MECAHC, one of our partners in Uganda, has secured a substantial loan of USD 200,000 from Root Capital. This critical financial boost allows them to strengthen their business, expand their reach, and maintain their independence. It’s a milestone that reflects MECAHC’s growing capacity and resilience in the competitive coffee market, and it highlights how Progreso’s support can open doors to larger financing opportunities. 

A key factor in MECAHC’s success has been Progreso’s close partnership with the Rabo Foundation. This loan is part of a collaborative effort, facilitated by an on-lending facility within the Rabo Foundation Technical Assistance Program, where Progreso provided targeted support through both access to finance and technical assistance (TA). This powerful combination of TA and financing aligns with our approach to sustainable growth, as highlighted in our recent experiences with partners in Mbale. 

With support from Progreso Foundation, MECAHC made its first international export in early 2023 in partnership with Dutch coffee buyer Zwarte Koffie and exporter Keynote Coffee. The Rabo Foundation was instrumental in making this contract possible, demonstrating the impact of shared expertise and resources on co-operatives’ success. 

As co-operatives like MECAHC grow, their working capital needs also increase, influenced by factors such as market competition, coffee price fluctuations, and member loyalty. MECAHC’s decision to secure a loan from Root Capital, which provided USD 200,000 at once, is a strategic move to meet these demands and secure the coffee for its next two export contracts. If MECAHC were to wait for repayment from Supremo-Progreso, there’s a risk that available coffee could run out, potentially jeopardizing two critical contracts. This decision, therefore, is not only timely but also sound from a business perspective. 

This September, representatives from Zwarte Koffie and Progreso visited MECAHC to explore new collaboration opportunities. These discussions are ongoing, and we remain committed to supporting MECAHC’s growth and strengthening its relationships with international buyers. 

Thanks to this loan from Root Capital, MECAHC can independently manage financing for its upcoming export contracts, reducing its reliance on Progreso’s financial support for these specific shipments. Independence is crucial, especially as MECAHC faces rising competition in Uganda, driven by increasing demand from Kenyan traders and price fluctuations in the coffee market. 

The loan also allows MECAHC to focus on timely coffee deliveries, addressing the scarcity of coffee and growing farmer reluctance to sell on credit. With Progreso Foundation and Rabo Foundation continuing to provide technical assistance in financial management and business planning, MECAHC is well-positioned to grow sustainably while fulfilling its commitments to local farmers and maintaining stability in the coffee supply chain. Additionally, we are exploring opportunities for MECAHC to apply for a direct loan from Rabo Foundation for future contracts with new or smaller buyers. 

Progreso Foundation is proud to have supported MECAHC in reaching this critical point. By dissolving our tripartite Sales Right Agreement for the remaining contracts, we pave the way for MECAHC to manage its finances independently—a key step in its journey toward sustainable growth.