

Brasil nut

Timber

Textile confections

Camelids and Quinoa

Grape, wines and Singanis (dry colorless

alcoholic beverage destilled from fermented

grape)Tourism (National)

Evolution of the Institutional Evolution of the Institutional Portfolio 2006 – 2010 (US$)Portfolio 2006 – 2010 (US$)

Disbursements, Portfolio and Clients Disbursements, Portfolio and Clients on Productive Chainson Productive Chains

CHAIN 2007 sep-10 TOTAL

DISBURSEMENTS 773,792 3,214.152 9,552.883

PORTFOLIO 871,473 5,622.629 5,622.629

Textiles and confections 63,905 272,053 272,053

Tourism 23,506 320,965 320,965

Timber 68,801 1,064.890 1,064.890

Quinoa and camelids 208,854 1,595.933 1,595.933

Grape, wines and singanis 125,759 1,268.205 1,268.205

Brazil nut 380,648 1,100.584 1,100.584

CLIENTS 170 391 1,116

Lessons LearnedLessons Learned

L1.Explanation of focuses

through institutional documents

L2. Sub sectorial specialization

articulates other focuses

L3. Long-term funds

L4. Information and knowledge

Lessons LearnedLessons Learned

Lessons LearnedLessons Learned

L4. Business services are

essential for the product value

L5. Innovation

L6. Influence on public policies

L7. Accountability

THANK YOU

• rcasanovas@idepro.org

• BRASIL NUT jcaba@idepro.org• MADERA ivargas@idepro.org

• GRAPES, WINES AND SINGANIS vavila@idepro.org• TEXTILE CONFECTIONS eguerrero@idepro.org

• QUINOA AND CAMELIDS jsoto@idepro.org• TOURISM acatacora@idepro.org

• www.idepro.org

PHOTOGRAPHS CREDITS: Alain Messilli. Thomas Cristofoletti. Tony Suarez. IDEPRO