Development of Rural Business Chains

Many smallholder farmers and producer groups in Bolivia have low yields and incomes. The Development of the Rural Business Chains Project utilises the franchise model and connects urban markets and underserved rural areas that produce chili peppers, amaranth and honey.

The franchise model allows actors in rural areas to gain access to national and international markets, and input services.

This concept allows a franchise company to extend its presence to rural markets and supply chains, and this produces a win-win situation for both parties. Larger companies can achieve economies of scale and profit, while boosting economic and social impact for people living in poverty. This approach generates more employment and increases income for the franchise holder, the farmer and their producer association, and lastly their communities. The project is inclusive, allowing competitive business and for people living in rural areas to be included as employees, customers, and the supplier.

The franchise method uses a proven business model. The farmer is linked to the franchise – allowing for improved product price, access to a market, a cut down in costs for production and marketing, and training and expertise. Using the franchise model also allows the franchise holder to get loans at lower rate as they are backed by known a well-known brand. All this contributes to improved production, higher incomes and better living standards.

For this project, SNV provided technical assistance to the participating companies and new franchise holders, with the aim to improve the productivity and quality of products. In addition, SNV supported franchise holders and producer groups to access finance by helping them to develop their business case.