Credit for Coffee Producers Growing in El Salvador

The rise of grain prices internationally is an incentive for investment in the sector.

Thursday, June 30, 2011

In just four months, financing in the country’s coffee sector has grown by over 150% compared to the same period in 2010.

One of the main reasons seems to be the excellent performance of the grain abroad. Due to high prices and the high demand in the market, producers are being seen as more credit worthy.

In the aforementioned period, from January to April 2011, credit for activities related to the sector exceeded $20 billion, $7.8 million more than in the same period in 2010.

According to an article in Ricardo Mora, president of the Multisectoral Investment Bank (BMI in Spanish), said that newly released lines of credit, such as those supporting coffee exports, have enabled new credit opportunities to open up for the sector. "Credit to the sector has doubled," he said, referring to figures from the Superintendency.

The same acceptance is being shown in credits from state banks. According to the SSF, between January and April, Banco Hipotecario granted $7.6 million in loans, making it the financial institution that has provided the most funding to the sector in that time period. Banco de Fomento Agropecuario (BFA) is the second creditor, having granted $4.5 million up to April."

More on this topic

Salvadoran Coffee Sector Loans Up 30%

February 2012

Improved grain prices encouraged banks to increase their loan portfolio for coffee production to about $56 million.

The bank approved $56 million for coffee planting in El Salvador between January and November 2011, 29.8% more than the same period in 2010 ($43.24 million), revealed the Superintendency of the Financial System (SSF).

Guatemala: Coffee Growers Get Credit

July 2011

The Trust for financial support for the coffee sector has made $38 million available for financing the sector.

The coffee price crisis of 2002, which affected small producers, was the reason for the creation of the trust, which has since provided funds to farmers for different situations that the industry has faced.

Growing Demand for Credit for Coffee and Corn

July 2011

Better prospects for coffee and maize production compared to 2010, are generating a sustained demand for credit in El Salvador for these sectors.

According to information from Banco de Fomento Agropecuario (BFA) from January 2011 until July 13, 201 loans were granted to the coffee sector, totaling $11.03 million, of which 60% was allocated to maintenance .

El Salvador Activates Credit Line for Coffee Growers

February 2011

The Multi-sector Investment Bank announced the allocation of $ 50 million to finance the coffee sector.

The funding will be made through the BMI Hotline for Avio Café Financing: 2011-2012.

This funding is intended to continue contributing to the revival of the coffee sector and generate benefits for El Salvador, including employment in rural areas and a positive impact on the environment.