Cameroon is a country that values education but, unlike in the U.S. and many other parts of the world, Cameroonian families have to pay for their children to attend school. School fees, along with Christmas expenses and a mandatory yearly Tribute to the Chief, make the final months of the year a financial challenge for many families in the country, particularly because coffee from the harvest isn’t sold until January and February.
In order to pay end-of-year expenses, farmers must take out loans from buyers on their coffee crops. Unfortunately, most buyers exploit this need, charging exorbitant interest rates around 200%. This means that farmers forfeit a substantial portion of their crops to interest, making it impossible to save up money for expenses at the end of the next year. The result is a vicious cycle.
Breaking the cycle requires a new buyer who can make loans without predatory practices. This is what Mocha Joe’s began doing in Cameroon as part of our Direct Trade relationship. Mocha Joe’s offers loans on up to 50% of growers’ harvests from September through February with no interest. This is a win-win situation for the farmers and Mocha Joe’s: Farmers get paid fairly for their coffee, and Mocha Joe’s gains a massive competitive edge over other buyers. If we didn’t offer this loan program, farmers would be forced to sell to other buyers in order to get money when they need it.
We are currently working with a credit union in Cameroon to make loans available to farmers year-round at a 1.5% interest rate. Mocha Joe’s plans to pay the entrance fee for farmers interested in joining. Our upcoming Indiegogo crowd funding initiative will seek to raise funds for the accounts.