Innovative approach will improve access to financing and markets

Innovative approach will improve access to financing and markets

26/10/2016

In the Forum on Access to Financing, the SCOPEInsight methodology was analyzed as a tool for assessing the risk of doing business with small farmer organizations. For funders, the agricultural sector is difficult to assess. Each product has its own peculiarities in terms of supply, production, processing and marketing. On the other hand, commercial banks, microfinance institutions and ethical banks have their own methods to evaluate productive organizations. Coupled to this, there are other obstacles that make lack of access to financing the most critical problem faced by all small-scale agricultural organizations. In its effort to convince agricultural organizations to achieve an active role in the reduction of rural poverty, VECO Mesoamerica is constantly innovating new methodological approaches to solve the problems of these disadvantaged populations. Therefore, VECO International is conducting more than 80 organizational performance evaluations in several countries in Africa, Asia and America through the SCOPEInsight methodology. Between Nicaragua and Honduras, twelve analyses have been performed in the areas of vegetables and fine cocoa. For Fausto Rodríguez, Regional Program Coordinator at VECOMA, this is very important.

"We want to show the methodology to the banks and purchasing companies. We hope they can see if the SCOPEInsight evaluation is a good risk rating for them and if they feel safe financing or buying products from small farmer organizations".

Fausto Rodriguez Regional Program Coordinator at VECOMA
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A global tool with great local impact

The Forum on Financial Strengthening and Access to Financing in Small-Scale Organizations was held in Managua on September 24th. This event was attended by over a hundred people related to financing, production, processing, marketing, exports and provision of development services. Firstly, an interesting agenda permitted to know the key areas that SCOPEInsight analyzes. Then the evaluations of the Cooperative Ríos de Agua Viva (cocoa collection and marketing) and the Cooperative Tomatoya (vegetable production, storage and marketing) were presented. The experiences of the PRUCAM/USAID project in El Salvador were also shown. After that, two panel discussions were held, one on the application of the methodology in the aforementioned cases, and the other on the analysis of SCOPEInsight. In the latter, experts in ethical banking, trade, exports, microcredit and business development service providers participated. For Lisbeth Rodriguez of the Tomatoya Cooperative, the application of the tool was very successful: "Since it has support at the international level, SCOPEInsight gives us greater reliability vis-à-vis banking institutions, which is very important because most of the farmers rent land and do not have resources for production."

"Since it has support at the international level, SCOPEInsight gives us greater reliability vis-à-vis banking institutions, which is very important because most of the farmers rent land and do not have resources for production."

Lisbeth Rodriguez of the Tomatoya Cooperative
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In addition to productive organizations, NGOs that execute projects will also improve the design and monitoring of their projects because the tool generates a list of improvement activities and identifies areas with greater weaknesses. When an annual evaluation is carried out, the values of each rating can be compared and advances or setbacks can be monitored, not only at a general level, but for each of the nine key areas: internal management, financial management (and performance), operations, flow of supplies, markets, relations with facilitators (State and non-governmental organizations), sustainability, and external risks.

A connection between productive organizations and the business sector

On December 8-9, 2016, a global meeting will be held in Brussels, Belgium, with the participation of international leaders in the financial and commercial spheres. The experiences of VECO Mesoamerica in Honduras and Nicaragua will be used for the discussion on the improvement of SCOPEInsight and, at the same time, will allow to identify international financial service and business development providers interested in the organizations of this region. As explained by Rodriguez: *"Scope Insight is part of the AMEA global platform, where participating organizations will have a profile available on the Internet. This way, private international companies (engaged in trade and financing) could be interested in providing funding or technical services to the evaluated organizations." *