Rural Support Program for Economic Development

About the program
Country Dominican Republic
Classification Development of production chains
FNS Dimension Disponibilidad
Website http://digecoom.gob.do/
Objectives
  1. Promote and strengthen the capacities of men, women and youth beneficiaries and their organizations (community, territorial, economic and social) to ensure their active and effective participation in the implementation of project activities in order to improve their income levels and life quality and achieve sustainability of these actions;
  2. Help organizations of small and micro rural producers in order to establish consolidated trade relations and access to more dynamic markets and be inserted into value chains by improving and specializing their productive activities through strengthened and sustainable organizations; And
  3. Improve capitalization levels for organizations, small agricultural producers and rural microenterprises improving their risk profile, and facilitating sustainable access to financial markets.
Components and/or products

Strengthening human and organizational capital

The project undertakes a strengthening process whose central axes of focus are: a) the family as an economic entity and center for decisions in relation to productive strategies, b) organizations such as institutional and economic entities that facilitate value chain insertion and the possibility of undertaking added value activities.

The strategy for this component aims to generate a favorable context for development initiatives by strengthening capacity in the target population. This component aims to develop self-management skills to enable efficient and effective use of the goods and services offered by the project and to ensure the effective participation of the target population in all activities.

This component focuses on actions in four areas:

  1. Promotion and dissemination, which aims to disseminate the Project and the selection and training of promoters, facilitators and service providers for said Project.
  2. Human resources training, this ensures capacity building, especially for young people, women and “multipliers”.
  3. Capacity building for planning and identification of productive proposals and for social and economic development (business plans and for income generation).
  4. Training for economic, social and administrative management of organizations. The project provides assistance and training in a comprehensive and complementary manner to other existing programs that work in areas related to institutional management and the management of economic activities. The different organizational forms that already exist are strengthened; new ones are developed according to the priorities and needs identified through rapid diagnostics.

The expected results from the activities of this component are: strengthened organizations which are able to develop a preliminary business plan and / or development activities for youth, women and the poor that is prepared by organizations with support from Project staff. The result of expected impact achieved with this component is: the generation of human and social capabilities of people and consolidation of economic and social organizations.

Development of business opportunities

This component focuses on promoting insertion of organized small-scale, youth and women's groups in dynamic chains, in partnership with the private business sector (hotels, supermarkets marketers, processors and exporters). Training services and technical and business assistance aimed at generating capabilities for the insertion of small producers and their organizations in value chains in markets, in order to develop business opportunities and to support production.

The component implements a strategy for implementation divided into three stages:

  1. Identify opportunities and demand (market) and the explicit interest of other stakeholders in the value chain and balance between the priorities and focus of the project and priorities indicated by chain’s “organizers";
  2. Having a clear vision of potentialities, abilities and interest by producers in order to face this process; and
  3. With the collaboration of the chain’s “organizers” detect limitations faced by small farmers to implement the necessary actions to overcome these constraints.

The steps include actions regarding creating and strengthening partnerships between producers, companies and commercial actors, funding (co-funding) organizations of technical assistance services for the final design and detail of business plans, strengthening capacities for business groups and organizations for business management, market information and improved bargaining power.

Financing business and employment initiatives

This component deals with systemic contributions in order to lift restrictions that negatively affect the opportunity for the insertion of small producer’s organizations and limited access to credit, especially for financing in the medium and long term.

The project strategy is to: a) establish strategic alliances with some financial sector stakeholders showing interest in expanding the depth of its services to the target population of the project, i.e. small farmers and rural micro entrepreneurs inserted into value chains; b) creation of a capitalization fund  which is nonrefundable and helps those selected by the project to achieve a minimum level of basic capitalization that allows them to access credit and property and infrastructure to add value to their production achieving or strengthening organizations insertion into production chains.

Financial institutions can count on the support of the Project for the following: a) develop new financial products for a sector which already has plans to expand its presence; b) organizing and accompanying potential new customers in all aspects of their business (forming alliances, production, commercialization, etc.). The project can maximize the impact of their public resources ensuring the link between its users and the financial sector and the careful selection of business plans that respond exclusively to technical and financial criteria.

The financing strategy of business plans has therefore two sources of funding, an internal one to the project and an external one which is promoted and encouraged and coordinated by the Project: a) A Capitalization Fund (FOCAP) for transfers, as capitalization and direct contribution of the Project; b) credit resources provided by external partners to the project for the provision of credit for working capital, provided by International Financial Institutions (IFIs) or other actors in the chain (as a monetary advance payment of production or in kind).

This component focuses its actions on three main areas: Induction and training; technical assistance and partnerships with IFIs to co-finance innovation and development of rural financial services, and the Capitalization Fund (FOCAP).

FOCAP is the investment fund for the Project in order to contribute to the capitalization of organized small rural producers and micro entrepreneurs that have succeeded in formulating a business plan approved for the project and to promote and / or strengthen their integration into value chains that are pro-poor and strengthen their long-term relationship, both with the stakeholders in the chain, as the financial sector (banking).

The FOCAP provides partial funding for non-reimbursable financing to: a) individual investments on fixed assets (farm or micro) essential to meet business plans; b) the costs of capital goods for collective use necessary to add value to products or meet the quality requirements of the market; c) investment financing for micro enterprises and income-generating productive initiatives for youth and women. The investments co-financed with the FOCAP are capital investments.

Partial financing non-refundable grants are allocated only once to the same group of beneficiaries during the life of the project and also require a counterpart (assets and liabilities) from the group of producers or micro entrepreneurs. The Business Plan must quantify the equity provided by the group and the resources that will be purchased with credit resources from other funders (credit from financial institutions or suppliers or buyers).

Target population

The beneficiaries of the project are small poor and very poor producers, as well as the rural poor population in general, landless peasants, women, single mothers, female heads of families and young people and poor small business entrepreneurs in twenty provinces located in North, Central and East within the Dominican Republic.

Scope

Otro

20 provinces located in the North, Central and the Eastern part of the country.

Geographical coverage Rural
Responsible organism

Ministerio de Agricultura

Executing organism Dirección General de Cooperación Multilateral
Related institutions International Fund for Agricultural Development
Financial sources

International Fund for Agricultural Development

Government of the Dominican Republic