Credit Guarantee Scheme for Smallholder Coffee Producers

This case study describes a USD 2.25 million credit guarantee scheme (CGS) established by the Common Fund for Commodities (CFC) and the Rabobank Foundation to increase commercial loan access for smallholder coffee farmers and cooperatives in Ethiopia.

• The Common Fund for Commodities (CFC) and the Rabobank Foundation created a USD 2.25 million mechanism to provide loans for coffee farmers in Ethiopia to purchase processing equipment, with the scheme guaranteeing 50% of losses incurred. This mechanism has enabled more than 23 cooperatives in Ethiopia to receive commercial loans, improving access to markets, agricultural best practices, and production and processing information.
• The financial structure of the project involvedL involved the CFC providing USD 2 million as collateral for a risk-sharing solution and USD 1,240,210 in grants, with USD 600,000 of those grants financed by OFID. The Rabo Rural Fund acted as the fund manager, responsible for screening portfolios, extending guarantees, and verifying risk claims during defaults.
• Technical assistance was provided by CABI and Rabobank International Advisory Services to support capacity building, pipeline development, and project preparation for beneficiaries. These providers also assisted lending officers in understanding the business value chain and governance best practices.
• The document identifies several requirements for successful credit guarantee schemes, including a strong legal and regulatory framework where the CGS is an independent legal entity with effective oversight. Additionally, countries must have significant pools of investable project pipelines in SMEs and agriculture, and borrowers must be screened for their ability to sustain themselves after guarantees end.

APA

Climate Policy Initiative (2021). Credit Guarantee Scheme for Smallholder Coffee Producers. https://www.climatepolicyinitiative.org/gca-africa-adaptation-finance/case_studies/credit-guarantee-scheme-for-smallholder-coffee-producers-2/

Chicago

Climate Policy Initiative. Credit Guarantee Scheme for Smallholder Coffee Producers. 2021. https://www.climatepolicyinitiative.org/gca-africa-adaptation-finance/case_studies/credit-guarantee-scheme-for-smallholder-coffee-producers-2/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Credit Guarantee Scheme for Smallholder Coffee Producers |date=16 September 2021 |url=https://www.climatepolicyinitiative.org/gca-africa-adaptation-finance/case_studies/credit-guarantee-scheme-for-smallholder-coffee-producers-2/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2021credit, author = {{Climate Policy Initiative}}, title = {{Credit Guarantee Scheme for Smallholder Coffee Producers}}, institution = {Climate Policy Initiative}, year = {2021}, month = sep, url = {https://www.climatepolicyinitiative.org/gca-africa-adaptation-finance/case_studies/credit-guarantee-scheme-for-smallholder-coffee-producers-2/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }