RSF Social Finance Makes a Loan to Madécasse
RSF Social Finance Makes a Loan to Madécasse
CAMPAIGN: Financing Announcements
SAN FRANCISCO, October 6, 2014 /3BL Media/ - RSF Social Finance (RSF) is pleased to announce a new loan to Madécasse, a social enterprise that makes chocolate and vanilla products in Africa. RSF provided a line of credit that will allow Madécasse to finance their inventory purchases and assist with cash flow gaps throughout the year.
Madécasse was founded in 2008 by Tim McCollum and Brett Beach. As Peace Corps volunteers in Madagascar, the pair fell in love with the country and wanted to do more to help its economy after their PCV service. Troubled by the fact that Africa supplies 70% of the world’s cocoa but less than 1% of its chocolate, they crafted a mission to create real change in Madagascar by keeping the entire chocolate production process local. Madécasse buys cocoa from local farmers and provides them with skills training and above-market wages. The company takes advantage of the full production capacities of Madagascar: From grinding and processing the cocoa, to making the chocolate, to wrapping and packaging. This creates additional jobs and helps build industries to drive sustainable economic development in one of the poorest countries in the world. By keeping all manufacturing in Madagascar, local farmers benefit four times more than they would have from the fair trade system.
“Companies like Madécasse take the concept of fair trade to another level,” says Kate Danaher, Senior Lending Associate at RSF. “By turning raw materials into finished products in-country, they provide skilled jobs and economic opportunities to people that have few options.”
Most of the world’s cocoa comes from Africa, where it is mainly grown on small plantations by farmers living in poverty. By contrast, most of the world’s chocolate is consumed in the wealthy regions of Europe and North America. Despite the high price tags on chocolate at the grocery store, most cocoa farmers only earn a small fraction of the profit. But by producing their products in Africa and sourcing all ingredients locally, Madécasse has created meaningful income for more than 200 people in Madagascar.
In addition to providing workforce training and fostering poverty alleviation and sustainable economic development, part of Madécasse’s mission is to help preserve the natural environment. Due to its unique geographic location, 85% of the plants and animals in Madagascar exist nowhere else in the world. But the pressures of extreme poverty force many Malagasy people to cut down trees for firewood and charcoal in order to survive, contributing to the loss of the country’s storied rainforests and indigenous species. Madécasse works with cocoa farmers to regenerate the shade-giving forests that shelter their cocoa trees, restoring biodiversity to the soil, flora and fauna. To date, the company has planted over 5,000 trees to help create the needed shade for cocoa to flourish.
And RSF is helping Madécasse to further its mission. “Working with RSF means we can pursue our two bottom lines with ease and comfort,” says Madécasse co-founder and CEO Tim McCollum. “RSF ‘gets’ what we’re doing, and they embrace it. This loan means we can grow our business, which means we can have a bigger social impact in Madagascar.”
It couldn’t be a better fit.
About RSF Social Finance
Located in San Francisco, CA, RSF Social Finance (RSF) is a financial services organization dedicated to transforming the way the world works with money. Since 1984, the organization has made over $275 million in loans and $100 million in grants to non-profit and for-profit social enterprises working in the areas of Food & Agriculture, Education & the Arts, and Ecological Stewardship. RSF's lending capital comes primarily from 1,500 individuals who have invested $1,000 or more in the organization's Social Investment Fund. Investors earn a competitive return on their money comparable to a certificate of deposit while their funds are deployed to leading social enterprises. To learn more, visit www.rsfsocialfinance.org
Founded in 2008 by former Peace Corps volunteers, Madécasse is the only company producing high quality bean-to-bar, hand-wrapped chocolate and vanilla products on the continent of Africa. Unlike traditional chocolate manufacturing which creates only minimal income for cocoa farmers, every process in the Madécasse chocolate value chain happens within the borders of Madagascar. By providing equipment and training – and producing the entire product locally – Madécasse is able to return 100% of production costs to the people of Madagascar. As a social enterprise, they measure success by the quality of their product and their social impact in Africa.
Kate Danaher, Senior Lending Associate
Megan Mendenhall, Communications Assistant