Green Value Tool shows the way forward for community enterprises
In Indonesia’s crowded coffee market, a financial planning tool has sparked hope for the future of community-based enterprises. The Akar Tani coffee cooperative in Bantaeng, South Sulawesi was the first to use the Green Value Tool in Asia with support from RECOFTC and the tool's co-founder, Shoana Humphries.
“The tool helped map opportunities to grow the cooperative, while also being aware of the risks,” said M. Irzad Syafar, the head of Akar Tani. Akar Tani provides opportunities for farmers to maximize returns from growing high-quality arabica coffee beans.
Community-based enterprises, like Akar Tani, often lack the tools to monitor and manage their financial data. This increases an enterprises’ risk when expanding. As part of an initiative to secure the financial viability of community-based enterprises, RECOFTC and Akar Tani worked together to strengthen capacities and pilot new tools for the community.
RECOFTC had previously trained Akar Tani on market analysis and business development. This helped the cooperative establish a business plan, a financial monitoring system and obtain a loan from the government for six years. In May, Akar Tani decided to see if it was on track to implement its business plan and repay the loan.
Over four days, members of Akar Tani and Balang, a local partner organization, participated in RECOFTC’s training on data compilation to determine production costs. Lissa Gabriella, training coordinator for RECOFTC’s Indonesia Country Program and the lead trainer, introduced Green Value at the training.
“The Green Value Tool provides step-by-step guidelines to help community-based enterprises develop their financial management capacity,” said Lissa.
Using the Green Value Tool improved Akar Tani’s knowledge on how to record and compile financial data, identify costly activities and strategically allocate resources. The data shows that Akar Tani is profitable with a 31% rate of return.
According to Ramadhani Arumnigtyas, a member of Akar Tani, this information helped the cooperative to identify weaknesses and areas for improvement. Akar Tani can now assess the viability of future business scenarios, such as adding new products, changing prices and adjusting the number of units sold.
Financial awareness is important for community enterprises to become viable, long-term businesses. After the successful training, RECOFTC is applying the Green Value Tool in other communities across the Asia-Pacific.