1.
Anna.Bolin@iied.org 1
Anna Bolin
December 8th,
2016
Guatemala - progressive
forest governance in
support of SMEs
• National system for forestry
incentives: PINFOR & PINPEP
• US$ >$ 300 million 20 years,
• 430,000 ha of natural forest and
plantations established/managed, >1
million beneficiaries
• PROBOSQUE: US$ 625.7 million,
20,000 Jobs / year, 7.5 million farmers
• National alliance of forest
communities – 10 2nd level and 400 1st
level organisation 17.5% of
Guatemala’s forest cover, 30%
certified

2.
Anna.Bolin@iied.org 2
Anna Bolin
December 8th,
2016
Forestry Incentives Programs
BANRURAL
BAM (Banco
Agrícola Mercantil)
FEDECOVERA
AND ASSOCIATED
COOPERATIVES
FIDOHSA
Financiera de
Occidente, Funding in
key industries for
sustainable development
(specialising in forestry)
FORESCOM
Financial Fund to
Promote Community
Forestry Development
Private Sector
National mechanisms
(Funds from: BANRURAL, FIDOHSA, BID, CATIE FINNFOR II, Forestry Concessions, MICOOPE)
PINFOR
(Forest producers with
legal ownership of the
land)
 Forestry plantations
 Management of natural
forest for protection
 Management of natural
forest for production
Started: 1996
End date: 2016
PROBOSQUE
(Forest producers with legal
ownership of the land)
 Forestry plantations
 Management of natural
forest for protection
 Management of natural
forest for production
 Agroforestry Systems
(includes silvopastoral
systems)
Started: 2015
End date: 2045
PINPEP
(Smallholders without
legally ownership of the
land)
 Forestry Plantations
 Agroforestry Systems
 Management of natural
forest for protection
 Management of Natural
forest production
Started: 2010
End date: 2030
Public Sector
Funds obtained from: 1% of the Annual
Incomes Budget of the State of Guatemala,
per incentive program
Main objective: to promote forestry and
agroforestry activities related to
sustainable management, protection and
production
Options for forestry concessions MBR/options for
working capital and investment
Options for plantations (implementation and
harvesting)/options for working capital
MICOOPE
(Forestry loan, Coban
Cooperative)
BANRURAL
a) PINFOR loan
b) SME loan
Other mechanisms GuateCarbon
Financial mechanisms and options for forest SMEs

3.
Sustainable SMEs
Capacities
Interests rate
Scale of investment
Rate of return
Repayment period
Grace period
Risk Management
Marketing, financial management,
processing,
Diversification, development of
working capital reserves,
affiliation to apex organisations
5% up to 14%
Working capital for harvesting and
processing, investment in machinery,
Depends. Forest Concessions returns
high, plantations only at scale. High
repayment rates at 93-100%
>5 years
>=1 years
Commercial banks
Financial management
Guarantees
(person/assets), purchase
orders, INAB certificate
Varies from region to region
10-18%
Varies. 60-100% of value
of incentive/purchase order
2 months-7 years
depending (e.g. working
capital/machinery)
Public sector
Grants for 6-10 years
Guarantee funds, INAB technical
assistance, registration of
business (SEINEF)
PINFOR: approx. 33%
covered by incentives grant
(pine 2-5 ha, 20 yrs)
INAB & Municipalities:
Intecap, business dvt
services, roundtables,
n/a but likely to be >10%
Mix of initial capital from MINECO,
regional development banks,
donors
1 year for PINFOR
plant. 6 years for
Rubber (OCCIDENTE)
Letter from INAB verifying
participation in incentives
programme
Research and engagement
on behalf of forestry SME’s

4.
Anna.Bolin@iied.org 4
Anna Bolin
December 8th,
2016
Fedecovera: social business
and financial service provider

5.
Anna.Bolin@iied.org 5
Anna Bolin
December 8th,
2016
Findings: needs and
priorities
• Varies greatly from region to region
depending on main product and
market
• Lower interest rates
• Financial management capacity key
• Diversification and value addition- e.g.
processing, agroforestry, restauration
and bioenergy (Probosque)
• Scaling up technical assistance and
business support
• Collaboration between NGOs, banks
and government effective in improving
access

6.
Anna.Bolin@iied.org 6
Anna Bolin
December 8th,
2016
Findings: gaps
• Lack of financial options to investment
in processing and value addition -
what to do with all the plantation
wood?
• Understanding of risk and risk
aversion- what are the main needs
and risks of SMEs and vice versa for
FIs- establish more realistic
expectations on commercial banks
• What are the most suitable forms of
institutions and delivery mechanisms?
Role of cooperatives in improving
inclusive financial access and
sustainability of SMEs? What about
potential for scale?

7.
Anna.Bolin@iied.org 7
Anna Bolin
December 8th,
2016
Author name
Date
Anna Bolin
December 8th,
2016
Anna.Bolin@iied.org
Thank you!