(August, 2024) KaldiMarket is pleased to announce the launch of its new ‘Harvest Liquidity Finance’ product. This product empowers SME coffee exporters, enabling them to grow their businesses and compete effectively in an increasingly consolidating global coffee market. KaldiMarket, via its Kaldi Finance division, aims to address critical gaps in liquidity and capital at the harvest level, which is essential for creating competition and ensuring the sustainability of the coffee supply chain.
Trade finance applications by SMEs are disproportionately rejected by banks, with 45% of all applications rejected due to a lack of collateral, a lack of long-term transaction history with bank lenders, and insufficient credit history, amongst other factors.[1] The widening trade finance gap, which reached a record $2.5 trillion in 2022, has been cited as a contributing factor to the increasing cost of a cup of coffee for consumers. Insufficient access to liquidity has decreased stability for both growers and buyers, pushing the coffee sector towards greater consolidation and, as a result, is threatening the livelihoods of millions of small-scale farmers. KaldiMarket’s Harvest Liquidity Finance product does not have the constraints of bank lending. It is designed to appeal to SME exporters who need access to capital in a timely manner to ensure farmers are paid immediately upon completion of their harvest.
Rachel Hillel, Chief Operating Officer of KaldiMarket, shared her insights: ‘Having spent eight years in the coffee roasting industry, I understand the challenges that SME exporters face in securing financing for harvest purchases that fit a flexible business model. It’s crucial to combat the consolidation of the coffee sector to maintain choice and quality for independent roasters around the world and preserve a competitive environment that benefits farmers and roasters.’
In addition to the Harvest Liquidity Finance product, KaldiMarket is developing a micro-lending product designed for farmers seeking yield, environmental, and income improvements. This product focuses on improving crop yields, enhancing farming practices, and creating carbon reduction units (CRUs) for sale alongside their harvests wherever possible. These CRUs offer farmers a new asset class to sell while also ensuring compliance (and demand for their coffee) within stringent EU carbon reduction regulations. Notably, Germany remains the world’s second-leading coffee-importing nation after the United States.
Professor Stefan Allesch-Taylor CBE FKC, President and Founder of The Kaldi Foundation, based in Basel, Switzerland, emphasized the urgency of the situation: "The $55 billion annual green coffee market is widely recognized as deeply inequitable. The current economic model fails to support the livelihoods of millions of producers and is a grotesque economic injustice. It is only by providing financing, maintaining competition, and designing new income streams that we can address the crisis facing millions of smallholder coffee farmers worldwide. Providing roasters with quality, transparent, traceable and sustainable coffee compliant with all regulations is the other half of this equation. KaldiMarket is developing more products and services that will drive value for all, not just some, of the participants of the worldwide coffee market. The coffee market is an extremely valuable sector to so many emerging and frontier market economies. It requires urgent intervention to meet exponentially increasing demand in both the developing and developed world.’
ENDS
About KaldiMarket
KaldiMarket Ltd is part of the ecosystem of the Kaldi Foundation, Switzerland. The company focuses on two sectors: coffee and gold.
About The Kaldi Foundation
Established in 2024, The Kaldi Foundation is committed to supporting smallholder commodity producers around the globe who are suffering from poverty and hazardous working conditions. The Foundation comprises a team of award-winning humanitarians, technologists, and professionals with a proven track record of impactful international interventions.
The Kaldi Foundation is a registered charity in Switzerland under the supervision of the Federal Supervisory Authority for Foundations (FSAF).
[1] 2023 Trade Finance Gaps, Growth, and JobsSurvey (ADB Brief 256), p.3