This partnership supports dairy farmers to access finance to increase the productivity of their operations. The initiative aims to explore new markets where the i-SME platform can be used to help rural hard-to-reach customers access funds from banks; support dairy enterprises to expand their operations through access to low-cost financing from banks; enable dairy enterprises to capture better market access through increased volume and quality of milk production, thereby maximising income, and ensure access to clean and sustainable off-grid energy through the adoption of biodigesters.
Oxfam has formed dairy enterprises in Bangladesh involving over 4,000 dairy farmers, 80 per cent of whom are women. BSCL has developed the ‘i-SME platform’ to enable small businesses to access funds from financial institutions. By bringing these two streams of work together, Oxfam and BCSL support dairy enterprises to expand their operations through access to low cost financing from banks. This supports the dairy farmers to increase their milk production and in turn increase incomes.
Under this initiative BSCL agents are responsible for screening dairy enterprises, executing due diligence and monitoring credit extended through partner banks. Oxfam brings its knowledge and experience of the dairy sector to the partnership. It will also support market linkage efforts and the capacity building of the dairy enterprises. DFAT brings critical co-investment, as well as undertake high level advocacy to promote the objectives of the initiative and provide specific technical support including its expertise in development and shared value.
By linking their platform to the dairy enterprises formed by Oxfam, BSCL is able to reach a new market segment and offer services to hard-to-reach customers. This will generate revenue for BSCL through fees from participating banks. Banks benefit by growing their loan portfolios and associated revenue. Dairy enterprises benefit from access to financial services which provide an opportunity for business expansion. In turn, this will increase their market share and enabling the dairy enterprises to earn higher prices for their milk.
The initiative will also reduce electricity input costs for dairy enterprises that purchase and set up biodigesters, resulting in an environmental benefit through decreased greenhouse gas emissions.