Dalberg, Unilever and IDH agreed to make emerging entrepreneurs part of the supply chain of Unilever. Under this new partnership, the parties will directly build the capacity of agricultural small and medium-sized enterprises (SMEs) to meet the quality and volume requirements to be part of a modern supply chain. In turn, Unilever will offer a guaranteed offtake once quality standards are reached to underwrite that investment and collaborate closely to provide advice and support to help the SME become market ready.
This partnership will break the cycle where SMEs are unable to find the significant external finance needed to make the step change in quality and volumes required to join modern supply chains and hence remain excluded from the revenues they need to grow.
As individual supply contracts offered by companies such as Unilever cover only a small percentage of total output and carry a high risk in early years as volumes build, they cannot fund the full operational transformation and diversified income stream required for an SME to thrive but the SMEs, as small rural operations, struggle to engage with donors and finance institutions. The resulting combination of IDH and Dalberg funding and technical advice with a Unilever supply contract will help transform SMEs into long term sustainable operations supplying a far wider market, reaching 50000 farmers, with a focus on jobs for women and youth and creating decent working conditions.