How investing in Mexican coffee farming communities can create mutual benefit
Discover in this article how helping them finance their farming activities via EthicHub becomes an investment opportunity.
The “black juice” from Mexico is a product known and consumed by many coffee lovers worldwide. However, many people don’t really know a lot about how the coffee ends up in their cups, nor anything about the hard-working farmers who cultivate and deliver a high-quality product. Especially for the smaller coffee farming communities in Mexico the daily fight for a subsistence at a minimum level is a challenging act.
Let's look at the example of Vilma and Ismais, 2 members of a local farming community in the state of Chiapas-Mexico. This small family knows too well the problems of being caught in a circle of poverty: They can’t access enough financial resources to make the most out of their land. They only manage to get money in the form of abusive cash loans, often with annual interest rates of up to 120%. They mainly use their profits from harvesting to pay off this debt, and — as the icing on the poverty-loop-cake — often selling the coffee for a cheap price to the same loan sharks who previously lent the money to them.
What about getting financing from banks? Well, the problem is that in many of these remote villages there are no banks or banks aren't interested in handing out loans to these small farmers. They think there is simply not enough money to make off them, it is a time intensive process to assess and choose the trustworthy communities, that often do not have any credit history. This exactly is where blockchain technology combined with a social impact approach opens up a huge potential for a more sustainable form of economy — one where all sides benefit from each other.
EthicHub is solving this problem and filling the gap with its High Impact Loans Marketplace, that connects groups of small and profitable farmers with global investors and direct buyers.
Its technology is based on the aforementioned blockchain, that through Smart Contracts allows a network without intermediaries and therefore serves all of the participating parties — a better quality of life, new investment opportunities for lenders in low interest markets and fair prices for the product. In other words, EthicHub creates value through mutual benefit: Investors lend money with favorable rates to farmers and buyers commit to buy their crops at fair prices. Last but not least, the use of blockchain allows the farmers to build up a publicly available credit history. The farmers achieve better profits to pay back the loans without difficulty, ensuring the good use of money to break the cycle of poverty and low productivity. With our local nodes we further help those farmers actively in improving their agricultural activities.
Currently EthicHub is in its Alpha phase and the minimum viable product (MVP) of the lending platform has already provided loans to a total of over 60 coffee farmers from 3 farming communities in the state of Chiapas/Mexico. The repayment rate has been 100% percent so far and due to our personal involvement and previous experience during 3 decades with these farming communities we can keep it at a minimum level in the long run. This “humanized” approach is the difference that EthicHub builds on compared to conventional micro loan platforms, who haven’t got any real relationship with the community of borrowers.
The next phase of the project has already begun, as we are in the process of preparing EthicHub for scalability and global expansion through a couple of acceleration programs. In Mexico alone, we encounter a total of more than 180 000 small farmers that could form part of the borrowers community. And this is just for coffee, there is a massive potential for other agricultural products on a global scale. More details on this will be provided in our upcoming articles on our blog.
For now we invite you to read more about the project on our homepage and we’d also highly appreciate you to check out our P2P lending platform, currently in Alpha version. There you will find the loans available supporting the different coffee farming communities for various farming activities. The usual annual interest rate varies between 10% and 15% and is based on the local currency. Investing in loans can be done via credit card or using the Ethereum crypto currency.
For direct investor relations please contact us on firstname.lastname@example.org
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