"By 2015, it is estimated that the model would provide income opportunity for 12,000 underprivileged women, 800youths as service people, and 400 micro entrepreneurs as hub managers. "

Since setting up the pilot in 2004, the initiative has proven to be a financially self-sustainable project of CARE Bangladesh. Therefore the objective is now to transition RSP from an NGO managed program into a for-profit company 'Newco' with support from the Business Innovation Facility and Danone.

The main commercial driver for private sector companies offering their products through the RSP is the opportunity to expand their market coverage into otherwise unchartered rural areas and thus to increase profitability through increasing sales. Further commercial drivers for other involved stakeholders can be explained by taking a closer look at the RSP business model.

The RSP is a commission-based business model with brands paying commission at three levels according to the additional sales generated by the sales network.

Sales women (Aparajitas) get paid by commission on sale. Their initial stock purchase is financed by their own or family resources, or third party credit. As their basket of products grows they are able to reinvest in their trade and expand operation and earnings. Hubs get a commission to cover their costs and make a profit - Hubs are small enterprises trading at small town or large village level. They are already part of the distribution chain for the participating companies and sell the same branded products. As wholesaler to the sales women, each Hub employs two service agents to distribute products directly to the sales women houses in exchange for cash.

Newco will get a commission from the private sector for managing the whole network –identifying the hubs, selecting and training the sales women, and then supervising the network, stock levels, financial flows and coordination.

The RSP program helps to overcome some of the challenging obstacles to economic development in rural areas of Bangladesh, such as lack of market penetration, distorted informal markets that disadvantage the poor, and a lack of economic opportunities for those without land, many of whom are women. Rural producers often lack access to markets and information on market dynamics. The RSP/ Newco initiative in contrast will enhance the income generating capacity of rural women by creating opportunities for generating income at low risk. By year 2 it is expected that sales

women will be earning an average of BDT 1500 (approx $21) per month for 4 hours of work per day (i.e. further time available for alternate income opportunities). Past experience suggests such opportunities can further improve living conditions or social positions, such as through improved respect in the household, reduced violence, increased mobility, greater social interaction, and opportunity to forge relationships in the business environment. By year 3, it is estimated that the model would provide income opportunity for 12,000 underprivileged women, 400 youths as service people, and 400 micro entrepreneurs as hub managers.

At present, the RSP is managed by CARE Bangladesh. In order to set up an independent for-profit company ('Newco') to create a sustainable business model, CARE Bangladesh and Danone (as key investor) will receive support from the Business innovation Facility in managing the transition from an NGO to a for-profit model. This will include detailed business planning and support to manage the cultural organisational change required to launch Newco in a way that makes best use of RSP's social legacy but that also has clear private sector 'DNA'.

Success to date of RSP stems from its unusual mutually-beneficial combination of multiple 'brands' and the NGO care. This multi-brand and multi-product model has the following benefits compared to other more traditional distribution models:

• more cost-effective to set up and run than single company options;

• more attractive to customers who can get a wide variety of products form a single source;

• more attractive to the sales force, who can make frequent small FMCG sales to maintain a steady income and reduce stock value held, but also make larger higher value sales such as shoes to increase their income.

Potential to scale-up lies in the future expansion of the for-profit model that is being developed, plus RSP's other commercial opportunities, such as in developing rural marketing to and from farmers, and consulting services in rural marketing for other companies.