

The goal of this campaign is to provide early financing to a Cooperative that brings together 3.200 families that produce certified, organic, specialty coffee in the Northern Highlands of Peru at 1,000+ meters above sea level.
These families (93% of which are smallholder farmers, holding a land of less than 5 hectares) are aggregated into a social purpose entity – a Cooperative – whose goal is to provide the farmers with Environmental, Social and Governance (ESG) services in order to improve their productivity and respond to their social needs. These services include training, health, family, and wellbeing support, as well as help with fair-trade and organic certifications.
The growth of organic coffee production in these regions has boomed over the last 20 years, spearheading Peru as a major producer of organic coffee (at about 90,000 ha of certified organic land, Peru is the world’s second-largest exporter of organic coffee), a business that generates 1.5 million jobs involving approximately 223,000 families.
Such phenomenal growth of organic products emerged from unintended circumstances – given the fact that products contained low levels of chemical fertilizers and pesticides due to their unaffordability – customers saw these products with enhanced interest.

To accommodate the increasing demand and due to the farmers’ inefficient production methods - a consequence of their lack of capital - the growth in these regions has been mainly achieved from opening up new areas to commercial agriculture causing Amazonian deforestation – making such growth unsustainable and with a high environmental cost.
The funds raised through this campaign will be used as Transactional Working Capital to provide liquidity to the Cooperative. Transactional Working Capital is a short-term debt financing asset that allows the producer/aggregator/seller to receive early payments and the buyers to delay their payments.
In commercial sales, standard market practice for payments is between 30 to 90 days from the time when the seller issues its invoice – such payment terms usually strain the cash availability of the seller, while allowing the buyer to hold on to their cash for longer. Often times, the seller’s working capital gap is resolved by accessing traditional bank financing, which usually requires to be over-collateralized over hard assets (i.e. factories, buildings, machineries). However, due to the elevated requirements demanded by banks as guarantees for the loans, impossible to meet for smallholders, such bank loans seldom resolve any working capital gap.
Transactional Working Capital fills this gap without the need for collateral. That, in turns, obtains the following results for both the smallholders and the aggregator:
WCA maintains a Trade Credit Insurance Policy with a global insurance company providing worldwide trade credit insurance, surety, and collections services, with a strategic presence in 50 countries. The Project repayment will be guaranteed under such Trade Credit Insurance Policy, which effectively protects GoParity lenders from default in a credit related (e.g. insolvency, bankruptcy). The policy covers against losses from Insolvency, Protracted Default and Political Risk and covers up to 90% of the value of the underlying commercial transaction financed by WCA. As the latter provides up to 85% financing to any underlying commercial transaction, the policy in essence covers more than WCA’s entire financing.
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