Harbu Micro
Finance
Institution S.co
Value chain financing
European microfinance week
2010
Luxembourg
MAIN CHAIN SUPPORTERS
Harbu Micro Finance Institution: Established in 2005 and is affiliated to
Facilitator for Change (NGO). Harbu MFI aims at boosting agricultural
productivity and agricultural marketing by supporting value chain
development and access to financial services. Harbu currently operates in 13
Branches Having 19,600 clients operationally sustainable with OSS by 127%
and the PAR to the level of <1%
Facilitator for Change (FC): a national NGO established in 1998 that works with
disadvantaged communities overcome their poverty. It focuses on enabling them to
improve their livelihoods using their own resources, skills and experiences, with minimum
external support.
FC currently has eight projects in Oromia and Amhara states in Ethiopia. It is heavily
involved in value chain promotion, especially on soybeans. So far it has organized about
5,000 farmers into 64 farmer marketing organizations. It promotes soybean value chain
in Jimma zone.
DEVELOPMENT AND IMPLEMENTATION PHASES



Started in 2006 by FC and Jimma Agricultural
Research Centre
Started with smallholder farmers with the
aim to boost production and productivity and
thereby ensure the food security of farmers.
However, after observing an ample
opportunity and understanding that, beyond
the local consumption, soybean can further
be processed into soymilk
FUNCTIONS AND CHAIN ACTORS
Main functions
Main actors
Consuming
CHAIN SUPPORTERS
AND ENABLERS
/PROMOTER
JU Students &Dwellers
Retailing
Processing
&wholesaling
Collection
&
storage
Productio
Tsehay
Aabeb
e
Kera CLA
5 FMOs
Producers
Retailers
Women CLAs
FC, & Harbu
FMOs
Smallholder
farmers
FC, Gov. , Coop.
& Harbu
FC, Gov, Research and
Harbu
1. SMALLHOLDER FARMERS
Illiterate and large family size (Mostly more
than ten) which exacerbated the level of
poverty and misery.
 On average, farmers in the area



Annual earning about 450 USD
Earning per family member per day, 0.125 USD.
FMOS ROLL & CONDITIONS THEY WERE


They play a role of collection from their
members
Primary cleaning, packing and make it ready for sale.
FARMERS BEFORE ORGANIZATION



The farmers have been exploited by a long market chain
which did not add any value to the product.
Local traders and brokers use to cheat farmers through
distorting weighing scales and manipulating prices
Farmers do not have any control over price.
WHO ARE THE WOMEN
Were very poor
 Used to generate their living from fire
wood collection and selling, charcoal
selling, selling the labor of their children
and engaged in daily wage in construction
and better off families.
 More than 95% of them were illiterate
 Earn a daily income of less than a dollar a
day and live dilapidated houses.

RETAILERS


Includes individual entrepreneurs around Jimma city
The association itself engaged in the wholesaling and
retailing at door step of the factory
CONSUMER
Residence of Jimma town and the surrounding (University
students (who account for 10% of the market)
 Cafeterias, hospitals, and the middle class residents.

A Dutch based organization, Share People, supported FC and Harbu in testing
the product in universities and cafeterias to check people’s preferences and
tastes. The comments and feedback from this market research were encouraging.
In addition to the Share people a BDS named FFARM PLC is also supporting in
providing technical and advisory services to chain actors.
DESCRIPTION OF THE INITIATIVE:
HARBU’S LOAN PRODUCTS ACROSS THE CHAIN ACTORS
Actors
Products
Purpose
Agricultural loan
 Installment loan:
 Term loan/ bullet payment
Purchase of
inputs
Working capital loan
Short term - bullet
payment
Stocking
Semi-processing
• Lease financing
• Working capital
loan
• Processing machine
• Working capital
• Stocking
SITUATIONS ASSISTED US TO SUCCEED
 Inspired
results were the very important
for our success
 The aspiration of the actors and
promoters
 Proven sustainability of the program
through different indicators that has high
returns and bringing changes in the
livelihood of the very poor
VCF INITIATIVE FOR SMALL HOLDER FARMER




Farmers are no longer dependent on a single crop.
Their income raised by more than 20% and improved
the fertility of their soil which as a result reduced the
fertilizer costs.
They are now more able to grow crops for the market,
and they can get loans to increase their productivity
and incomes.
Their ability to organize and promote sustainable
local development has been increased.
THEN WHAT FOR FMOS
They have a reliable buyer for their product
 Raised their profits by over 15% and improved
their ability to serve their members.
 The relation between the women’s association
and the FMOs has improved the reputation of
these farmer groups.

Purchase committee of FMOs
Soybean stock
THE WOMEN TODAY




Those poor women whose income was less than a dollar a
day and now working together in the association have also
benefited much.
Today at minimum they could able to get five bottles of
milk a day (25 birr a day) which increased their income by
five fold. .
Moreover, most of them get employed in the factory and
fetch income, their social status has raised and serving as a
model for other poor women in Jimma town.
Get mental satisfaction as they mentioned during group
discussion with them
HARBU AS PROMOTING ORGANIZATION
 Increased
its portfolio and its clientele
base by 20%.
 Lowered the risk of default by working
with several actors in the chain rather
than with individual players.
 Reduced its transaction costs by at least
20%.
POSITIVE IMPACTS OF THE
INITIATIVE
Improve farmers’ income and farming systems.
 Improved the soil fertility of the land and
reduces the fertilizer cost of farmers.
 Environmentally friendly business enterprise.
 Increase in income means many things – sending
children to school, improve health status, and
overall livelihood improvement of
communities.
 Capacity of FMOs strengthened to promote
sustainable local development
 Market opportunities for producer farmers and
employment opportunity for urban women and
youth created.

HAMPERED SITUATIONS
Lack of initiation and willingness by some
promoters
 Lack of proven/tested references for value
chain developments in Ethiopia for smallholder
producers
 Absence of soft regulation to enforce local
contracts and quality standards
 High electric interruptions and shortage which
might affect the function of the processing
machine.

Thanks!
ENJOY
SOYMILK!