Spinning machinery on its way!

The spinning machinery for the Genesis cooperative is on its way! The equipment

has been purchased and we expect it to ship in November to arrive in Nicaragua before the Christmas holidays. This is cause for great celebration before we get down to the work of figuring out how to run a spinning plant!

Over the past six years we’ve written literally dozens of grants seeking funding for the machinery and have received letters back saying, “What a wonderful and ambitious project! When it’s up and running, let us know, we’d love to be a part of it.” This frustration was a huge learning process for us, making it clear just how difficult it is for a medium size business to get start up capital – most funding agencies don’t give grants for construction or machinery – and ultimately inspiring us to set up the Vida Fund to help co-ops in this position.

The fledgling Vida Fund, however, doesn’t currently have enough capital to cover the purchase of the spinning machinery. We have been lucky enough to find the Local Development Fund (FDL), a Nicaraguan microfinance institution which shares our vision of creating an organic cotton production chain in Nicaragua and is acting on this vision by loaning the money for the machinery! The loan is for $230,000 to be paid back in six years at 14% interest. That interest rate – and 0 commission and 0 legal fees – is unbelievably good in Nicaragua, where many microfinance institutions give a good deal at 35% interest and a more likely rate is 50%. Still, the co-op will end up paying nearly $100,000 in interest alone.

How can we help? The co-op will be allowed to pre-pay the loan. Our Vida Fund loans to Genesis at 6% annual interest, but lacks sufficient capital to loan the $230,000 for the purchase of machinery. New donations and loans coming into the Vida Fund, however, can go toward paying off that machinery early, saving Genesis thousands of dollars. If you or anyone you know can donate or invest in the Vida Fund (donations of any size, loans minimum of $5,000 for 5 years), please contact us at jhc@jhc-cdca.org.

We expect the spinning machinery to arrive in Nicaragua in early December…it will be a jubilant moment for co-op members to see the machinery in their building, and the New Year will be a New Genesis, a New Beginning…the beginning of the adventure of setting up machinery, learning to run it, learning to run a business…it’s going to be tough. But at this stage, we know we’re up to the challenge. – Becca