The program will work with a limited number of 10-15 business associations/cooperatives selected nationally based on their significant role within the value chains they support and consult with other development partners. Each BA will be supported with a matching grant of up to US $50,000, which will be directly utilized to help other chain actors. A flexible matching ratio by the BA could range from 50% down to 20%. Depending on the income generation capabilities of the BA, the matching contribution might be expressed in cash or kind.
Business Associations resilience support may cover:
- Vertical activities: Cooperatives and business associations can have an essential role in providing information about market requirements and supporting their members in complying with them. The organizations can help for example, by providing training and improving modern production and management techniques.
- Horizontal activities: Cooperatives and BAs have a solid potential to reduce transaction costs and create economies of scale through horizontal activities. Horizontal activities include grouping together to increase small producers ́ bargaining power and, therefore, strengthening their position in the value chain. Joining forces can result in a more stable and profitable relationship with intermediary buyers and help producers get access to cheaper inputs by pooling their purchasing power and buying in bulk.
Business associations support members to develop their production and business activities, protect their interests and represent them. On the other hand, the cooperatives have a dual nature of being both associations and enterprises at the same time. For this program, the cooperative could be qualified as a lead firm if it has a solidly profitable business model and commercial license by being engaged regularly in buying/selling activities in the value chain.