A new Danish social finance provider, which offers loans to organic and biodynamic farms and fair trade, sustainable forestry or renewable energy projects in the Global South, has just approved its first four loans.
Merkur Development Loans plc (MDL) is a joint partnership between Merkur Cooperative Bank, an established and fully licensed Danish social bank and The Industrialisation Fund for Developing Countries (IFU). MDL was created to address a funding gap in the Global South for social enterprises that are too big to qualify for loans from micro-lenders and too small for commercial banks. The aim of the new venture is to lend to social enterprises, SME´s and cooperatives in the Global South, thus contributing to local development and employment.
The Board of Clann Credo decided to invest in MDL after hearing of the venture through the International Association of Investors in the Social Economy. It hopes to transfer the knowledge gained from the venture to Ireland and involve Irish organisations with an interest in investing in the Global South.
A social enterprise in Nicaragua has been approved a loan to support the large-scale cultivation of fine cocoa. The company provides loans at reasonable rates to small farmers, so they can purchase cocoa trees. It also provides training and counseling.
The second loan is to a family owned business in the DR Congo to purchase, process and export Fair Trade cocoa beans, vanilla, spices and vanilla flowers. The business trains and organises over 1,000 independent small farmers to improve their prospects. In return the small farmers are expected to employ around 140 people in their own enterprises.
The third is to a company in Mozambique, which produces organic candied fruit for muesli factories in Europe and organic frozen fruit pulp for yogurts. The company is organically certified it also acts as a local entrepreneurial center for women.
The final loan approval went to a start-up business in Tanzania, which develop a small household stove fired by jatropha nuts. Jatropha are very oily nuts, which are normally pressed to extract a viscous oil that can burn in lamps. The design of the cooker allows the burning of whole nuts. 6,500 stoves will be produced with the loan. The project only uses nuts cultivated in fences, which prevents erosion of agricultural land.