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Investment opportunity: Organic Options, Inc.



  1. Project information


Project TitleCold chain ang processing facility construction
LocationAntipolo, Rizal
Name of proponentOrganic Options, Inc. (OOI)
Head of organizationMike Melendres


Partnership start date27 Jan 2014
Report date18 Jun 2019


Reference numberSEL-2016-026SEL-2018-013SEL-2019-009SEL-2019-010
Date released28 Aug 201618 Sep 201824 May 201915 Jun 2019
Maturity28 Aug 202118 Sep 202024 May 202115 Jun 2024
Repayment frequencyQuarterlyQuarterlyQuarterlyQuarterly
Interest rate12%12%12%12%
Outstanding Balance840,5582,250,0001,500,0005,000,000

 2. Social enterprise description

OOI aims to be the largest and most trusted organic produce marketing company, ensuring consumer health and safety by revolutionizing agriculture in the Philippines. It develops farmer entrepreneurs that utilize integrated organic farming systems and educates consumers on the benefits of organic farming.

The organic produce marketing company bridges farmers and consumers to ensure clean, safe and healthy produce readily available. In 2014, OOI partnered with SEDPI which helped propel its growth. It also collaborated with the United Nation’s Food and Agriculture Organization which helped widen its network of small holder farmers.

To date, OOI markets organic vegetables of approximately 200 small holder farmers in Luzon.


  • Social enterprise opportunity

One of the challenges of OOI is its cashflow due to increase in purchase of organic produce from small holder farmers. It also experiences receivables collection delay from supermarkets.

If the cashflow challenge is addressed, OOI can increase its sales volume and expand its operations.

The demand for organic food in Metro Manila, particularly vegetables, is increasing. OOI’s current operations is not able to meet the market demand that leads to opportunity loss both in the growth of the organization and potential economic benefits to small holder farmers.

OOI could increase its sales through efficiency improvements in its operations. Its current practice and facilities lead to wastage that could be prevented with proper infrastructure.

The current facility has no cold room that leads to a break in the cold chain. Cold chain is process in which farm produce are maintained at specific temperatures to maintain freshness and suitability for consumption.

In addition, the flow of activity is not one way, decreasing efficiency of movement. OOI also lacks sorting tables; washing area is makeshift; and packing and sorting area is far from the dispatch area.

As much as 30% of farm produce are wasted due to the inefficiencies and lack of infrastructure. If these inefficiencies are addressed, OOI will be able to reduce waste and increase sales.

  • Stakeholders

OOI currently supports approximately 200 small holder farmers in Luzon. These farmers enjoy contract pricing that is generally twice or three times higher than farm gate prices. This leads to increase in income for their households and lifts them out of poverty.

The employees of OOI are regular employees unlike informal agriculture-based enterprises that prey on their labor. Farmers, packers, sorters, delivery personnel and other laborers are paid at least the minimum wage and are given full benefits as required by law.

The organization has a wide network of supermarkets where it regularly delivers. These are: SM, Robinson’s, Shopwise, All Day, Metro, Super 8, Landers, Walter mart, Fisher mall, Unimart, Makati supermart and Cash and carry. OOI influences these supermarkets to sell more organic produce so that consumers have better options for healthier food consumption.

3. Proposal details

OOI would like to achieve the following:

  • Increase the number of small holder farmers to meet the demand of the market for organic produce
  • Improve its facility to increase efficiency and reduce wastage

It hopes that through this improvements, OOI will be able to improve the quality of lives of small holder farmers and at the same time improve its financial sustainability.

  • Expansion of operations

OOI needs to address its cashflow problem by establishing a revolving credit line with SEDPI. The revolving credit line will allow it to purchase organic produce from small holder farmers. A PhP5 million revolving credit line subject to annual renewal is needed.

  • Facility improvement

There is a need to build a cold chain and processing facility that will enable OOI to store organic produce in a cold room. The facility will have a one way layout to increase movement efficiency.

Sorting tables and washing area will be built. The packing and sorting area will be located near the dispatch area.

  1. Social performance management

 Social performance

OOI is able to improve the quality of life of at least 200 small holder farmers. If a farmer household is composed of 5 family members, the organization directly impacts 1,000 individuals.

The organization assists smallholder farmers to adopt organic farming technologies. They also provide other capacity building interventions that help the farmers improve their knowledge and skills on sustainable agriculture.

  • Environmental performance

The farms where OOI sources its vegetables are mostly certified organic. This greatly reduces the negative effect of agriculture in the environment.

  • Financial performance
# of stores2138476171
Return on asset1.00%1.65%2.37%1.93%0.77%
Operational self sufficiency102%102%105%102%100%

OOI posted strong sales growth and expansion in number of stores in the past five years. However, the increase in sales volume has not yet led to improved financial performance.

Return on assets measures the efficiency of an organization in utilizing its resources to produce profit. The standard for return on assets is a rate higher than inflation. In the past five years, return on assets remained flat and was not able to beat inflation.

Operational self sufficiency (OSS) measures the ability of an organization’s income streams to cover all expenses. A 100% OSS means that an organization reached breakeven level. OOI is consistently higher than 100% in the past five years but falls short to reach the 120% standard.

On a financial standpoint, OOI is yet to show stronger financial performance. Its exponential sales growth and aggressive opening of stores in the past five years entailed a lot of investments that was frontloaded. In the succeeding years, OOI is expected to post better financial performance.

  • Repayment track record
Reference numberSEL-2016-026SEL-2018-013SEL-2019-009SEL-2019-010
Date released28 Aug 201618 Sep 201824 May 201915 Jun 2019
Maturity28 Aug 202118 Sep 202024 May 202115 Jun 2024
Repayment frequencyQuarterlyQuarterlyQuarterlyQuarterly
Interest rate12%12%12%12%
Outstanding Balance840,5582,250,0001,500,0005,000,000

The total loan amount exposed to OOI as of June 18, 2019 is PhP9,590,558. Since the partnership with SEDPI started, OOI has consistently paid its loans on time. Aside from the existing loans, OOI already finished paying 4 loan agreements.

There were two times in the past five years that it asked for delay in deposit of post dated checks since they were affected by the purchase of Robinson’s of Shopwise. The payments from Shopwise were delayed.

5. Social investment participation

  •  Qualifications
TrainingAttended and participated at least one of the training events of SEDPI or Vince Rapisura
MembershipFilled up the online SEDPI membership application form and successfully uploaded government-issued ID in compliance of Know your client (KYC) of the Anti-money laundering act (AMLA)
  • Investment information
Reference numberSEL-2016-026SEL-2018-013SEL-2019-009SEL-2019-010
Available for investmentPhP600,000PhP1,800,000PhP1,200,000PhP4,000,000
Repayment frequencyQuarterlyQuarterlyQuarterlyQuarterly
Interest rate12%12%12%12%
Minimum investment amountPhP100,000PhP100,000PhP100,000PhP100,000
Maturity28 Aug 202118 Sep 202024 May 202115 Jun 2024

The loans are extended to OOI without any collateral but with post dated checks as security. SEDPI does not offer any collateral nor guarantee of the investment. Social investors bear the risk.

To participate, you need to enter into a joint venture with SEDPI and it will joint venture contribution certificate. Payouts coming from repayments on principal and interest will be reflected in the social investor’s SEDPI wallet. Once in the SEDPI wallet, the amount no longer earns. Notify SEDPI if you wish to reinvest the amount in the SEDPI wallet.

The interest rate is computed based on diminishing balance method to reflect proper effective interest. In this method, the interest is only charged to the outstanding balance of the loan given a specific period. Sample computation shown in the table below:

DatePrincipalInterestAmt. DueBalance
  • Fees

There is a 3% entry fee to participate in the joint venture. If one intends to contribute PhP100,000, they should deposit additional PhP3,000 for the entry fee and for a total of PhP103,000.

If the joint venture contribution is redeemed or pre-terminated before two years, a 3% exit fee will be charged on the amount to be withdrawn since SEDPI will provide funds to replace the lost capital. For example, if PhP100,000 will be withdrawn, PhP3,000 will be charged to the amount which will mean that the net proceeds will be PhP97,000.

All remittance fees, if any, related to deposit, redemption and pre-termination shall be charged on the account of the social investor.

  • Other conditions

Social investors may only invest a maximum of PhP500,000 investment to OOI. This is to encourage portfolio diversification and at the same time avoid concentration of portfolio to a few.

SEDPI will provide a digital joint venture contribution certificate as proof to the social investor that can be viewed online. They must also have attended Vince Rapisura’s or SEDPI training events on financial literacy online or classroom setting.

 6. Procedure

  • New social investors

New social investors can accomplish online application form by visiting SEDPI Social Investments Online. They must apply for SEDPI membership online and will be asked to provide personal information.

All social investors are required to at least elect one beneficiary for the account. The ownership of the investment will be transferred to the beneficiary if something happens to the social investor.

They will also be asked to upload a copy of their government-issued ID in compliance with Know Your Client provision of the Anti Money Laundering Act (AMLA).

Upon successful completion of membership application form, they will receive an email containing login credentials and procedures on how to deposit initial investment.

When deposit is made to SEDPI bank account for the investment, the social investor will log in to SEDPI Social Investments Online and select advice for additional investment where they will input investment details and upload proof of remittance of their deposit.

  • Existing social investors

Existing social investors shall log in to SEDPI Social Investments Online using their credentials and select advice for additional investment where they will input investment details and upload proof of remittance of their deposit.

  • Bank account details

The following are the bank account details of SEDPI.

Account NameSEDPI Development Finance, Inc.
Unit 303 Loyola Heights Condominium, 23 Dela Rosa Street
Loyola Heights, Quezon City
Phone: +63 2 4338795
BankBanco de OroBank of the Philippine Islands
Account #0046900594493081115825
Bank Address768 EDSA, Barangay Pinyahan, Quezon City, PhilippinesKatipunan Avenue, Quezon City


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One Comment

  • Kaye Santiago says:

    Pwede po I explain ung process on a laymans term?sa start ng process of investing and the potential ROI after 2 years ofthe invested money. Thanks

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