El Salvador is the smallest country in Central America and one with relatively few natural resources compared to its neighboring countries. Small beekeepers are keen to build sustainable businesses and increase their capacity to export honey.
Additionally, honey production is also important to farm businesses, since the farms where beehives are maintained typically produce 20% more fruit and vegetables than other farms.
What is Microleasing?
Beekeepers exporting from El Salvador must comply with international food security standards, which include the use of stainless steel equipment. They need financial products to help them access this expensive and specialized equipment. So Swisscontact, along with its local financial partner CREDICAMPO, has developed an innovative financial product based on the Microleasing Business model, which allows beekeepers to access funds without having to present any collateral.
The lease-to-own mechanism works with a down payment of 15% of the total cost of the selected equipment (on average $1,800) and then regular payments over the next 2 to 4 years. At the end of the payment period, the beekeeper becomes the full owner of this equipment.
Tito Flores from the city of Chalchuapa on the western zone of El Salvador, received a business grant of $200 in April 2016, and he invest $130 to acquire a brand new honey extractor that complies with all the international food safety standards required by the European market. With this new equipment, he is now more productive, as the capacity is bigger than with the one he had before. This new investment will enable Tito to sell his honey to one of the main honey exporters in the country.
In this pilot phase, the goal is to provide business grants to 100 beekeepers in El Salvador access to new equipment acquired through Microleasing.
Swisscontact’s Central American Beekeeping Project
Financed in part by Swisscontact and the Inter-American Development Bank Multilateral Investment Fund, the regional beekeeping project in Central America (El Salvador and Nicaragua) aims to increase the access to better markets for 1,000 small beekeepers. The goal is to increase income and employment, along with facilitating the continued pollination services that bees implement during every productive season.