Rising star Becho Woliso pays out dividend to its members

The Becho Woliso union is the best performing Ethiopian cooperative that Agriterra supervises. In the last four years, they've made huge progress with Agriterra in the fields of profitability, equity capital and capitalisation. This results in positive figures and a payment of dividends to its members.

It's all go for Becho Woliso. Good management and a decision to favour product differentiation have led to great results and a fantastic outlook for the future. The most important company figures from 2015 at a glance:

• 30% increase in equity capital
• 30% increase in assets
• Gross profit margin of 5%
• Healthy equity capital of 25%
• Payment of 12 million Birr in dividends to members
• Current ratio of 110%
• Quick ratio of 82%

Becho Woliso union
The union was established in 2002 and has been working with Agriterra for around four years. Becho Woliso is a collaboration of 55 smaller farmers' cooperatives from the area around Tulu Bolo. The number of members now stands at 58,712 farmers. Becho Woliso began life as a grain cooperative. It then became clear that grain alone could not provide a solid basis, so they invested in other crops such as chickpeas, wheat and teff. They also produce PP bags and artificial fertiliser, amongst other items.

The aim of Becho Woliso is to increase its members' incomes. The member farmers are connected to the umbrella union via their own cooperative. They receive their dividend via their own cooperative. Last year, a total of 12 million Birr was paid out in dividends. On a cooperative level, gross profit increased by 23%, whereas the number of active members grew by only 13%.

Spectacular increase in equity capital
In 2015, the union's management board invested considerable energy into increasing equity capital. By selling new shares to the members, equity capital grew to 25%, in contrast to the average Agriterra customer in Ethiopia, who has only 13% equity capital. This indicates that Becho Woliso has been effectively capitalised, with an additional bonus in the shape of excellent financial management. All information and activities have been well documented.

Thanks to a healthy equity capital, it's easier for the union to attract funding from outsiders. This in turn creates extra investment opportunities for the affiliated members. It's therefore logical that over the last few years, a lot of time and energy has been put into improving the equity capital of the Ethiopian cooperatives supported by Agriterra. Becho Woliso is proof that this results in more access to external funding.

Profitability
The stable net profit margin of 2% is the average figure in Ethiopia. Given all the developments and investments made in the past few years, it's impressive that Becho Woliso has succeeded in maintaining this percentage. One point to consider is the gross profit margin, which decreased in the space of two years from 10% to 5% in 2015.

With a current ratio of 110% and a quick ratio of 82%, liquidity is also looking good. This means that there's plenty of room for further investments in the years to come, and also plenty of opportunities to increase members' incomes in a sustainable manner. Since the collaboration began, enormous progress has been made whilst retaining a constantly healthy profit: a fact which Agriterra and Becho Woliso are both incredibly proud of!