1. KRISHI UTSHO UPDATE
Working to address inefficiencies within the
dairy sector of Bangladesh

2. Strengthening the Dairy Value Chain
(SDVC)
• Project to address inefficiencies within the dairy market
• Women as a marginalized group
• Works with actors throughout the value chain
• Farmers
• Collectors
• Shop owners
• Processing plants
• Input Suppliers
• Long term economic growth without dependency

4. SDVC Impact
• 36,000 farmer members
• Over 150 agro input shops with nearly 40,000 clients per
month
• Higher quality of milk and increased consumption (178%)
• Production up from 1.2 to 1.8 liters/day
• Doubled the daily household milk sales

5. Krishi Utsho (Agro Source)
• For-profit Agro Input shop franchise for farmers
• Artificial insemination (AI), medicine, feed, and other agro
inputs
• 53 input shops- serving 20,000 farmers per month
• Rapid growth (35-113% per year)
• Expand to more than 250 shops in next few years

6. Scale Up Plan
1000
1000
900
800
800
Beneficiaries in thousand
700
600
600
500
500
400
400
400
300
300
250
300
200
200
150
150
200
125
100
100
75
70
50
50
100
37
25
25
25
25
25
20
20
18
15
15
15
15
15
15
15
15
12
10
10
10
8
5
5
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Year of Operation
Number of Shops Beneficiaries '000 Company Linkage Agro Processor

7. For-Profit Model
• Shop owner fees ($67- fee to join, $1.30- monthly fee)
• Commission from supplier partners (~5%)
• Break even in year 4

8. The Franchise Business Model
Franchisor (CARE)
Royalty fees/Franchise charge Business assessment to analyze
Company commission Negotiate contracts with suppliers
Design a respected brand
Conduct advertising for promotion
Training for expertise development
Continuous research and development
Franchisee (Shops)

9. The Supply Chain
• Partnerships with private sector suppliers to ensure
quality inputs and gain revenue
• 2 potential CARE roles:
• Central ordering supplier distribution, or
• Standard products, supplier ordering and distribution
• Cost effective
• Central ordering and supplier distribution more attractive
to private sector

10. Challenges Moving Forward
• Forming partnerships with private sector
• Branding shops
• Shop financing

11. Branding Benefits
• Standardized shops
• Reputation and recognition
• Easier to expand the number of shops
• Krishi Utsho is a symbol of quality

12. Branding Challenges
• Advertising campaign- how to reach customers and
establish brand image
• Promotions
• Building relationships among shop owners

13. Progress
• 20 franchisees AI training
• 15 shops branded and incorporated in network
• Positive response- farmers and shops

16. Private Sector Supplier Partnerships
• Top input suppliers in quality and quantity
• Commission
• Supplier goal and CARE goals differ
• Contracts for individual product
• CARE should consider fewer, larger partnerships- easier
to attract larger suppliers

17. Market Share by Medicine
16.00%
14.84%
company (53 shops)
14.00%
12.34%
12.00%
10.40%
9.82%
10.00%
8.00%
7.21%
6.03%
6.00%
4.77% 4.97%
4.51% 4.53%
4.01%
4.00%
2.77%
2.43% 2.37%
1.98%
2.00% 1.60% 1.67%
1.22% 1.40%
1.14%
0.00%

18. Market Share of Feed (By Company) 53 shops
40.00%
34.48% 34.28%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00% 8.61%
7.37%
5.00% 3.61% 2.61%
2.25% 2.41% 2.41%
0.64% 0.48% 0.16% 0.68%
0.00%

19. Partnership Progress
• Negotiations in progress
• A few agreements signed- e.g. Tamin Agro- feed
• Field assistant training
• Delays with eMIS system

20. Financing
• Number one concern of shop owners
• Shop owners want loans up to $1000 with 8% interest
• Why?
• No capital for inventory or physical improvements
• Loans too expensive (15-20% interest)
• Will spur high growth and expansion to other sectors
• One-stop shop

21. Problems Facing Financing
• Finding the capital
• Lack of collateral
• Preventing default
• Monitoring usage of capital
• Current cost of financing
• Regulations

22. Collateral Possibilities
• Use franchise membership
• CARE understands value of membership
• CARE guaranteeing a portion of the loan?
• Shop as potential collateral?

23. Potential Structural Options
• CARE managed loan system
• CARE financing operation
• Supplier credit system
• CARE partnership with lending organization

24. CARE Managed Loan System
• CARE runs loan organization using money from investors
or grants
• Large knowledge of shop economics
• Additional source of Krishi Utsho profit
• Increased control
• Higher interest rates
• Legally difficult
• No experience
• Least feasible

25. CARE financing
• Legally acceptable
• No profit to support network
• Less than 1% interest (service fee)
• No experience
• Funding from grants

26. Supplier Credit System
• No foreign capital
• Different credit duration based on item
• Need for collateral
• CARE guarantee?
• Cheap?
• Suppliers are less supportive
• What do they require?
• No capital for physical improvements

27. CARE Partnership with a Lending Org
• Partnership with Aunkul Foundation?
• Aunkul infrastructure
• CARE attracts capital- grants or investors
• Obtain a low interest rate (4%)
• CARE assist with info on shop performance- eMIS
• Most viable option
• Loans in tranches- must repay to get larger tranche

28. Financing Points to Consider
• Overhead cost of lending
• How to fully utilize CARE information
• Currency risk if foreign investors participate
• How to get the lowest interest rate?
• Size and duration of loan
• Group lending
• Expanding the loan pool

29. Recommendations
• Branding push
• Aggressive with supplier partnerships
• Central leader for Krishi Utsho
• Develop financing system
• Data organization and centralization

30. Thank You