Multibank provides funding for farming infrastructure
Praxis supports financing sustainable agriculture in Panama
Multibank is a private, local bank that has been operating in Panama for over 50 years. The bank focuses on lending to medium sized producers purchasing farm equipment and infrastructure, which helps increase productivity. Multibank finances farmers practicing sustainable agroforestry businesses in cattle ranching, rice, pineapples, citrus, vegetable, coffee and cocoa production.
Because the financial system in Panama finances only 2.2% of the total credit demand in the agricultural sector, Multibank meets a critical need as one of the few private banks in the country to lend to the agricultural sector. With adequate financing, Multibank's producers can invest in technology, scale their production, have access to local markets and compete successfully with regional peers and well as with agricultural imports. They also are able to implement sustainable practices to mitigate and adapt to climate change.
As a leader in sustainable finance, one area of focus is financing investments that promote water conservation and efficient waste management. Wastewater treatment and recycling of agricultural byproducts and solar energy will help mitigate the impact of agribusiness activities. Borrowing companies must hold an eligible sustainability certification, as well as meet additional requirements from a list of green items.
Another area of focus is promoting good management practices for sustainable cattle ranching, such as improved animal feed, inclusion of trees to create forest integrated pasture systems, improved waste management practices and more. These practices allow producers to utilize less land, reduce pressure on forests, recover degraded areas, increase carbon storage and reduce greenhouse gas emissions.
Through the provision of flexible and patient capital to this high impact sustainable agriculture sector, Multibank's lending practices have had positive social and environmental impact by creating green jobs, reducing carbon emissions, soil degradation and loss of water used for irrigation.
The Praxis commitment
Praxis Mutual Funds supports organizations such as Multibank through investments in Calvert Impact Capital, an impact-investing institution that helps people around the world through community development financing. It’s part of the Praxis commitment to place approximately 1% of each of its funds to benefit neighborhoods and individuals through community development investments.