Oikocredit, Karongi and Muganza Kivu Tea Factories to produce two million high-quality tea seedlings in Rwanda
Most of the funding for this project comes from investors from Oikocredit’s West German Support Association, showing yet again how close smallholder farmers are to Oikocredit investors’ hearts.
06 October 2020, Amersfoort, the Netherlands – Oikocredit International Support Foundation has signed a memorandum of understanding (MoU) with Karongi and Muganza Kivu tea factories in Rwanda to produce two million seedlings. The funds for this two-year project, worth around € 140,000, were mostly raised through Oikocredit’s West German Support Association.
In the MoU, Karongi and Muganza Kivu tea factories will take the lead in tea seedling production and Oikocredit International Support Foundation will cover the cost of production and capacity building activities which target smallholder tea farmers. Through capacity building, tea farmers will gain new skills in cultivating tea.
Karongi Tea Factory and its sister factory Muganza-Kivu source, process and market the green tea leaves coming from two farmer cooperatives Katecogro and Cothemuki. The two million seedlings will be distributed to 2,000 smallholder farmers who will be selected by Cothemuki and Katecogro. Participants will be equipped with skills on the best practices in tea farming through farm-based demonstrations and other practical learning methodologies.
The two factories have already signed agreements with their respective cooperatives to buy all the tea leaves that will be produced through this project. “Tea seedlings play a key role in the development of a tea plantation in its early stages and later to fill the gaps that occur after planting,” said Josiane Mutangana, Managing Director of Karongi and Muganza Kivu Tea Factories. “Due to its high cost of production and maintenance, these farmer cooperatives cannot afford to plant new seedlings regularly on their own. In the past we have invested our own funds to develop tea seedlings which we have given to farmers, it is great to see Oikocredit joining us in this noble cause.”
Ging Ledesma, Oikocredit’s Director of Social Performance Innovation, added: “Oikocredit seeks to work with and support organisations that focus on helping disadvantaged people to sustainably improve their income. We are pleased to have found such partners as Karongi and Muganza Kivu Tea Factories. Both organisations are running programmes that give back to the farmers and communities where they work. I also extend my gratitude to the investors who contributed to this project and ensured we can increase our social impact in the Rwandan tea sector.”
Currently, many smallholder farmers and agricultural organisations are struggling with the effects of the coronavirus. Oikocredit continues to look for ways to support its partners during this difficult time and assist their long-term economic recovery. Elikanah Ng’ang’a, Oikocredit’s Social Performance and Capacity Building Officer for Africa, explained: “Even if we are doing this in times of a pandemic, it is great to look beyond Covid-19 and think how we will secure livelihoods in the future. Tea farming presents an opportunity to secure livelihoods not only in the short term, but for many years to come and we are proud to be associated with this project.’’
Social impact investor and worldwide cooperative Oikocredit has 45 years of experience funding organisations active in financial inclusion, agriculture and renewable energy.
Oikocredit’s loans, equity investments and capacity building aim to enable people on low incomes in Africa, Asia and Latin America to improve their living standards sustainably.
Oikocredit finances close to 690 partners, with total outstanding capital of € 947 million (at 30 June 2020). For more information: www.oikocredit.coop.
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