Rice farmers may be offered speedier payment system

Last Updated on Tuesday, 3 November 2015, 21:23 by GxMedia

Cash-strapped Guyanese rice farmers could eventually be given a new opportunity to refinance their operations rather than await payment from millers and exporters.

The Curacao-headquartered Factor Plus is currently exploring the possibility of expanding its service beyond the Dutch-speaking Caribbean to other countries where farmers need urgent payments to continue their businesses. “We saw this as an opportunity to help farmers get cash flow and as such grow their business, ‘Factor Plus’ Business Development Officer, Paul Dijkhoffz told reporters.

He is among several financial experts who are attending the Caribbean-Pacific Agri-Food Forum at the University of the West Indies (UWI) Cave Hill Campus, Barbados to explore ways of providing financing to farmers.

With Guyanese and Surinamese rice farmers facing the identical problems of low or long-delayed payments at the hands of millers and exporters. Explaining the process, Dijkhoffz said after the supplies are received Factor Plus buys the invoices from the sellers, provides 80 percent of the amount due within 48 hours and provide the remaining amount minus the factoring fee. “Yes, all of those are on our radar because we have an office in Miami we also sell to distributors that distribute to the whole Caribbean so although we are not operational with a satellite office on all the islands, we do have clients scattered around.

We are always looking for new markets to service and now we think is the right time through the farmers’ association to delve into these markets that are here,” he said.

Much depends, he said, on discussions with the farmers associations at the Caribbean-Pacific Agri-Food Forum. “You want to have some sort of legal recourse if things go bad and we are in talks right now to have that settled that you have your credit insured, you have some sort of guarantees that if things go sour,” said the Factor Plus official.

As part of Factor Plus’ due diligence , it checks with customers for creditworthiness. “We take credit risk for the invoice iff the person does not pay, it is our problem, not theirs,” he added. Asked how competitive his organisation’s offer was, he said it fluctuates between four and seven percent interest rate based on the risk involved.

Factor Plus currently operates in Curacao, Aruba, Bonaire, St. Maarten and Miami. Currently, the company is exploring the possibility of expanding to other countries across the region for the first time in agricultural re-financing.