Alexis’s farm is located on the edge of the village where CPF has an office. Very handy for the loan officer to easily visit him. The size of his loan is € 300,- and his monthly income is € 50,-. This is a very difficult situation for him.
It is difficult to grow with this income as a starting point but for sure he has the ambition. He would like to borrow € 1000,- to start a coffee plantation. I hope that our loan with 6% of interest will help him grow so that it enables him to make a good investment with the loan.
Loan since november 2017
In november 2017 Alexis received his loan. With the current loan he will increase his income in order to grow coffee. He would like to invest € 500,- from himself and a loan of € 1000,- from the bank. According to Alexis, his plantation has the size of 3 hectares with 1000 banana trees. He already owns the land to grow coffee, he only needs to buy the coffee trees. He also would like to buy a generator to water the land.
It is a good year for the harvest. The main reason for this is the use of chemical fertilizers that he was able to buy with the loan. Last year the harvest was disappointing. We are very curious how Alexis is doing when we visit him next time. He has great plans and is a very enthusiastic entrepreneur. But we doubt his numbers. With the 3 hectares of land his income is relatively low.
Why do we invest in microcredits in Afrika?
A farmer like Alexis has a monthly income of € 50,-. If he applies for a loan of € 1.000,- , he pays Pure Africa € 60,- per year. When applying for a ‘normal’ loan, it will cost him € 250,- per year with the local bank. This means that he will spend 5 monthly salaries without any reimbursement of the loan. We often hear that 25% of interest goes with the risk in this market. That may be so, but you also know as a fact the farmer stays poor. That is the reason why we test with an interest of 6%. In the last 2 years we have provided 39 loans and not 1 farmer defaulted on the loan. One entrepreneur needed to quit his activities but still paid back his loan.