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The Rabobank approach to value chain finance

The Rabobank approach to value chain finance. Global challenges. Global challenges. Three units serving worldwide supply chains. $. Rabobank International. Rabobank Development. Rabobank Foundation. Development Phase. Rabobank target countries. Rabobank main target groups.

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The Rabobank approach to value chain finance

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  1. The Rabobank approach to value chain finance

  2. Global challenges

  3. Global challenges

  4. Three units serving worldwide supply chains $ Rabobank International Rabobank Development Rabobank Foundation Development Phase

  5. Rabobank target countries

  6. Rabobank main target groups No financial opportunities and not recognized by support providers Considerable support both financial and technical by NGOs and Government

  7. Agriculture and Agribusiness Source: Rabo India Finance, A. Datta, 2007 7

  8. How to turn a supply chain into a value chain? 8

  9. Review of the Value Chain Source: Rabo India Finance, A. Datta, 2007 9

  10. Value Chain Finance Framework Source: Terrafina/J. de la Rive Box, 2009 10

  11. Towards more inclusive value chains Source: Terrafina/J. de la Rive Box, 2009

  12. Integrated Agriculture Finance Structure Equipment purchase contract Supplier Insurer Insurance contract Buy-back agreement Transfer of lease payments Rabobank Down payment Lease contract Farmer Processor Long-term raw materials supply contract Source: Rabo India Finance, A. Datta, 2007

  13. Agribusiness risks are complex

  14. New mitigants are required 14

  15. Financial dimensions of a value chain Chain with small farmers and small retailers Chain with small farmers and large institutional processor or retailer Source: Modern Value Chains, K Schwedell 15

  16. Case: Passion fruit from EthiopiaAn outgrower incubator approach based upon foreign investment • Five experienced Dutch entrepreneurs studied the potentials of Ethiopia and decided to invest almost €12 million in a new enterprise to buy, rehabilitate and expand an existing state-owned fruit farm in the Upper Awash region of Ethiopia. It is a new venture that has set targets to become a major producer and exporter of tropical fruit juices, purees and concentrates from select countries in Africa to the large markets of Europe and the Middle East. • An integral part of the project is the active promotion of an Outgrower Scheme, which will result in new producer cooperatives (in total approx. 1300 hectares) to become suppliers to the new processing plant, in effect giving the local farmers efficient access to export markets and much improved access to commercial financing

  17. Ethiopia: Project Location

  18. Ethiopia: Schematic of end objective collateral equity Fruit Community “Trust” Juice products dividends $ Fair Trade premium Social development 18 repayments Export market banks coop union aJ processing loans for growth prod. coop1 prod. coop2 etc opportunity inputs & support Micro finance aJ plantation

  19. Case: Cooperative Banana Farmers in Peru • Banana farmers in Northern Peru organized in a cooperative take up pre-export processing and fair trade certification. Whereas historically they supplied large multinationals, they now do the quality control, washing, packaging and exports by themselves, thus almost doubling farm incomes. • CEPIBO is a Union of Small Producers of Organic Bananas in Northern Peru established in 2007. It represents 1500 small producers of bananas with an average of approximately one hectare each. It is responsible for marketing of organic products (both locally and exports) and it has the organizational and technological capacities that allow them to promote fair trade throughout the commercial chain and diversify the productive system in a sustainable manner.

  20. Cooperative Banana Farmers in Peru

  21. Case: Women milk farmers, India

  22. Rabobank Foundation“ Making a difference “

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