Su’s love of other cultures started early. Growing up, Su attended an international school in Yangon, where her classmates…
Financial inclusion for rural entrepreneurs
so that farmers can invest in their future
We apply the same user-centered design methods that distinguish our irrigation and solar products to create innovative financial solutions for rural smallholders. Whether it’s credit to purchase one of our solar home systems or an affordable crop loan that will make a prosperous harvest possible, Proximity’s short-term financing enables rural families to boost productivity and incomes.
Extremely Affordable Financing
Even $9 for a solar light can be a prohibitive amount for our customers, many of them farmers who struggle to purchase the inputs they need to run successful businesses. Faced with limited microfinance and banking options, they’re often forced to take out high interest loans from informal moneylenders. Because adequate access to affordable credit can increase yields, improve livelihoods, and empower smallholder farmers to practice sustainable farming methods, we’ve created two Proximity lending operations to address the acute need for financing among Myanmar’s rural communities.
On one hand is Yetagon Credit, an in-house small-asset financing arm for our irrigation and energy products. After all, what good is a great product if people can’t afford it? At Proximity, we’ve discovered that to really have an impact, we must give people access, which is why we provide simple financing to help rural families purchase our affordable products. We provide two types of asset financing: one is a simple, five-month installment product loan; a second includes product financing, plus a modest amount of investment capital, so that farmers can purchase the pipes, seeds, or fertilizer they need to take full advantage of a new pump or drip irrigation system. Since 2007, we’ve financed 90,976 products, which in turn raise yearly incomes by an average of $250 each.
On the other hand, Proximity Finance provides growers with ongoing access to credit. Trapped in a cycle where low investment leads to low returns, well-structured financing can help farmers find a pathway out of poverty. With this in mind, Proximity Finance is re-thinking traditional microfinance models to fit Myanmar’s Dry Zone and Delta crop cycles. We disburse our $150 or $230 loans when farmers most need working capital, and we wait to collect the loan until after the harvest, when repayment doesn’t pose a financial burden for our customers. In 2013 alone, Proximity Finance disbursed loans to 23,000 smallholders. As of May 2014, that’s $5.5 million dollars we lend out to farmers each season, and the number is steadily growing. We’re providing direct to farmer lending and are working hard to expand our impact driven, rural-focused financial services to meet the needs of a hugely underserved market in Myanmar.
What distinguishes Yetagon Credit and Proximity Finance is that we design our financial services with an emphasis on customer input; only through a deep understanding of our customers, can we create tools of economic empowerment. To that end, we’re constantly learning more about local needs. For a glimpse at our latest research, take a look at our most recent collaboration with design firms frog and Studio D Radiodurans, which take an in-depth look at the spending and saving habits of Myanmar’s rural smallholders.
"I believe I used this loan wisely in investing the things most needed for my family business."
Pakkoku Kyun Village
"Enough credit and we're flying!"
"Without the loan option I would never have been able to buy the product that changed my life!"