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Financing a Coffee Cooperative’s Growth in Peru

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Cooperativa Agraria Cafetalera (C.A.C.) "La Prosperidad" de Chirinos is a coffee cooperative tucked away in the slopes of the tropical Andes in northern Peru. A registered Fair Trade organization, Chirinos warehouses, processes, and markets certified-organic coffee to the U.S. and Europe.  Until 1999, the cooperative sold its coffee to local buyers; now, because of Fair Trade and organic market access, it exports to specialty coffee companies.

Q&A: Elena Sanz, Accountant

Elena Sanz is the cooperative’s accountant, and quite literally, she lives, eats, and breathes Chirinos. She lives in a small room inside the cooperative, she works at least ten hours every day, and she seems to know each cooperative employee, each cooperative member, and each cooperative member's family. And she is never without a smile on her face. It is because of people like Elena that Chirinos has grown and prospered. According to Elena, Root Capital has also played a role in Chirinos' success. By 2008, Chirinos’ sales had tripled since the cooperative received its first loan from Root Capital five years earlier. Elena explains below why it is that without Root Capital—the cooperative’s only source of financing—Chirinos would not be what it is today.

Q: When did you start working with Chirinos?

A: In 2005, when I was still at University, I did an internship with Chirinos. Then, I graduated in 2006 and was hired as an assistant. I’ve been the accountant now for one year.

Q: Why did you want to work with the cooperative?

A: Partially, it’s because of the coffee process. I didn’t grow up near coffee production, so I’ve learned so much in the time I’ve been with Chirinos. After a long process you end up with a successful product of good quality, and it’s a tremendous effort. That has been great to learn. And every day I’m learning more. But it’s not just learning about coffee, it’s also getting to know the producers. Chirinos has more than 300 members, and it’s important to meet every one.

Q: What are your thoughts on Root Capital?

A: Root Capital is incredibly important to the growth of our organization. The Peruvian bank doesn’t care much about coffee organizations because of problems they’ve had in the past. But Root Capital is different---they are really interested in wanting to support us. We have grown with Root Capital.

Q: How does credit from Root Capital affect the cooperative members’ lives?

A: When producers get paid at the time of harvest, it gives them the money they need and allows them to invest in other things, like education for their children. So it’s not just improving their coffee farms. It’s raising their level of education and their standard of living. The cooperative can also give producers other services—small microcredits, technical assistance. So when the organization grows and strengthens, the farmers also grow and strengthen.

Q: What are your hopes for the future of Chirinos?

A: I think the organization’s biggest goal is to give the cooperative members a strong sense of identity that becomes an intrinsic part of who they are, so that they stay on their land and learn and grow. It’s a lot of work and we still have a lot to do, but we’re on our way.

Q: Without Root Capital, how would this be different?

A: Other types of financing in Peru ask you for many things. They ask you for a lot of collateral, and there are organizations that don’t have the collateral. It’s a chain--if we didn’t have the credit, we obviously couldn’t buy coffee from the cooperative members, and they wouldn’t be able to pay their workers, and finally their workers wouldn’t stay on the farm and keep working. So if we didn’t have financing we wouldn’t be able to fulfill our contracts, and as a business we would lose all credibility. We simply wouldn’t exist.