THE STATE CREDIT UNION OF COFFEE PRODUCERS OF OAXACA (UCEPCO)
Faced with how difficult or even impossible it is for organizations to obtain credit from development banks or commercial banks due to lack of collateral, CEPCO sensed the need to promote and encourage the establishment and development of a financial institution that would give organizations access to credit that is agile and timely, and at reasonable interest rates, which could provide savings programs that offer better yields than commercial banks and offer immediate availability.
Thus it was that, in 1990, CEPCO began the process and promoted the incorporation and registration of the State Credit Union of Coffee Producers in the state of Oaxaca.
The UCEPCO is a credit-supplying institution regulated by the National Banking Commission.
UCEPCO began operations in 1994. Its main activity has been to provide CEPCO organizations financing for the collection and marketing of coffee. The loans are operated in a closed scheme between UCEPCO, CAEO, and the organizations, which minimizes the risk of default. To access credit, organizations must go to CAEO, which gets funds from UCEPCO to finance the organizations. CAEO guarantees payment of debts to UCEPCO and in turn delivers the resources to organizations; the organizations then distribute resources among producers against their production to be delivered at the collection centers of the marketing organization to be sold at fair trade. This pattern of operation has been implemented since the establishment of the Credit Union and has proven very effective.
Thanks to the joint efforts made by CEPCO/CAEO/UCEPCO, the sale of organic coffee takes place within the market for organic and fair trade coffee, giving producers greater certainty about the price for their coffee and reducing the likelihood of failure to fulfill its financial commitments to UCEPCO.
Over the years UCEPCO has increased the number of its members, has extended its geographical area of influence to other states, at the same time as it has diversified its activities and services.
Currently UCEPCO has four branches covering the state of Oaxaca. It also has members, especially organizations of small coffee producers, in the states of Chiapas, Veracruz, Quintana Roo, Guerrero, and Puebla.
In addition to the continued funding of coffee production in Oaxaca, Veracruz, Chiapas, Guerrero, and Puebla, it also supplies credit to other sectors in various agro-industrial activities, such as the production of pepper in Puebla; organic sesame in Oaxaca, natural gum in the Yucatan and Quintana Roo; as well as tropical hardwoods, livestock and commercial activities and services
The financial services that UCEPCO currently handles are:
Freely Available Rural Financing
Simple Credit Mortgage or Collateral Guarantee