The 4 Madonne cooperative in northern Italy took advantage of a government-back mini bonds scheme to help boost funding to support the business’ expanding operations after banks refused to provide more finance. Andrea Setti, the cooperative’s financial controller told AFP:
"We already have some loans but, after a certain point, the banks don't want to give you any more."
The cooperative, which makes cheese from milk supplied by 40 different dairy farmers, managed to secure US$6.7 million (€6 million) worth of funds by guaranteeing loans against wheels of its own parmesan cheese.
Under the scheme, investors provide funding for six years in return for a five percent yield backed by cheese assets valued at a 120 percent of the bonds' worth.
The business said that the funds will help boost its presence into the US market and upgrade some of its own facilities.
The initiative is part of measures aimed at trying to help local Italian businesses generate money and expand their operations, amid signs that the country is going through a tentative economic recovery.
An increasing number of Italian producers are taking advantage of the 'cheese economy' to secure more finance with some traditional lenders still apprehensive about lending money to businesses.