Bringing Prosperity to Rural Peru
Small business is thriving in rural Peru and Fortune 500 consultant and Yale graduate Amy Lin is part of this success story. Lin’s employer, TechnoServe, is an international non-profit dedicated to helping the rural poor succeed in the global economy by providing local entrepreneurs with technical advice and training. TechnoServe operates in Peru’s Cajamarca region under a contract awarded by the International Finance Corporation (IFC), a World Bank entity. TechnoServe’s micro-business clients supply locally-produced food to employees of the gold mine in Peru’s northern Cajamarca province.

Until last year, the international catering company Sodexho was the primary food supplier for the Minera Yanacocha* gold mines, Latin America’s largest gold producer. In 2002, at the request of the IFC, TechnoServe conducted an analysis that demonstrated how local, small-scale food producers could supplement Sodexho’s food supply in Yanacocha. The IFC is a shareholder in the Yanacocha mines, and sought TechnoServe’s rural development expertise because of the IFC’s mandate to promote sustainable private sector investments.

Local agricultural micro-businesses in Cajamarca learned how to improve their production methods not only in order to help supply Yanachoca employees, but also to begin selling in larger markets such as Lima, Peru’s capital city. This approach created new jobs in the region surrounding the gold mine by expanding these small businesses.

Lin joined TechnoServe’s Peru project in 2003 following a successful stint at The Boston Consulting Group. Lin is in charge of coaching nine Cajamarca micro-business owners as they process, market and sell food to Minera Yanachoca’s more than 4,000 employees. “These businesses do everything from collecting honey, raising turkeys, making jams and wines from native fruits, and producing cheese and milk,” says Lin. Her days consist of traveling by truck to her clients’ production sites. “We’re making the most of our office’s four-wheel-drive vehicle. Ascending beautiful mountains on rock-strewn roads, stopping occasionally for wayward sheep, bulls, donkeys, and of course dodging the ever ubiquitous dogs,” says Lin of her experience in Cajamarca.

TechnoServe is an international non-profit dedicated to helping the rural poor around the world succeed in the global economy by providing local entrepreneurs with technical advice and training.

Comparing Business Expectations in Cajamarca and the U.S.
Lin views differing expectations as the most striking discrepancy between the businesses she has worked with in New York and Cajamarca. U.S. companies expect formal procedures to govern transactions, whereas in Cajamarca, personal relationships and informal contacts are relied on to a much greater extent.

“One of the things I emphasized when I began working with my Peruvian clients was the need to establish credibility with customers and vendors,” Lin reports. “Business owners in Cajamarca place more importance on personal relationships than they do on specifying production terms, delivery procedures and registering with appropriate government agencies. There is a strong fear of doing business with strangers for fear of being cheated. The lack of formal business procedures greatly reduces the opportunity for local businesses to compete in a larger market like Lima where dealing with strangers is more routine as it is in large, American cities,” says Lin.

An Exceptional Entrepreneur
Peruvian business owner Lucelina del Rosario Terrones Silva is exceptionally receptive to Lin’s advice. Rosario owns and operates Ecoserranita, a business that purchases fruit from local farmers and makes it into jam, nectars and chocolate bonbons in Cajamarca. “She is committed to buying fruit locally,” says Lin. “Success to Rosario means not only making a profit, but also buying raw products from people in her community.”

Lin’s advice helped Rosario sell her wares to Lima retailers who are proud to showcase Peruvian-made products in the capital city. “The entire process taught me to be more flexible and creative,” Lin says. “We initially had a problem shipping jam orders to Lima via bus, because holiday overcrowding caused some of our shipments to be left at the bus depot. I worked at establishing a personal relationship with the local bus company manager. That ‘personalized’ it for him in a way that, as a Peruvian, he was more familiar and comfortable with. And our jam didn’t get left behind again.”

This is what micro business is about -- growing the pie for the benefit of the community, not just the individual business owner.

Rosario also inspired Lin during a routine meeting with TechnoServe’s approximately 20 Cajamarca clients, all of whom own and operate local food production businesses. “The impact of our work really sunk in when Rosario pointed out that if she doesn’t grow her business she has to turn local fruit producers away,” explains Lin. This is what micro business is about, growing the pie for the benefit of the community, not just the individual business owner.

TechnoServe’s Advice Pays Off for Mine Owners and Local Small Businesses
TechnoServe’s work supporting local Peruvian entrepreneurs has paid off for the Yanacocha mine’s management team and investors. In 2004, the Peru 2021 Association, an organization comprised of Peruvian industrialists and governmental actors, awarded Minera Yanacocha the social responsibility award for the development of local small and medium-size businesses in Cajamarca province.

The Yanacocha mine project is successful not only because it makes money for its investors and creates jobs for the mine employees, but also because it has drawn on the international expertise of TechnoServe to create a model of sustainable development. With a little outside coaching and the determination of Cajamarca’s entrepreneurs, the entire community will benefit from the initial foreign investment.

To make a donation directly to TechnoServe, please click here: Donate TechnoServe.

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*The IFC owns a 5% stake in the Minera Yanacocha gold mines, Latin America's largest gold producer. Minera Yanacocha’s other stakeholders include Denver-based Newmont Gold Co. (a 51% stakeholder) and Cia Minas de Buenaventura (44%).






Contributed by Amanda Howe, an attorney specializing in Comparative Intellecutal Property and Banking Law. Amanda works as a Legislative Analyst for National Write Your Congressman in Dallas, Texas.

To read another Global Envision success story, see The Profit of Creativity.