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Asociacion Boliviana para el Desarrollo Rural, pro rural

ProRural was created by the program "No Gubernamental" (NOGUB) of COSUDE and operates at a national level in Bolivia. ProRural was founded in April 2000 by 5 Bolivian nationals. ProRural has obtained its legal status of the Government of Bolivia on December 22, 2000. It is a National Association with currently 9 individual members. There is a Board with 5 members, 2 of them are members of the Association and 3 non-members. By the end of 2009, ProRural has 13 paid staff members and 2 voluntary staff members.

The mission of ProRural is to promote the improvement of the quality of life of rural producers by facilitating processes of sustainable economic development that enable their inclusion through informed actors that operate in the value chain.

ProRural has over 25 years of experience (including the period as Program NOGUB) in support towards the productive sector of Bolivia in the value chains of quinoa, organic cocoa and others. ProRural has strong ties in the market, has created already diverse strong linkages with and among producer organizations (e.g. connection with AOPEB, representing 60.000 ecological producers) or (M)SMEs, and national networks.

ProRural has two different programs: financial and non-financial services. In both cases, services are only provided when the partner organization (i.e. producer organization or private SME) pays a fee for the services. Financing is not provided by loans but by venture capital. ProRural has developed a well functioning joint-venture program. It is an unique and innovative instrument in Latin America since it concerns a local investment fund rather than foreign capital, and it has adapted this product to small organizations. An additional benefit to local producers and entrepreneurs is that they do not only get access to finance, but also receive technical assistance.

Type of organisation	Service organization /non-profit
Sector	Financial Services
Country	Bolivia
Founded	2000
Hivos partner since	2009
Website	http://www.prorural.org.bo

Seed capital project pro-rural investment services 2010-2012

DAC-sectors:	Banking and financial services
Location:	Bolivia
Beneficiary:	small farmers, fishers, pastoralists, forest dwellers
activity	Investment in ecological processing and trading companies
Direct outreach	34 - Intermediary level
Indirect outreach	6200 - Beneficiaries: poor and/or marginalised women and men
activity	Organisational strengthening (seed capital package approach)
Direct outreach	118 - Intermediary level
Indirect outreach	21000 - Beneficiaries: poor and/or marginalised women and men
Contract total:	420.000
Contractperiod:	01-12-2009 until 31-12-2012

Description:
ProRural offers financial services to entrepreneurs or producer organizations in rural and urban areas that buy from organic producers. The services are flexible, adapted to the cash flow of the enterprise (related to the production cycle). Until now, the main experience is with joint venture ("Riesgo Compartido") product, for short term periods. A relatively new product is the 'start-up' product, this is a medium to long term investment for new businesses. Another product in development is a (long term) venture capital investment. The project has two general objectives: 1) Contribute to the financial selfsufficiency and improve operational capacity of ProRural to enable it to qualify itself for loans from local financial institutions and achieve market yields in its operations, that will consolidate the basis of the establishment of an innovating and sustainable Rural Investment Fund. 2) Support ecological producer organisations in their consolidation process towards viable inclusive and sustainable agro-enterprises, supporting the transformation into organic production and access to new markets. For the first objective Hivos' seed capital package policies for MFIs are applied, adapted to the particularities of a local investment fund for small enterprises, instead of microfinance institution. The project includes funding for institutional strengthening (technical assistance for selfregulation, external risk rating, MIS, staff training) and funding for investment capital. The investment capital is meant to increase scale and efficiency, necessary to become financially selfsufficient. The investment capital will be used for investments in green businesses by AOPEB member organizations. AOPEB is the Association of Ecological Producer Organisations in Bolivia (Hivos partner organization). The project focuses mainly on 2 investment products: - Start up: focusing at new businesses that require start-up investments (such as equipment and machinery) to upgrade processing of products, or diversify production lines and market outlets. All related to processing biological agriculture products. - Joint Venture ("Riesgo Compartido"): aiming to support businesses/organizations in stages of development, growth and/or expansion of businesses, that still lack the access to commercial loan of banks. In most cases ProRural provides working capital. In addition, the project aims to select a few best performing start-up businesses for a permanent partnership. In these cases ProRural will become shareholder in a permanent enterprise (equity capital). A project target has been set at 3 start-up investments that evolve into equity investments before the end of the project period. Currently, AOPEB has 69 members, including 46 producer organizations (31 associations and 15 cooperatives), 11 enterprises (SMEs) and 8 NGOs. The other 4 members are support organizations so they are no potential clients of the project. AOPEB members represent or buy products from 60.000 families (2 associations 50.000 families, 63 other organizations 10.000 families). The start-up product will be applied to 9 partner organizations (Hivos resources only), and the joint venture product to 25 organizations (as these resources are rotating the number of operations is higher). In total 34 partner organizations will benefit, representing approx. 6.200 families. These are considered indirect beneficiaries of the project. Total outreach of the investment services of ProRural will increase from 33 organizations in December 2008 to 118 organizations in December 2012 (reaching over 21.000 families).

Description:

ProRural offers financial services to entrepreneurs or producer organizations in rural and urban areas that buy from organic producers. The services are flexible, adapted to the cash flow of the enterprise (related to the production cycle). Until now, the main experience is with joint venture ("Riesgo Compartido") product, for short term periods. A relatively new product is the 'start-up' product, this is a medium to long term investment for new businesses. Another product in development is a (long term) venture capital investment.

The project has two general objectives:
1) Contribute to the financial selfsufficiency and improve operational capacity of ProRural to enable it to qualify itself for loans from local financial institutions and achieve market yields in its operations, that will consolidate the basis of the establishment of an innovating and sustainable Rural Investment Fund.
2) Support ecological producer organisations in their consolidation process towards viable inclusive and sustainable agro-enterprises, supporting the transformation into organic production and access to new markets.

For the first objective Hivos' seed capital package policies for MFIs are applied, adapted to the particularities of a local investment fund for small enterprises, instead of microfinance institution. The project includes funding for institutional strengthening (technical assistance for selfregulation, external risk rating, MIS, staff training) and funding for investment capital. The investment capital is meant to increase scale and efficiency, necessary to become financially selfsufficient.

The investment capital will be used for investments in green businesses by AOPEB member organizations. AOPEB is the Association of Ecological Producer Organisations in Bolivia (Hivos partner organization).

The project focuses mainly on 2 investment products:
- Start up: focusing at new businesses that require start-up investments (such as equipment and machinery) to upgrade processing of products, or diversify production lines and market outlets. All related to processing biological agriculture products.
- Joint Venture ("Riesgo Compartido"): aiming to support businesses/organizations in stages of development, growth and/or expansion of businesses, that still lack the access to commercial loan of banks. In most cases ProRural provides working capital.

In addition, the project aims to select a few best performing start-up businesses for a permanent partnership. In these cases ProRural will become shareholder in a permanent enterprise (equity capital). A project target has been set at 3 start-up investments that evolve into equity investments before the end of the project period.

Currently, AOPEB has 69 members, including 46 producer organizations (31 associations and 15 cooperatives), 11 enterprises (SMEs) and 8 NGOs. The other 4 members are support organizations so they are no potential clients of the project. AOPEB members represent or buy products from 60.000 families (2 associations 50.000 families, 63 other organizations 10.000 families).

The start-up product will be applied to 9 partner organizations (Hivos resources only), and the joint venture product to 25 organizations (as these resources are rotating the number of operations is higher). In total 34 partner organizations will benefit, representing approx. 6.200 families. These are considered indirect beneficiaries of the project.

Total outreach of the investment services of ProRural will increase from 33 organizations in December 2008 to 118 organizations in December 2012 (reaching over 21.000 families).

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