ABN AMRO, BNP Paribas and Rabobank have established a US$25m revolving facility for Neumann Gruppe, the holding company of Neumann Kaffee Gruppe - a sustainable green coffee service group. The facility supports NKG BLOOM, Neumann Gruppe’s long-term, sustainable-sourcing initiative designed to empower more than 100,000 coffee farmers financially and tackle poverty in coffee communities.
NKG BLOOM provides loans to smallholder farmers and farming groups in 10 countries. In addition to financing, the NKG BLOOM initiative also provides farmers with access to farming inputs, sustainability consulting and education on coffee markets. Together, this enables farmers to secure, manage and diversify their supplier base, adopt sustainability principles, and ensure their farm is economically viable.
The loan facility is uniquely structured in that the partner banks share the direct risks if a farmer defaults through a Risk Sharing Agreement (RSA), which sits alongside two complementary default guarantees by USAID and the Dutch Sustainable Trade Initiative (IDH).
“Ultimately, the Smallholder Livelihoods Facility enables us to bring the power of the global financial markets - long the missing piece - to smallholder coffee farmers," said Catalina Eikenberg, head of Sustainability Business Unit at Neumann Gruppe. "We’ve set ourselves an ambitious goal and we’re excited to make it happen.”
'This loan facility is an example of how a responsible corporate citizen - Neumann Gruppe - and the finance sector can put in place a solution that helps entire communities currently at risk to poverty and financial inclusion," commented Yannick Jung, head of Global Banking EMEA at BNP Paribas. "The positive impact is material: thousands of farmers and their dependents will benefit from more sustainable businesses. In short, great for coffee-dependent communities and another step forward in achieving the UN Sustainable Development Goals by tackling poverty, climate action, and inequalities through partnerships."
“The successful project of NKG Bloom in Uganda in 2017 offers smallholder farmers more perspective and increases the production of sustainable coffee," said ABN AMRO’s Karin Kersten. "We’re proud to be involved in this next step to support NKG Bloom together with Rabobank and BNP Paribas.”
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