Robust local banks are the motor behind the agricultural sector. This belief spurred Rabo Partnerships to support Banco Fie in Bolivia in becoming a strong, all-finance bank.
Banco Fie, originally a microcredit bank, has built up a stable position providing farmers with small loans and payment products. Its loans average 5,000 euros and have a low default rate. The bank has almost 1 million clients (out of a population of 11 million!), is profitable, and has built up a reputation of trust.
Crucial links in the beef value chain
In order to become future-proof, it is essential for Banco Fie to develop in other areas: it needs new products, a more robust IT environment, professional risk management, and a broader client base. Since February 2017, Rabo Partnerships (previously known as RIAS) has been carrying out an analysis of the current situation and identifying development opportunities for Banco Fie.
“Financing more agribusiness safeguards feeding the population”- Dominic Terberg, agribusiness expert at Rabo Partnerships
Towards more food production
By sharing its knowledge, its network and its financial solutions, Rabo Partnerships wants to support Banco Fie in improving its position in Bolivian agribusiness. A key theme for the bank is increasing the sustainability of the country’s food and agricultural sector.
Dominic Terberg is an agribusiness expert at Rabo Partnerships and has been involved in the project since August. His task in Bolivia is to map out the value chains for the beef and soy sectors. This involves analyzing the different parties in the value chain, the processes, the way the system works, and the opportunities and obstacles. He is also looking at the position of the farmers and other players in the chain, including the government.
Rabo Partnerships and Banco Fie will use the reports to develop a new agribusiness strategy for the South American bank. “If at the end of the day Banco Fie is able to finance more agribusiness, we are stimulating food production and safeguarding the feeding of the population,” says Terberg.
Banco Fie helps farmers grow
Safeguarding food for its own people
Despite Bolivia's progress in recent decades, there are still some four million Bolivians living in poverty. The government is therefore focused on feeding its own people. Food production must rely as little as possible on imports, and food can only be exported if supplies to the local market are assured.
Maintaining one's identity
Banco Fie began in 1985 as a pioneer in sustainable financing of the agricultural sector. Now that it is growing, Banco Fie plans to expand its services, for example by providing mortgages for social housing, a relatively new growth area. That way, more Bolivians who have limited financial means can own a house or a piece of land. Banco Fie also gives financial training, mainly to women and young people.
“A more stable bank can help the farmers for the long term”- Dominic Terberg, agribusiness expert at Rabo Partnerships
A wide-ranging project
The Rabo Partnerships project will take approximately three years. During that period, various experts will be working on different aspects of the strengthening of Banco Fie's operations, such as the setting up of an ICT infrastructure and product development. Dominic Terberg returned to Bolivia in early February to map the soy value chain with Victor Ikeda, a colleague from Rabobank Brazil. They looked at the challenges that soy farmers and others in the chain face, and how the bank could help them. Terberg: “We are building up knowledge to help make the bank more stable. That in turn helps farmers and other players in Bolivian agribusiness for the long term.”
Click here to take a look at the work being done by Terberg and his colleagues.