At NAJU we are boosting LATAM's small farmers' profits by providing them with P2P affordable loans and direct access to local consumers. We have collateralized direct sales to consumers.
Current Status
We conducted a 7-month successful pilot originating more than $28K, increased our farmers' margins by 500% and our consumers saved up 25%. Not only did we achieve PMF, we identified our scaling formula for growth, and in the last six weeks of our pilot, we skyrocketed from 24 customers to over 1,200. We lowered our CAC to under $1 and increased our customers' orders from $30 to $50. Our Church rate remained 9%.
Problem or Opportunity
40% of our food comes from small farmers in Latin America. They are going out of business for two reasons: 1) They have no access to affordable capital because they lack the collateral traditional lenders require. Approximately 9M farmers, at best, have access to loans with 25% interest, and the other +11M farmers are left at the mercy of unregulated micro-lenders who charge them up to 45% interest on their loans.
Secondly, with a cluttered supply chain, farmers have no direct access to consumers. We are paying higher prices and our farmers are making less.
Solution (product or service)
We're providing farmers with peer-to-peer affordable loans and direct access to local consumers. By enabling direct consumer access, we're effectively collateralizing the sales, solving the lack of traditional collateral. The data we collect allows us to confidently offer affordable loans with the assurance of repayment. A portion of each sale made to the consumer is automatically allocated towards the loan repayment.
Business model
We generate revenue in two ways: 1) To us a consumer is worth $4680/yr. We take a 30% commission, our farmers receive 60%, and our last-mile delivery partners receive 10%. 2) A farmer is worth 11,500/yrs (loan) from the 15% interest earned we take 390bps, the origination fund receives 405bps, and the note purchaser receives 705bps.
With approximately 1.95M farmers our loans can generate over $22B and $26B from our direct-to-consumer sales; potentially creating a revenue of close to $48B annually.
The link I am attaching is how we attract consumers - our farmer storytelling videos.
