The role of Inclusive Businesses and their contribution to micro and small producers in Bolivia

(La Paz, January 19, 2010).- CAF - Latin American development bank - and SNV, Netherlands Development Organization yesterday held the forum on Joint Action on Economic Inclusion against inequity in the financial institution’s auditorium in Bolivia. The objectives of the event were to present an inclusive business platform and show the successful ventures supported by the Inclusive Business Program for Micro and Small Producers, organized with a non-reimbursable cooperation grant from CAF.

"The development agenda which CAF is promoting considers economic and social inclusion as one of its pillars, because quality growth involves integration and access by the neediest segments of the population to all the benefits and opportunities created by the development process," the CAF director representative in Bolivia, Emilio Uquillas, said.

Inclusive Businesses are business initiatives which, by incorporating low-income communities into the value chains of companies, promote reduction of poverty and inequity, creating a win-win situation between businesses and communities.

At the Forum, the SNV explained the concept of Inclusion versus Poverty and emphasized the importance of the work in this field for reducing extreme social pressures, noting that almost 60% of Bolivia's population still lives in poverty and 71% receives an annual income below US$1,500, in addition to the inequity rates still recorded in Latin America." This shows that there is a large segment which still has immense unsatisfied needs as consumers and which, as suppliers, face barriers in accessing formal markets, Julio Garrett, SNV country director in Bolivia, said.

Uquillas added that inclusive businesses are a valid alternative for increasing the use of the infrastructure, which the country is developing with CAF support, because they generate opportunities for low-income populations through their integration into the productive sector and support for micro-entrepreneurs to improve their production skills and form a sustainable link with large- and medium-sized companies.

Inclusive Businesses offer mutual benefits to micro-producers and large companies

CAF and SNV signed an agreement in December 2009 under which the multilateral institution finances the Inclusive Businesses Program for Micro and Small Producers whose aim is to strengthen the competitiveness and productivity of rural producers in an effort to promote their inclusion as suppliers to companies in a range of sectors. The project has directly benefited 10,000 families in Bolivia.

The forum presented four inclusive businesses which have developed in the context of the CAF-SNV alliance, and which guarantee generation of jobs, higher income for primary producers and improvements in competitiveness and profitability, closing the virtuous win-win situation which characterizes this type of business.

• COPROCA produces and markets yarns, tops and clothing made of 100% Alpaca fiber which has a high level of quality and market positioning. With its participation in the CAF-SNV program, the company has achieved the inclusion of 50 producers of camelid fiber in a pilot community, which received training, technical packages, knowledge transfer, organic certification for their production and supplementary services; all of which generate more income at every stage of the production chain.
• Productos MAYA prepares and markets cow and goat milk - mainly for gourmet cheese. All its products are marketed nationally through supermarkets. Through the project, the milk-producing families became goat milk suppliers, improved their technical skills in milk production, genetic improvement, and livestock feeding and breeding.
• Another company which participated in this phase of the Program was Sociedad Industrial Molinera (SIMSA), which is engaged in wheat milling for flour production and sub products such as rolled oats and special cereals. The inclusive business consisted of creating a sales and distribution force formed by housewives in the most populous barrios and urban hillsides, which has achieved the company’s commercial objectives, raised the level of child nutrition, given employment to the women participating in the project and improved the quality of life of thousands of Bolivian families.
• The final presentation was the case of Pa & Pa, a Bolivian company based in Cochabamba which produces and markets frozen pre-fried potato and yucca for fast food preparation in restaurants in the city, and sale in supermarkets. An inclusive business was designed and implemented for this company, which incorporates 730 potato-producing families in Capinota municipality; in addition a business strategy was designed to improve the quality of industrial processes along the entire production chain. As a result, domestic demand can now be met and it will be possible to substitute imports and improve the technical and economic conditions at the stage of raw material supplies.

SNV is an international development organization of Dutch origin whose mission is to help overcome poverty and inequity in over 30 countries in Africa, Asia, the Balkans and Latin America, by focusing on raising income and creating jobs in low-income sectors, as well as improving their access to quality basic services. SNV Bolivia has been working in the country for over 40 years, focusing its action on economic inclusion in an effort to reduce poverty and inequity, with projects of Inclusive Businesses, Qualification of Work Experience, and advice for the public sector on design of inclusive public policies.