Expansions and Renovations Increasing Services to Communities, Profits for Entrepreneurs in Rural Armenia
Participants in a Near East Foundation project in rural Armenia are flourishing with access to expanded modern services and new training opportunities.
In rural Armenia, access to IT services and amenities has been limited to only a few places. NEF is working with local entrepreneurs and partners to create sustainable businesses and training programs to help meet the growing demand and create new opportunities for rural Armenians.
In 2012 the opportunities have included driver’s education training, offered by project partners the Gegharkunik Chamber of Commerce and Industry and Zartnir franchised computer centers. As part of a pilot program, several centers installed “Practical Driving” simulator software on their computers to prepare participants to drive successfully and pass their driver’s license tests. For people who live in remote areas, obtaining a driver’s license is essential to having the mobility and capacity to obtain jobs at a non-walkable distance. In the future, trainings will be expanded to other computer centers within the Zartnir network.
In February of 2012 the Zartnir computer centers also succeeded in paying back the loans they received The Zartnir franchise of computer centers was launched in 2010 with support from the “Successful Start” Foundation, a program through the Gegharkunik Chamber. In February 2012, the centers successfully completed payback of the start-up loans they received. Now that the centers are established and independent, they are now able to offer new services to the community and update their businesses. These updates can have a significant effect on the influx of customers, and increase the computer center’s income.
In Noratus, for example, the computer center has been renovated to replicate European-style computer centers and better suit customer needs. Computers for internet use have been separated from computers used by children playing computer games. This has created a more suitable environment for each customer, and gives the center a more professional atmosphere.
The Vaghashen center is preparing to launch a new business venture – a 3D cinema. The franchise owner is collaborating with the Gegharkunik Chamber to create a business plan for the cinema, which will target a youth audience. Chamber leaders are supporting the business expansion and the center owner has received financing, in the amount of 350,000 Armenian Drams (just under $1,000), to buy a 3D projector. Currently, he is renovating a space to make it suitable for a cinema.
These expansions and computer center renovations aim to attract more customers and increase profits by increasing the variety and quality of services available to the community.
Rural livelihoods continue to improve in rural Armenia, where NEF’s project in support of entrepreneurs is helping to rebuild the economy, and break the cycle of unemployment and poverty.
In the first three months of 2012, a total of six entrepreneurs received funding for their business ventures. The entrepreneurs are from four rural villages in the regions of Artsakh/Nagorno-Karabakh, Gegharkunik, and Tavush.
Each of the businesses has a different focus. The range of enterprises includes a beekeeping venture, dried fruit production, a souvenir shop, a bakery, a sheep-breeding farm, and a vegetable greenhouse.
Since 2008, NEF has worked with local partners in rural Armenia to promote sustainable local economic development by strengthening economic sub-sectors (such as the ones supported in 2012) where rural areas have a competitive advantage. Our program helps at every stage of business development – from formulating a business plan to gaining access to micro-credit (capital) and providing ongoing mentoring and support services during the launch phase.
We thank you for your generous support, which is helping entrepreneurs build strong businesses and contribute to the revitalization of their communities!
In spite of huge leaps in IT infrastructure in Armenia, major segments of the population in rural villages lack ways to access technology and the knowledge to use it. These same communities are faced with youth unemployment often reaching 30 percent or more. A growing “digital divide” leaves rural communities and the poor unconnected to an economy and society increasingly based on information technology.
In Armenia, a government initiative aims for every family to own a computer, along with improvements in broadband capacity. However, no more that 10 percent of Armenian villagers has knowledge of computers or the Internet, a reality that prevents information dissemination in rural areas.
NEF and its partners, Business Pareta and the Gegharkunik Chamber of Commerce and Industry, have worked with local entrepreneurs to establish 15 rural IT centers under the Zartnir (Wake Up!) brand. The centers are creating jobs and new sources of income, serving as hubs for education and skills training, and providing access to technology.
Though modest in size – a start-up has 4 computer stations – these IT centers have quickly become vital parts of their communities. In the village of Noratus, for example, the IT center is full from morning to night in peak seasons, and the training sessions fill quickly – with 300 people trained in the first year. Some IT centers have begun providing training in advanced topics, including game programming, to youth who aspire to work in Armenia’s burgeoning programming industry.
Each IT center is located within a rural village, providing everyone in the community with convenient and affordable access to the Internet. The centers are locally owned and operated, fostering local entrepreneurship and trust among community members. Each month, centers provide a number of trainings in computer and program use for a fee and provide some targeted training for disadvantaged groups, such as women heads of households, on a pro bono basis – grassroots corporate social responsibility. Income is generated through computer sales and service, training, and computer/Internet access.
Microfranchises offer entrepreneurs with limited or no business experience a way to start a new business with relatively low risk. NEF and its partners provide entrepreneurs with business training, business planning, technology training, marketing, and quality control training. The trained entrepreneurs are connected with financing as needed, and credit/loans are used to acquire the necessary technology, equipment and raw material to start the business.
The IT centers have developed into successful businesses, generating revenue and creating jobs by offering internet access (internet café), training (in programming, software packages, internet use), and computer equipment sales. Each business creates at least 2 permanent jobs and generates an average of $600 dollars per month in profit in their first year – significant figures in the context of rural Armenia. Each center serves a population of approximately 200 people on a regular basis and offers four multi-week courses for basic computer literacy.
Strong micro-enterprise growth continues throughout rural Armenia, where NEF and its partners have helped 15 businesses bring economic development to their struggling communities.
In particular, project beneficiaries in the dried fruit and fish farming industries have made great progress.
Construction of a new dried fruit production facility has finished in the Ptghavan village of the Tavush region.
Franchisee and project participant Andranik Veranyan entered into an agreement with the Regional Employment Center of Tavush. With partial Center financing, eight people are now participating in training organized by Andranik to become workers in his dried fruit production business.
In August 2011, he produced his first batch, 5000 kilograms of dried peaches, using fresh peaches purchased from community farmers. During this process, Andranik developed key technological insights that will enable him to solve minor manufacturing glitches before the next production phase. He is planning to install a new $3,000 compartmentalized drying system, which will allow him to organize processing more effectively when there is less sunlight. Andranik’s business has grown to have fifteen employees. He has trained all of them personally.
The managers of “STAR” and “Fresh” supermarkets evaluated his product and rated the quality as excellent, which surpassed the expectations of the producer and resellers. A preliminary agreement has been signed between them to buy Andranik’s entire crop of dried peaches in November 2011.
The Rural Armenia Ministry of Finance approved Vahan Safaryan, the owner of a fish farming business, to develop and build new basins. This will allow for growth in his production to fulfill the expanding market demand. With the developments made possible through this project, Vahan has become the biggest supplier of fresh fish for shops and restaurants in the Gegharkunik region. This has also presented the opportunity for him to produce and provide other fish farming businesses in Armenia with small fish, helping to extend his growth and progress to other business owners.
For project resources, detailed progress reports, and photos visit www.ruralarmenia.com.
In the past several months, the project has focused on expanding the internet cafe franchise model created by our local partners. Having previously identified aspiring IT entrepreneurs in four rural communities--Gegharkunik, Lori, Shirak and Vayots Dzor--our project team provided them with start-up capital on loan and assistance with business plan design, resulting in the establishment of twenty new internet cafes and internet service centers.
In the next few months, our project team is working to develop a new business plan model for greenhouse vegetable and orchard farming enterprises, and to identify local entrepreneurs in these areas.
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