Hi! Would you lend your money to a farmer in Myanmar?
"10 million farmers in Myanmar's rice region Ayarwaddy often lack capital to buy input products such as seeds, pesticides, and machinery. Input's necessary to continue and improve food production in Myanmar.
On top of that the region is struggling with a heavy rate of urbanisation: The youth is leaving the country side for a better perspective in Yangon. In order to compensate for this labor loss, farmers need to invest in machinery." Source
At the moment it is very difficult for the financial industry to provide loans and insurances to farmers.
It is unknown what specifc financial products farmers actually need
There is no data to develop credit risk assessment models to evaluate the risks of lending to farmers or groups of farmers. Therefore it's difficult to assess the exact product structure and pricing
Financial institutes deal with high transaction costs to provide loans and insurances to remote farmers
So what can mobile technology and geo-data offer to improve the situation for both farmers and financial institutions?
Access To Finance Program
We believe that our Golden Paddy platform can support the creation of a financial market for farmers:
The Golden Paddy app and website enables direct and low-cost access to farmers
The Golden Paddy platform collects real-time and extensive data
The Impact Terra team has significant knowledge about financial product creation, risk management and econometrics
Here is how we are planning to do that!
Step 1: connect to farmers
A group of farmers in Hopone Township uses our Golden Paddy Mobile Application daily. They register their crop and location, log their farming activities, and check market prices all the time.
Step 2: collect grass-roots and geo-data
We collect and structure the data from our Golden Paddy platform.
On top we add geo-data: a large amount of data collected by satellite images and translated into useful products and advice through big-data analysis and machine learning
Step 3: share data products
We can develop specific data products for Financial Institutions to build and calibrate their risk models and develop their products.
Step 4: offer loans/insurances to farmers
Financial institutions then use these credit risk assessment models to create financial products and assess pricing. Golden Paddy helps distribute these financial products by:
Educating farmers about the availability and use of loans and insurances
Displaying farmer specific quotations
Facilitating in-app and website disbursement and reimbursement transactions (in cooperation with the main mobile money providers)
Phase 5: get feedback and improve
Finally, with Golden Paddy's Survey functionality we can constantly ask farmers what they think about the financial products and the service from loan officers.
Is this really what they need?
Do they understand what is being offered, at what terms?
Do they use the service, and how are they using it?
Is the timing of repayments good?
With this feedback, financial institutions can optimize their financial products and marketing & sales.
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