Trapped in the Middle


Ripe and unripe coffee
Dennis Tang, via Flickr

Marina Santee and Ryan Geertsma look at an organization lending to middle-sized businesses. This work creates jobs and opportunity.

Transcript


Voice 1

Welcome to Spotlight. I'm Marina Santee.

Voice 2

And I'm Ryan Geertsma. Spotlight uses a special English method of broadcasting. It is easier for people to understand, no matter where in the world they live.

Voice 1

Imagine working all day under the hot, burning sun. You do not know if you will have work again tomorrow. You are working just to survive. New equipment would help your work go more quickly. It would also help your business make more profits. But you cannot get enough money to purchase new equipment. So instead you just keep working. You want your situation to improve but you do not know how to make it better.

Voice 2

Many medium-sized business owners live like this. And they have become used to it. There are many organizations that offer small loans to very poor people trying to start businesses. This is called "microfinance." There are also banks that offer financial aid to larger businesses. However, many other businesses get lost in the middle. They are only medium sized. They are either too big or too small for a loan. So they cannot compete with other businesses.

Voice 1

Today's Spotlight is on Root Capital, an organization that helps businesses by lending money. They especially lend to businesses that are trapped in the middle: too big for microfinance and too small for a bank loan.

Voice 2

Shiwahiade Munuo is a coffee farmer in Tanzania. Shiwahiade did not make enough money as a coffee farmer to support her family. Finally, she almost left her farm. But instead, Shiwahiade joined another group of farmers. They tried to work together to increase their profits. But they still did not make enough money to survive.

Voice 1

Shiwahiade's group of farmers was using an old method to process the coffee beans. Their old method was slow. A lot of the coffee was not good enough to sell. It also wasted a lot of water. No matter how hard they worked, they could not process enough good coffee.

Voice 2

So the group decided to buy new coffee processing machines. However, the machines cost a lot of money. Their group business was too small for a bank loan. The banks were worried they would not get their money back. So they thought about asking the government for a loan. But the government would not lend them money because they were too big!

Voice 1

In 2006, Root Capital got involved. They lent Shiwahade's group of farmers enough money to purchase 22 new machines for processing coffee. Now, they make two times as much money for each bag of coffee. This helps every family in the group to live a better life.

Voice 2

This was true for Shiwahade's family. She saw many positive effects, especially for her children. She told Root Capital:

Voice 3

"Our children no longer have to help us with work, so they have time to sit down and study for school."

Voice 1

Root Capital does this all over the world. They tell international companies about the local medium sized businesses. Big companies order goods from the local businesses. Then Root Capital gives the local businesses a loan so they can fill the order.

Voice 2

The local workers use the loan to make their product. They send their product to the big company and the company pays Root Capital for the products they received. Over time this is how the local business's debt is paid off. Once the debt is paid off the local workers can use their supplies again and again to make more profits.

Voice 1

Because of Root Capital, medium-sized businesses sell their goods in stores all over the world. Some individuals donate money directly to Root Capital to support their cause. But most of the money for loans comes from the large companies that promise to buy goods from the local businesses. Root Capital works in many countries around the world. In India they work with a company called People Tree. People Tree is a company based in the United Kingdom. It makes clothes using cotton. Cotton is one of the world's most important goods. It provides a lot of profit for many developing countries.

Voice 2

However, cotton is not simple to grow. Most farmers who grow cotton use pesticides. These chemicals kill insects that can hurt crops. But pesticides cost a lot of money. Over time, the insects also become resistant to pesticides - that is, it takes more and different chemicals to kill them. The farmers spend more and more money for pesticides. They have less and less money for their businesses and families. Many farmers go into debt because of buying all these chemicals.

Voice 1

People Tree works with two companies in India: Agrocel and Assisi Garments. Agrocel farmers grow cotton without using pesticides. Without pesticides, farmers can save the money they would usually spend on chemicals. This is better for the workers, the environment and the business. Assisi Garments uses this cotton to make beautiful clothes. Through People Tree, Agrocel and Assisi Garments have a big buyer. And People Tree has beautiful, natural cotton clothes to sell. The loans from Root Capital make all of this possible.

Voice 2

Loans from Root Capital make it easier for medium sized businesses to buy the supplies they need to be competitive. Now local businesses like Agrocel also have enough money to use farming methods that are healthy for the environment. Because of Root Capital many medium sized business like Assisi Garments are no longer trapped in the middle between being too big or too small for a loan.

Voice 1

But there are still a lot of families who fight to survive every day. Many farmers are in debt because they depend on chemicals like pesticides. Many businesses struggle because they cannot buy new equipment. Some children still work all day instead of studying. There are still many medium sized, local businesses who need help.

Voice 2

Rolando Lazo was one of these people. He is a coffee farmer in Nicaragua. Before getting a loan from Root Capital, Rolando did not even have a house for his family. He would work on other farms and sell coffee when he could. He never knew if he was selling it at the right price. Rolando said,

Voice 4

"There was no hope. You just work to survive."

Voice 1

Like Shiwahade, Rolando joined a group of coffee farmers. Root Capital gave a loan to this group to help all their farmers buy land. Now Rolando has a home for his family. He has land to grow coffee. He said,

Voice 4

"I feel excited and at peace. It is like being born again."

Voice 2

The writer of this program was Corrie Haluga. The producer was Mark Drenth. All quotes have been adapted and voiced by Spotlight. The voices you heard were from the United States and the United Kingdom. Computer users can hear our programs, read our scripts, and see our word list on our website at www.radio.english.net. This program is called "Trapped in the Middle." We hope you can join us again for the next Spotlight program. Goodbye!

Question:

Do you want to start a business? Imagine you have all the money you need. What kind of business would you start?

Comments


Avatar Spotlight
edwin
said on August 26, 2010

I WORKED IN THE AGRICULTURE AND I KNEW IT
THE LIFE OF FARMER IS VERY HART AND ALWAYS NEED HELP

Avatar Spotlight
vanha
said on October 13, 2011

Help them improve living conditions.Thanks for everyone !

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georgino
said on October 30, 2012

Our farmers need help   for their crops, difficult to fight alone and working the land, when I saw a farmer working I can see the food for the people, but If the land is abandoned what happened with the meal. For that is important that the farmers receive the support with loans with low taxes in pesticides or others products that is necessary to seed.
They must have advice for the government and technological support.
Nowadays is hard due weather conditions, global warming etc
Most of the medium sized business are struggling alone and the banks lend money with high rates of interest.

Bye good topic

Luis Piedra's avatar
Luis Piedra
said on October 30, 2012

The farmers needing of the help all us.
Thanks

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Derek Nguyen
said on October 31, 2012

this audio has more strange sound

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Dela
said on November 03, 2012

The farmers’ work is very much useful but it isn’t often appreciated. They really need to aid them. Thanks for an article! Goodbye!

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thanhdung07121985@gmail.com
said on January 16, 2015

Thank for Root Capital support farmers to get better business.They spend hand labor and money to produce   product for us as rice,fruit,vegetable,cloths.These are vital essential necessary for our life to exist.They seldom get profit from this farm business.But almost of us never care and appreciate them.Hope goverment and organizations always support farmer more and more!

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QuangTrang
said on January 17, 2015

Thanks for the question from Spotlight. I think, at this time I need to study more because I do not enough knowledge to do my job. So I need studying and need more experiences. I hope after 5 years I can do something which it hide in my mind. A support for the beginning of the business is very helpful.

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indawshan
said on February 06, 2016

In Myanmar (Burma), farmers who live in the country side is more difficult to get techniques. please, help them to improve living condition. Thank s for everyone.