Union Regional de Huatusco
Approved to post Kiva loans from: Mexico
Kiva conducts regular, ongoing monitoring of all Lending Partners, but only posts status updates here in response to relevant, major changes at the partner.
Status Updated - August 25, 2015
For the last 12 months, Kiva has been working with La Union Regional de Huatusco to try to recover the remaining outstanding amounts due to Kiva lenders. According to the partner, their delinquent payments were the result of bad coffee harvests which prevented the partner from remitting funds to Kiva lenders. Kiva had established a restructured payment plan with La Union Regional in an attempt to allow repayment of funds over an extended period of time, but the organization did not make any of the agreed upon payments. Per the last status update, La Union Regional had received a Mexican government payout but chose not to use those funds to repay Kiva lenders on the amount owed. Kiva’s present assessment is that despite our efforts, this Lending Partner will continue to be unwilling to make further payments to Kiva lenders, and thus the remaining $174,175 in outstanding amounts due to Kiva lenders has now been defaulted. Kiva's partnership with La Union Regional de Huatusco is now closed.
Kiva's policy is to consider legal options in a situation such as this. However, based on our assessment of the likelihood of recovering funds, discussions with our legal team, and an evaluation of the local business and legal contexts, Kiva has decided not to pursue legal action against La Union Regional at this time. We may reevaluate in the future should our assessment change. If Kiva is able to recover any additional funds from La Union Regional de Huatusco, they will be applied to lenders' accounts on a pro-rata basis.
Status Update - April 28, 2015
Kiva has been informed that La Union Regional received the Mexican government payout mentioned in the previous status update, however the organization chose not to use those funds to repay Kiva lenders on the amount owed. Kiva plans to continue to follow up with La Union Regional with the goal of maximizing the recovery of lender funds, and may exercise additional legal and contractual rights and remedies available to us. Kiva may also formally declare La Union Regional to be in default on its loan obligations. We appreciate lenders' patience as we work to resolve this situation, and we will keep lenders informed as more information becomes available.
Status Update - January 13, 2015
Kiva has obtained new information on Union Regional de Huatusco's delinquent payment to lenders. 2014 was a bad coffee harvest year for La Union Regional and its farmers, and the organization did not receive as much coffee from its producers as it had projected, resulting in a tight liquidity situation. The organization then over-reported borrower repayments to Kiva prior to actually receiving the funds.
In October 2014, Kiva established a restructured payment plan with La Union Regional in an attempt to allow repayment of funds over an extended period of time, but the organization did not make the agreed upon payments. The organization has said it expects to have funds to repay Kiva lenders as soon as it receives a payout from a Mexican government fund, however it is not clear exactly when those funds will be received. Kiva will continue to follow up with La Union Regional with the goal of maximizing the recovery of lender funds, and will share updates with Kiva lenders as the situation changes.
Status Update - September 25, 2014
Union Regional de Huatusco is currently showing a 100% delinquency rate on Kiva. This rate reflects partner-level delinquency, rather than borrower delinquency. Lender repayments on La Union Regional loans happen when the organization receives payment from its coffee buyers. This season, La Union Regional successfully received coffee harvested by its borrowers, but buyer payments for that coffee have been delayed and therefore La Union Regional is unable to repay Kiva lenders at this time. Kiva has chosen to pause this partner until they are able to repay lenders the amount owed, and will continue to follow up regularly with La Union Regional with the goal of maximizing the recovery of lender funds.
Partner Description:
La Union Regional de Pequeños Productores de Cafe Huatusco (or, La Union Regional) is a member-owned, Fair Trade Certified coffee cooperative based in the state of Veracruz, a region defined by high- altitude coffee production. Today, it has more than 2,000 members in over 40 communities. Most are small farmers with less than 5 hectares of land.
La Union Regional is one of the few coffee cooperatives in Veracruz that has earned Fair Trade certification. It ensures that members are paid fair prices and wages, work in safe conditions, protect the environment, and earn community development funds to empower and improve their community. La Union is also one of the few in Mexico to own its own coffee processing plant that gathers, processes, and exports coffee for its members.
Kiva lenders can make loans to coffee growers who belong to La Union Regional. Three types of loans appear on the Kiva website:
1) Coffee production loans to help farmers expand their existing crop yields and increase their income. With a maximum term of 12 months, these loans are designed to fit the agricultural cycle, allowing farmers to make purchases during planting season and repay following the harvest. Coffee production loans help farmers maintain and grow their fields by cleaning, pruning, fertilizing, and conserving the grounds, delivering water, and replanting trees needed to shade the coffee plants.
2) Organic conversion loans help farmers transition from conventional to organic coffee production methods. Farmers cite high costs as the main barrier to converting to organic production. With Kiva loans, they have a great opportunity to use sustainable practices that help the environment and limit the effects of climate change in their regions. Given the length of the conversion process, farmers have the option to utilize loans that have three- to five-year terms.
3) Field renewal loans help farmers swap out their old coffee plants that are no longer
producing at capacity for new plants. New plants generally take three years to produce at capacity, temporarily reducing crop yield. Given the length of the renewal process, farmers have the option to utilize loans that have three- to five-year terms.
For the organic conversion loans and the field renewal loans, borrowers will pay interest only for the first two years and pay principal beginning in the third year.
All three types of loans help La Union Regional farmers smooth their finances throughout the year, insulating them and their families from unexpected expenses like medical bills, home repairs, and more. In addition to loans, La Union Regional provides additional technical support to its members receiving loans to help them achieve their long-term coffee production goals.
La Union Regional is enthusiastically backed by Fair Trade USA and Green Mountain Coffee Roasters, one of the world’s largest purchasers of Fair Trade coffee. Kiva lenders can purchase coffee produced by La Union Regional’s members through Green Mountain and its subsidiary brands, including Tully’s Coffee.
Because La Union Regional’s core business is not microfinance, there is some level of additional risk for lenders. Kiva’s partnership with La Union Regional is unique and unprecedented. For this reason, Kiva has not assigned the organization a risk rating.
Repayment Performance on Kiva
| This Lending Partner | All Kiva Partners | ||
| Start Date On Kiva | Apr 27, 2012 | Oct 12, 2005 | |
|---|---|---|---|
| Total Loans | $331,675 | $2,048,758,690 | |
| Amount of raised Inactive loans | $0 | $348,325 | |
| Number of raised Inactive loans | 0 | 296 | |
| Amount of Paying Back Loans | $0 | $153,933,040 | |
| Number of Paying Back Loans | 0 | 183,991 | |
| Amount of Ended Loans | $331,675 | $1,852,324,370 | |
| Number of Ended Loans | 434 | 2,496,556 | |
| Delinquency Rate | 0.00% | 11.72% | |
| Amount in Arrears | $0 | $10,838,102 | |
| Outstanding Portfolio | $0 | $92,466,642 | |
| Number of Loans Delinquent | 0 | 38,146 | |
| Default Rate | 52.51% | 1.82% | |
| Amount of Ended Loans Defaulted | $174,175 | $33,752,032 | |
| Number of Ended Loans Defaulted | 231 | 89,003 | |
| Currency Exchange Loss Rate | 0.00% | 0.47% | |
| Amount of Currency Exchange Loss | $0 | $12,742,203 | |
| Refund Rate | 7.11% | 0.53% | |
| Amount of Refunded Loans | $23,575 | $10,938,345 | |
| Number of Refunded Loans | 44 | 9,670 |
Loan Characteristics On Kiva
| This Lending Partner | All Kiva Partners | ||
| Loans to Women Borrowers | 24.90% | 78.48% | |
|---|---|---|---|
| Average Loan Size | $743 | $393 | |
| Average Individual Loan Size | $743 | $586 | |
| Average Group Loan Size | $0 | $1,910 | |
| Average number of borrowers per group | 0 | 8.3 | |
| Average GDP per capita (PPP) in local country | $15,600 | $5,592 | |
| Average Loan Size / GDP per capita (PPP) | 4.76% | 7.02% | |
| Average Time to Fund a Loan | 4.69 days | 9.12 days | |
| Average Dollars Raised Per Day Per Loan | $158.38 | $43.08 | |
| Average Loan Term | 7.58 months | 11.5 months |
Journaling Performance on Kiva
| This Lending Partner | All Kiva Partners | ||
| Total Journals | 368 | 1,222,149 | |
|---|---|---|---|
| Journaling Rate | 84.79% | 41.92% | |
| Average Number of Comments Per Journal | 0.00 | 0.02 | |
| Average Number of Recommendations Per Journal | 0.00 | 0.55 |
Borrowing Cost Comparison (based on 2012 data)
| This Lending Partner | Median for MFI's in Country | All Kiva Partners | ||
| Average Cost to Borrower | 30% APR | 74.00% PY | 26.44% PY | |
|---|---|---|---|---|
| Profitability (return on assets) | 1.3% | 1% | -1.32% | |
| Average Loan Size (% of per capita income) | N/A | 4.00% | 0.00% |
Country Fast Facts
- Country:
- Mexico
- Capital:
- Mexico City
- Official Language:
- Spanish 92.7%, other indigenous languages 5.7%
- Population:
- 120,286,655
- Avg Annual Income:
- $15,600
- Labor Force:
- agriculture: 13.4%, industry: 24.1%, services: 61.9%
- Population Below Poverty Line:
- 52.30%
- Literacy Rate:
- 93.50%
- Infant Mortality Rate (per 1000):
- 12.58 deaths
- Life Expectancy:
- 75.43 years