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Other Subjects SNV PUM. Other subjects SNV PUM Bank Loans and Funding A big leap.

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Presentation on theme: "Other Subjects SNV PUM. Other subjects SNV PUM Bank Loans and Funding A big leap."— Presentation transcript:

1 Other Subjects SNV PUM

2 Other subjects SNV PUM Bank Loans and Funding A big leap

3 Bank Loans and Funding I have received many complaints about basically the fact that Banks are not interested to lent money to agricultural projects. And if Banks would be interested, that interest rates are sky-high I cannot comment on interest rates but want to ask the following question

4 Bank Loans and Funding Would you lent money to: A company with outdated, not modern, equipment That cannot really produce for export Has a too low capacity No equal quality raw materials nor equal quality end-products No certificates So: has to produce for a (stagnant) local market No long term contracts with farmers nor with customers, no business-plan Possibly a one time export order, but no guarantee for repeat orders And above all: an owner that also has other, completely unrelated businesses and therefore cannot really devote his full attention to the project for which he wants to borrow money?

5 Anybody answering with: yes?

6 Bank Loan, Funding, Leasing Funding may imply you are not fully owner But it also implies support for the project from the funding co-owner Bank Loan: high interest rates Fund: part of the equity for the funder, but also lower investment by the initiators and therefore possibly easier to materialize. Leasing: equipment can be used but not be owned until it is fully paid.

7 Funding During my study I stumbled across a possibly interesting fund from NAADS called CF A call once a year Requiring proper business-plans, which may not be easy to write and guarantee But looks like an interesting opportunity 50/50 equity Your 50% also can be e.g. land, building, management and does not have to be cash It makes sense to shop around and not just consider this opportunity

8 Micro-leasing Another option might become micro-leasing Processor wants to buy a machine The machine is paid by a financing company And paid back by the entrepreneur from the revenues of product sales System works in Kenya, for Uganda discussed by Swiss Contact

9 The big leap forward If small companies cannot get funds or loans, then what is a solution? Join forces Dont build many drying plants in one area Combine resources Build one together Make a good business-plan Hire a professional manager or: Let one of the owners pay full attention to the project Find the proper support, financially, managerial and organizational, re. plant lay-out and routing, equipment, quality aspects etc. On any aspect required.

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