Impact Notes: Microlending

Impact Notes: Microlending

Lauren has been the big driver of “impact” being part of our chocolate company, and a chance encounter is what got us looking more closely at microlending in recent months.

Here’s what happend…

My parents recently visited Peru, and on the flight from Lima to Miami, my mom was seated next to a bank examiner. They got to talking, and this person was a bank examiner with a unique purpose: his job was to evaluate the stability of banks in Latin America who were distributing microloans for a non-profit called Kiva. My mom was familiar with Kiva, and told me to check them out.

The 30,000 foot view is this: Kiva helps people like us make microloans to folks around the world who have entrepreneurial ambitions but don’t have access to financing. Examples include a woman who wants to buy fabric to open a clothing store or someone who wants to buy organic fertilizer to support their family’s plantain crop. And a lot of these folks live in the countries that we buy cacao from: Ecuador, Guatemala, Peru, Colombia, and the Dominican Republic.

Our goal for now is to take a portion of monthly revenue and put it into a revolving microloan fund that is targeting agricultural entrepreneurs in the countries we buy cacao from. And because Kiva lets you search for loans using keywords, we’ve been looking through Kiva’s database to find projects that are specifically related to cacao: either the farming of cacao, fermentation of cacao, or the broader cocoa supply chain.

Kiva claims a 98% payback rate. That sounds high to me, and we will see whether that number holds true or not. But the key point is that a lender can expect a sizable portion of their money back if they have a large and diversified loan portfolio. And the lender (people like us or you) then have the opportunity to re-lend that money once it is paid back. Most loans are setup to be paid back in monthly installments.

We just made our first microloan to test everything out. Caldera Cacao Roasters funded $150 of a $1,300 loan to a young man named Robinson who lives in Ecuador. He wants to buy organic fertilizer to use on his family’s cacao trees and plaintain crop. You can check out his project here and help fund his loan if you feel inspired to do so.

Now don’t mistake it: we know that $150 ain't much in the grand scheme of things. But by starting small and contributing each month, our goal is to build a revolving loan portfolio that meaningfully supports folks like Robinson who have entrepreneurial ambition but may not have access to the capital needed to get their projects off the ground. And in that way, a little chocolate company in Bozeman can help create a more equitable world where folks have the opportunity to pursue their ambitions - whatever that word means to them.

As with all the endeavors surrounding the chocolate factory, we will keep you posted as we proceed! Thanks for reading.

Best,

Logan

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