Ketiara: Independent Financing Options Enable Exponential Growth in Indonesia
Twenty years ago, Ibu Rahmah worked as a small-scale trader in northern Sumatra, purchasing a few pounds of hand-picked coffee cherries from individual farmers and reselling them to individual traders. In 2009, she organized 37 coffee farmers into the Ketiara cooperative. Less than a decade later, under her chairmanship, it has grown to be one of Indonesia’s most successful and well-respected coffee businesses, sourcing from nearly 2,000 farmers.
When Root Capital restarted its lending in Indonesia in 2014, we looked to Ketiara first. We started with half a million dollars in trade credit—financing that allowed Ketiara to pay farmers in the interim between harvesting the coffee and selling it on the global market.
“In the beginning,” says Ibu Rahmah, “we were doubtful about getting a loan credit from America. It was impossible. Usually collateral would be needed in asking for a loan. But with Root Capital, we just needed a contract, and then we could access the money without any hassle.”
Since then, the business has grown with us; our most recent loan was $1 million in working capital. But it’s not only the size of Ketiara’s credit that has grown. In the first two years after receiving a Root Capital loan, Ketiara’s annual sales increased by 66 percent from $3.3 million to $5.5 million. Average payments to the cooperative’s producers have grown apace, from about $1,500 to just under $3,000 per farmer per year.
The business has also diversified its contracts, adding four new buyers to the seven it was already working with—and providing it with greater power to choose its most profitable markets. “Disbursement from Root Capital makes it easier and faster for us to close contracts with buyers,” says Ibu Rahmah.
With increased revenues and access to credit, Ketiara has been able to make long-term improvements to member farms, ensuring the enterprise can improve yields and quality—and thrive for years to come. Additionally, under Ibu Rahmah’s leadership, the cooperative developed a line of coffee solely grown by women, dubbed “Queen Ketiara,” which has become one of their most lucrative assets. They also joined Allegro Coffee’s women-grown “Cafe la Duena” line, which is distributed in Whole Foods Market’s stores across the United States.
Ketiara invests the premium it earns from selling Fair Trade-certified coffee into better healthcare, education, and infrastructure for the surrounding area. In this, the cooperative has found an eager partner in Root Capital—a financial institution that prides itself on facilitating not just business growth, but community impact.
Information in this client profile is up-to-date as of publishing time.