Prothem Usine SA is the largest privately-owned tea processor in Burundi. Prothem provides financial services to farmers through its subsidiary SOCADE Microfinance. SOCADE provides farmers with credit, transaction services, and risk mitigation instruments. Prothem provides farmers with inputs (seedlings and fertilizer), and has a Plantation team that assists farmers in all aspects of planting, growing, and harvesting their tea.
In this project, Prothem will partner with SOCADE to provide both agricultural and financial services to smallholder farmers suppliers. Prothem will develop a formal outgrower scheme partnership with farmers. Through this outgrower program, farmers will be trained on global GAP to ensure tea quality, will have access to financial services for inputs and other investments, and will have a guaranteed offtake market for their green leaf.
LEAFS is a holistic package of products and services which includes both extension services and financial services, and the first of its kind in Burundi offering value-chain financing to farmers. The Burundian tea sector has historically been government-run and continues to be dominated by the main parastatal tea company. Smallholders have thereby been historically disadvantaged and need additional support to level the playing field. Prothem has seen that combining financial services with market access and improved sales can accelerate the impact on additional income for farmers. Through the value chain the market for farmers is secured and at the same time the combination of value chain development and finance gives processors access to raw material it needs. As a tea grower, buyer, processor and seller, Prothem (and SOCADE) are well-placed to understand the challenges in each stage of the value chain and to develop financial products that adequately meet farmers’ needs.