In a bid to boost the capacity of Ethiopian coffee farmers the local NIB International Bank is setting up a 10 million dollar guarantee facility with the assistance of The International Financial Corporation (IFC), the private sector lending arm of the World Bank.
The guarantee facility, which is expected to support the Ethiopian Coffee Initiative, will be run by TechnoServe (TNS), a business solutions organization funded by the Gates Foundation.
TNS has been tasked to work with coffee farmer cooperatives to touch up their business management skills by providing them with adequate training to improve the quality of their coffee production.
The Ethiopian Incentive targets up to 160 cooperatives which represent some 90,000 local farmers.
Apart from assisting farmers to acquire wet mills for processing “cherry” coffee, the credit facility will also help them to acquire new wet coffee beans processing machines in order to raise the current 1.0 ton washing capacity per hour to 2.4 tons per hour.
In addition, the program is expected to help farmers meet their working capital needs and facilitate their access to credit for wet mills (washing mills).
According to the IFC, the guarantee facility will enable NIB bank to provide a 12.5 million dollar credit within the 2010 coffee season.
The program will be extended to 2013, enabling farmers to acquire 25 to 30 million dollars, according IFC.