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Balancing social good and profitability

Social enterprise in Nicaragua

Francisco Espinoza has been growing plantains his entire life on his family’s farm in Rivas, Nicaragua. He volunteered to test the effectiveness of drip irrigation technology because he was afraid that increasing temperatures and drought conditions were negatively affecting his farm, and his future ability to provide for his family.

iDE Hero Nicaragua iDEal Way To Demonstrate Effectiveness

Plantain farmer Francisco Espinoza (left) and an iDEal staff member walk through Francisco’s plantain groves discussing strategies for making irrigation systems for plantain farmers even more efficient and effective. (Photo by Chris Nicoletti/iDE)

Selling irrigation systems is not a simple process; you don’t simply buy them off the shelf. Irrigation systems require proper design, good installation, and thorough operator training to make sure the water is delivered to crops in the most efficient way.

Francisco examines a plantain bunch. Better irrigation methods have produced not only better fruit but bigger fruit. (Photo by Chris Nicoletti/iDE)

Some of the world’s toughest customers are the poorest, because they are averse to taking risks. 

To build a business that sells micro-irrigation systems to poor farmers, therefore, is a challenge. That’s why iDE established iDEal Tecnologias in Nicaragua as a social enterprise, a business that realizes the bottom line is more than a dividend to shareholders, but an improvement in people’s lives. iDEal is unique in Nicaragua; no private company markets the same technologies to farmers. 

Working with typical farmers like Francisco, iDEal both demonstrates and promotes drip irrigation. iDEal installed the system and trained Francisco on maintaining it, checking back with him often to answer questions. Through controlled experiments like these, iDEal gathers data on how much plantain farmers can increase production with water-smart technology.

iDEal gathers data on how much increased production is possible for plantain farmers who implement water-smart technology. (Photo by Chris Nicoletti/iDE)

iDEal Tecnologias provides integrated services like irrigation systems and long-term farm consulting and problem solving to small- and medium-scale farmers in Nicaragua. Farmers travel over a day by bus to iDEal’s office for crop management support. They offer cows, chickens, eggs, and bicycles in exchange for drip irrigation systems. In order to reach more clients, iDEal is building a retail network that takes the technologies to the farmers and is looking to partner with microfinance institutions to enable farmers to purchase systems based on future income. 

The key to a successful social enterprise, dedicated to increasing farmers’ incomes, is post-sales services that continually check with the farmer to troubleshoot issues and ensure that the system is maintained correctly. Our retailers are farmers who have used our irrigation systems for years on their own farms. They all get intensive training and techniques to support farmers in their area.

iDEal Tecnologias is known in Nicaragua for providing affordable technologies and technical assistance. System sales cover a large portion of our fixed costs, and we expect to achieve a sustainable business in 2020. We are the only enterprise providing these services to small-scale farmers. So far, over 4,000 farmers have been convinced that our technologies and support help them to have a better life.

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The business of impact

Market engagement unleashes multi-faceted benefits.

iDE has been building markets for over 30 years. One thing we know for sure is that every market is different. Replication of what works in one context is not a guarantee of success in another. We replicate our approach, but each context dictates a unique solution.

Read more: Approaches in private sector engagement, market facilitation, value chain development, and social enterprise creation get results