input credit platform for small-holder farmers

Summary: Farmers across villages in Asia-Pacific experience constraints for quality inputs, credit to fund this and formal structures to grow this. Suppliers and lenders take on higher risk when providing these inputs; credit is harder to qualify, and villages located last-mile make this harder to process.

Problems for Farmers in Villages:
1. Lack of higher quality inputs
2. Lack of affordable credit to fund these inputs.
3. Farmers plan and farm together in villages, working in informal groups;
this makes it harder to bargain, grow and scale, with less structures.

Problems for Lenders and Input Suppliers:
1. Higher Risk; non-repayment is higher, when funds aren’t tied to farm inputs and used for land productivity.
2. Credit exists, but farmer/village record-keeping is weak making it harder to qualify, process and automate risk assessments.
3. Villages are located at last-mile; makes it more difficult for lenders and suppliers to process orders, and collect payment.

Summary: Tunyat provides remote farmers across villages in Asia-Pacific access to quality inputs and to agricultural and financial services, using hubs, village committees and digital platforms to connect this last-mile and to grow and sustain this agro-supply chain.

Solutions for Farmers in Villages:
1. Aggregation of inputs allows better quality with lower pricing.
2. Village Committees are formed, trained, to get the benefits of scale (collective-buying/selling/credit).
3. A Revolving Fund for each village, grows their credit amounts each season

Solutions for Suppliers and Lenders:
1. Village Committees select farmers who have good credit history, to de-risk repayment issues.
2. Farmers must use credit allocated to only order inputs / farm service; digital records qualify and trace these orders.
3. For repayment of credit, Village Committees take responsibility and guarantee for their farmer members, each season.

The target population are small-holder farmers (0-5 acres) who live in villages across SE-Asia and Pacific. To ensure financial inclusion, 30% of our farmer direct beneficiaries are women farmers.

The target population is broken down as follows:
1. 3M Villages globally
2. 450M Famers living in SE-Asia Pacific
3. $5.2T Unmet financing need for MSMEs globally
4. $2.4T Unmet financing need for MSMEs in Asia-Pacific

References:
1. Number of villages, globally: https://en.wikipedia.org/wiki/Village
2. Small-holder market size, SE Asia: https://www.alcimed.com/en/insights/empowering-smallholder-farmers-how-asian-countries-are-building-up-their-agriculture-backbones/
3. Global Credit Gap https://www.adb.org/sites/default/files/publication/774531/financing-smes-credit-guarantee-schemes.pdf
4. East Asia-Pacific Credit Gap: https://www.adb.org/sites/default/files/publication/774531/financing-smes-credit-guarantee-schemes.pdf

Total Lives Impacted?
1. # Farmer direct beneficiaries: 21,000
2. # Women Farmer direct beneficiaries: 6,300
3. # Indirect beneficiaries (farmer families): 105,000

Current impact metrics:
1. increase income rate: 10%
2. increase in agriculture productivity rate: 10-12%
3. increase in food security rate: 10%
4. current rate of women farmers in program (financial inclusion) rate: 30%

- We're looking for support from Solver to help us partner with Financial Experts with experience in financial modelling to train our finance / accounting staff in how to research, build and design financial models - for the equity and debt investors that we want to partner with.

- We're looking for support from Solver to help us partner with HR and organizational development specialists to help us design long-term HR rentention strategies, HR performance review plans, to ensure long-term staff rentention.

- We're looking for programmers / coders from the Solver network who can do code re-factoring and systems analysis work, for our inputs platform, to help optimize this, ensure it is secure, and can grow out.

- We're looking for CTO-type support/mentoring, for our ICT team to support them in this key role of the company.

- We're also looking for growth capital / donors / impact investors and foundations who're willing to partipcate in a conflict bond program design, and also bond specialists / who can help us structure and design this bond, for our farmers based in conflict-zone areas of myanmar. This bond would be offered to the village committees / farming clusters already in our program, and be used as vehicle to scale up and add more beneficiaries:

Additional Impact metrics:

Dry-zone Cluster: Magway - where we operate:
1. # Internally Displaced People (IDPs) in Dry-Zone where we operate: 235,000 IDP  vs. our customers who remain and farm (3500 farmers), 100% remain.
2.  #Non-Performing Loan Rate: 9.6% vs. our customers NPL Rate: 0%
3.  Magway State, Myanmar has 235,000 Internally Displaced Persons (IDPs) (8.4% of population):
- 7896 Returned IDPS
- # Farmers Engaged in TY Services in Magway:3500
 source: https://data.unhcr.org/en/country/mmr

Total Lives Impacted?
1. # Farmer direct beneficiaries: 21,000 (8400 in the platform)
2. # Women Farmer direct beneficiaries: 6,300
3. # Indirect beneficiaries (farmer families): 105,000

Current impact metrics:
1. increase income rate: 20%
2. increase in agriculture productivity rate: 10-12%
3. increase in food security rate: 10%
4. current rate of women farmers in program (financial inclusion) rate: 30%

Additional Impact metrics:
5. Dry-zone Cluster: # Internally Displaced People (IDPs) in Dry-Zone where we operate: 235,000 IDP  vs. our customers who remain and farm (3500 farmers), 100% remain.
6. #Non-Performing Loan Rate: 9.6% vs. our customers NPL Rate: 0%

How we calculate the metric?

1. increase in income = yield x selling price x total acres  - In some impact studies with our partners, if the farmer selects 1,2 o 3 farming services, the combined results can increase income as high as 20%

2. Agriculture productivity = total crop production / total land acres

3. food security increase = yield increase from last year to this year that is stored / then sold later ,note: storage usually for ~ 5 months

4. financial inclusion rate for women = avg total  women farmers / total beneficiaries  in project

5. Magway State, Myanmar: - 235,000 IDPs (8.4% of population) - 7896 Returned IDPS - # Farmers Engaged in TY Services in Magway: 3500       source: https://data.unhcr.org/en/country/mmr

6. Non-performing Loan Rate in Myanmar - 2023 NPL Rate: 16% - 2020 NPL Rate: 9.6% - 2019 NPL Rate: > 1% - 2018 NPL Rate: > 1% source: https://www.ada-microfinance.org

The technology adopts the following architecture /work-flow:

Team includes the following:

Hujjat Nadarajah, CEO: 18+ years in service delivery, logistics, science and tech and business development in emerging markets.  

Kyaw Wint Thu, COO: 10 years in Database Design, Project Management and Product Roll-outs in Singapore and Myanmar.

Sandar Min, Senior Finance Manager: 20 years in management accounting in Myanmar, India and Singapore. Staff of 70 people.

- Overall we have 52 full time staff, 20 contractor staff

- We have a Board of Directors / Impact investors that include: Proximity Designs (Jim Taylor), The Yield Lab (Claire Pribula), Uberis Capital (Sov Leang) and Kampani (Karina Uffert).

The company started in 2017. Now going in Year 7 of the business.

Application versions, have evolved each year. Latest version was developed in 2022, and has reached pre-MVP stage.

Village Development and Service hub business model, and proto-typing of service hubs started in 2018.This has now replicated to three service hub, and 100 Farmer Village Development Committees across three states of Myanmar.

- Tun Yat staff includes ethnic minorities including: Danu Ethnic minorities, tamil indians and rakhine.

- 30% of farmer beneficiaries are women farmers or women-led households

- 35% of staff and management team and the board are women.

1. 2023 Revenue (for all products and services) was USD 1,039,084.
2. 2023 Grant income was USD 646,284.

3. 2022 Revenue (for all products and services) was USD 325,628.
4. 2022 Grant Income was USD 335,428

5. Impact Investors / Equity Investment raised, 2017-23: $490,000
- equity investors: Proximity Designs, The Yield Lab, Uberis Capital, Kampani N.V

6. Impact Investors / Debt investment raised, 2017-2023: $300,000
- debt investors: Angel Protocol, Babyloan, Lend for Good, Daung Capital, HEKS-EPER

7. Grant Amounted Raised, from 2017-2023: USD 2.5M
- donors: UNOPS Lift Fund, UNCDF, USAID, ACDI-AVOCA, HEKS-EPER, CPI, Paungsie Facility, FHI 360, ADB, Grow Asia, Helvetas, Swiss Contact, ICCO

- Grants cover 30% of operational costs, and offset our field visits, farmer workshop and training costs.

- The company reached an EBITDA of +2% in 2023.