Rural Farmers’ Cooperative Makes Micro-Finance Work Mali’s Sikasso region is known for producing high-quality potatoes, but local farmers did not have the resources to reach their trade potential. In January 2005, the principal trading villages in Sikasso joined to form six cooperatives, and together the cooperatives formed the Union Regionale des Commerçants et Exportateurs de Pomme de Terre de Sikasso (URCEP), intending to maximize the potato farmers’ efficiency and provide their members with a variety of benefits, including unprecedented access to micro-finance.
URCEP’s Administrative Secretary, added, “Normally loans are for 12 months at two percent per month (24 percent for the year). However, with the help of GREFA during loan negotiations, we were able to agree on a rate of one percent per month for an eight-month period (only eight percent for the period).
A potato farmers’
cooperative in Mali
With micro-finance loans from a rural bank to members of URCEP, the farmers’ potato production soared. However, when URCEP members applied for a new loan for the following year’s crop, the bank firmly declined, because too many members had defaulted on repaying their loans.
overcomes major problems caused
by some members’ delinquent loans.
The cooperative approached the Groupe de Recherche d’Etude et de Formation en Agriculture et Arboriculture (GREFA) for help. GREFA advised the cooperative’s leaders to resubmit their loan application to cover only the members who had repaid their previous loans in full. URCEP also demonstrated to the bank that the cooperative was making its own attempt to collect payments from the delinquent members, by imposing a small surcharge per kilo of potatoes during transport. GREFA and URCEP were able to secure new loans at even more favorable rates. “The negotiations for the new loans included an agreement by us to pay the past-due 8 million CFA from the 2005/2006 harvest for all union members,” said Yaya Traoré, URCEP’s president. Siaka Collibably,
“We know that as a result of the loans and the fertilizer we were able to purchase, everyone had a bountiful harvest and yet they did not pay fully. We are all living in similar situations, yet I and others were able to pay,” Collibably added. “Everyone needs to see that if you do not make payments you will not be eligible for another loan,” Traoré asserted. “In reality, if we don’t enforce sanctions, it could be the end of the cooperative. Now that they’ve seen the consequences of their actions, they have learned that they must respect how things are done.”
URCEP members continue to be optimistic about the advantages of potato producers coming together. The successful negotiations give new strength to their cooperative, and result in greater profit going to creditworthy potato producers.