How our assessment tools can create access to finance

In a recent article, Lucas Simons argued for a systemic approach to solving the access to finance issue and for interoperability of actors in the ecosystem. For this approach to work, it is important that all actors use standardized metrics and allow the experts in each area take the lead. Towards this end, IDH Sustainable Trade Initiative works with SCOPEinsight to professionalize the Ivorian cocoa sector and increase cooperatives’ access to finance, using SCOPE assessment tools and analysis.

The benefits of using SCOPE assessments

When trying to professionalize a farmer organization, it is important to understand how developed the organization’s professional practices are. A thorough understanding of the organization leads to a thorough understanding of its needs. Only then can a project make a plan to effectively address those needs. This sort of baseline understanding also makes it easier to track progress as the cooperative makes efforts to professionalize.

SCOPEinsight’s analysis into cooperative professionality includes the measurement of key indicators such as cooperative unit sales price, farm gate price, production volumes, and loan sizes. Furthermore, SCOPEinsight has the granularity of data to breakdown the analyses per gender, country, certification, cooperative size, and professionality of the cooperative. Our tools are widely accepted across the sector as standard.

Our different assessment tools

When working with SCOPEinsight, the first step is to choose an assessment tool. We currently offer four tools: SCOPE Input Retailer, SCOPE Agent, SCOPE Basic, and SCOPE Pro.

Our four different assessment tools can be used for different sorts of organizations.

Each tool has a different target group. SCOPE Input Retailer is for input suppliers and is linked with our Last Mile Retailer tool. SCOPE Agent is for lead farmers and field agents. SCOPE Basic and SCOPE Pro are both for agri-SMEs, but SCOPE Basic is for emerging organizations, while SCOPE Pro is for more professional organizations that have at least three years of financial statements.

The SCOPE Basic tool is our most popular assessment tool. It assesses farmer organizations across eight different dimensions of professionalism: internal management, operations, sustainability, financial management, production base, market, external risks, and enabling environment. Each dimension also has multiple subdimensions. Each dimension receives a score, which are then put together in a weighted average to create the overall score. This is ideal for assessing the professionalism of emerging farmer organizations and identifying the places where they can grow.

For farmer organizations that already have a higher level of professionalism, the most appropriate tool is the SCOPE Pro. This tool assesses along the same eight dimensions of professionalism as the SCOPE Basic, but also adds a ninth dimension: financial performance. The SCOPE Pro can be used as a graduated form of the SCOPE Basic. It assumes a higher level of professionalism, meaning that the SCOPE Pro assesses organizations more critically. As such, it is best for organizations that have grown beyond the SCOPE Basic assessments.

How SCOPE tools are helping IDH reach its goals

In 2017, IDH created the Cocoa Challenge Fund (CCF), which works to help cocoa cooperatives in Côte d’Ivoire to access finance. It both increases the bankability of the cooperatives and supports the financial institutions to offer the loans these cooperatives need. Within a year of its inception, the projects under the CCF were already working with over 160,000 farmers and professionalizing 123 cooperatives, with plans for further growth. IDH also works with companies like Barry Callebaut and Cargill to professionalize their suppliers.

As an essential step in professionalizing cocoa cooperatives, IDH uses both SCOPE Basic and SCOPE Pro assessments. In 2017, when the CCF project began, they used SCOPE Basic to establish a baseline for over one hundred cooperatives. Two years later, when they performed the first round of reassessments, any cooperatives who scored higher than a 4[1] in the SCOPE Basic baseline were reassessed with the SCOPE Pro. There were four cooperatives in 2019 who met these parameters. These cooperatives were professional enough to graduate to the next level. When IDH performed the second round of reassessments in 2020, they again graduated the most professional cooperatives. In 2020, sixteen cooperatives were professional enough to switch to SCOPE Pro.

IDH saw an increase in professional cooperatives as they continued their work.

The quadrupling of professional cooperatives from 2019 to 2020 shows that IDH’s efforts are having an impact. As cooperatives reach a point of being able to graduate to the SCOPE Pro tool, they prove themselves to be more prepared for loans and financing. The more cooperatives grow and professionalize, the more access to finance they will have, and the more the entire sector will be able to mature.

Are you interested in using SCOPE tools to help in your own work? Contact us today to find out how we can help you achieve impressive project results.

[1] The SCOPE scoring system goes from 1 to 5, with 1 being the least professional and 5 being the most professional.

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