A sweet deal in southern Colombia

A sweet deal in southern Colombia

CONT-CO-47.jpg24 January 2018

When it comes to committing to a business, there’s no doubting sugar cane farmer Pedro Bastidas. When asked about the development of his enterprise, he casually states: “In 2005, I exchanged my house for a sugar factory.”

Pedro is the owner of the sugar processing plant La Avispa (the wasp) in the southern Colombian town of Sandona. His first job at the plant was as a factory worker. Through hard work, persistence and determination, he steadily climbed the ladder and by 2005 he had become the factory’s owner.
He knew he wanted to expand the business, but at that time achieving any kind of growth was difficult. He simply didn’t have the funds or resources to do so. That was until someone told him about the microfinance institution (MFI) Contactar.

Pedro Bastidas, sugar factory owner and Contactar client

More than just loans

Corporación Nariño Empresa y Futuro (Contactar) has been an Oikocredit partner since 2010. Headquartered in the southern Colombian city of Pasto, Contactar provides short-term loans to micro-enterprise owners looking to develop their businesses. Most of these enterprises operate in rural areas across the south, in the departments of Nariño, Huila, Putumayo and Tolima.

Contactar’s stated values of ‘Solidarity and moral responsibility’ mean that it attaches great importance to its clients’ commitment and willingness to progress, an emphasis reflected by its minimal collateral requirements for clients. The MFI goes beyond simply providing business loans by helping its clients improve their wellbeing. For example, Contactar provides its members with health and safety advice, helps with housing improvements, and even organises regular sports days to promote physical education and healthy nutrition as part of its Healthy habits and lifestyles programme. Contactar views all these aspects as enhancing the quality of people’s lives.

Supervision and expertise

All Contactar clients receive supervision and advice to help grow their businesses. A team of technicians and consultants provide information to help Contactar’s clients use their funds appropriately and effectively. Contactar offers both individual and group loans. Contactar’s group loan methodology encourages ‘Solidarity through mutual aid’.

Upgrading the plant

Pedro joined Contactar in 2007 and obtained a first loan of one million Colombian pesos (€ 280), which he put towards the purchase of an electrical generator ̶ essential to the factory’s output. Subsequent loans have seen his factory transformed and modernised and enabled him to increase production and generate more income. The processing plant continues to grow, and Pedro now employs 45 people.

His loans have also helped him improve his sugar plantation. A recent loan of four million pesos was spent on sugar cane cultivation. He processes one hectare of sugar cane every week and supplements his income by processing sugar grown by other farmers. The end product is panela, a hard ball of concentrated sugar which Colombians use to make drinks and prepare food.

Stirring the sugar paste to make 'panela'
Pedro has not looked back since joining Contactar. As he puts it: “When I took over the factory all the workers had to start a 12-hour shift at 1 am. The loans from Contactar helped me to pay for new and more efficient machinery. Now most factory workers start work at 5 or 6am.”

Pedro’s story is just one of many examples of Contactar’s financial and technical assistance bringing real and lasting improvement to the lives of small-scale entrepreneurs. For Oikocredit, partnering with Contactar is a perfect match with its own goals of supporting small businesses that are economically, socially and environmentally sustainable.

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