Proximity Designs

In this intimate interview, the Founders of Proximity Designs, Debbie Aung Din and Jim Taylor, tell the story of how lessons on the ground in Myanmar are inspiring solutions for the future.

Social Investor: What was the inspiration behind Proximity Designs?

Debbie: A lot of our inspiration to found Proximity Designs came before we moved to Myanmar – we credit our time in Cambodia and in Mississippi for our desire to utilize a social enterprise model focused on agriculture.

People are often surprised to hear that we met in Mississippi working for the John M. Perkins Foundation. In Mississippi there was a movement to fight for civil rights and against poverty. Working for seven years with John Perkins, a social worker, we learned just how vital it is to have deep knowledge of the people you work with – the problems they face, but also the opportunities they have. There, we became committed to working and living with the community our work aims to serve – what we see as the power of proximity. That’s a lesson that has stayed with us ever since.

We learned a different lesson when we lived in Cambodia for four years just as the country was beginning to rebuild after the Khmer Rouge regime. At that time there were hundreds of organizations working along the Cambodian border but we were among only a handful working inside the country, through our work for the Mennonite Central Committee.

It was a time of sanctions and isolation, but also a time of real change. We wanted to contribute to that rebuilding and to the country’s opening up to the world. Development – right down to the local level, to the village, to the farmer – will always be tied to the health of the larger economy and the politics that make critical decisions about where the economy will grow. So in Cambodia we learned the real importance of working at the macro-level – the power of policy. That gave us the spark to go back to graduate school, to study public policy at the Harvard Kennedy School.

After that we did a stint in Indonesia as economic policy advisors – I worked for the Ministry of Finance and Jim worked as an advisor to the government. There, we learned yet another lesson while working on macro-level policy issues with the government; we saw that aid could never be the full solution to the problems the country faced. Aid just wasn’t agile enough or big enough. It was at this time that we saw the private sector was emerging as an important actor in development. We started to understand the importance of having a social enterprise model that takes the best of both the business and the social sectors.

After Indonesia we moved back to the US for Jim to attend business school, later working for five years for ag tech companies. Meanwhile, I started doing more and more work as an economist on projects in Myanmar. The work that I did in Myanmar planted the seed of the idea that Myanmar was a place where enormous impact could be made.

For one, the rural areas were often overlooked by aid, government, and the private sector. We also saw how much smallholder farmers were struggling to get by using antiquated technology and knowledge. More specifically we saw a demand for a simple treadle pump that was designed 20 years earlier but had never been introduced to Myanmar.

We took the lessons of proximity, policy, and the power of the social enterprise model that we learned from our time in Mississippi, Cambodia, and Indonesia, and our work in the private and public sectors, and we raised a US$ 10,000 grant from the British embassy to start selling those treadle pumps. Proximity Designs started from there.

The name Proximity is linked to the idea of how the organization works closely with the farmers that it aims to serve. Why is it important that you are close to the farmers?

Jim: Part of our origin story is that we met in the state of Mississippi after college. We mentioned John Perkins before and he was a real mentor to us. He had started a social enterprise that was built on the understanding that the complex problems of poverty couldn’t be solved from a distance, that having proximity with the people you work with fosters empathy and understanding, not sympathy. But he also showed us that empathy isn’t just about feeling good, it makes impact more effective.

This was underlined by our time in Cambodia and Indonesia. We also learned we wanted a different kind of relationship with people: one that is more customer-based, with an equal exchange, as opposed to a donor-recipient one. We still believe that being a social enterprise allows us to have this special relationship with the customers who we want to serve – the smallholder farmers of Myanmar.

Debbie Aung Din and Jim Taylor in their Yangon office where around 15% of the their 850 employees work. Proximity also has around 700 staff in its field offices.

What is Proximity Designs’ mission and how can serving farmers truly effect change in Myanmar?

Jim: Our mission hasn’t changed since the beginning of Proximity: we want to be a social enterprise that serves customers that are not served by private companies, NGOs, or the government. It has always been about poverty and increasing the incomes of families by helping them be more productive with simple products that target their needs. Agriculture is the biggest underserved market here, and yet, it has the potential for the most impact. Many countries, including China and Indonesia, have used agriculture as an engine for growth, proving that industrialization isn’t the only pathway out of poverty. Our mission is to reduce poverty in a country where 70% of the population derives their income from agriculture. This is simple math: changing the lives of smallholder farmers will change the whole country.

What were some of the key challenges you faced trying to get Proximity Designs off the ground?

Debbie: Working here in Myanmar – figuring out how to work with or next to the government and its policies – has been a big challenge for us. In the very beginning, there were strict US and EU sanctions, which meant that we had to be very careful to adhere to international standards and laws. Myanmar was also isolated, with poor infrastructure and an education system that didn’t stress critical thinking.

While people in other places were talking about implementing certain programs or technology within an open market system, we knew it would be difficult to apply in the Myanmar context. The openness Myanmar has today has helped Proximity make strides in its offerings to customers, but it wasn’t always this way.

As a social business, you aim to have deep sustainable impact at a large scale. Can you elaborate on the business model and why it works?

Jim: We believe that being a social enterprise opens up scale impact in a way that non-profits and businesses often don’t have. The root is the idea that being a for-profit company can limit your scale. If we were to use our irrigation products as a for-profit, it would be a very narrow set of customers that we would target, because very few would be able to afford them in their full pricing. Our model of mixing profit and subsidies allows us to serve customers that we would not be able to traditionally reach as a for-profit. Our work falls between a conventional business and an NGO, allowing us to do things on a large scale and to provoke changes on a macro, countrywide scale. We are sustainable through our blend of raised philanthropic capital and earned revenues. We also think that it has been very important to our scaling that we’re using both proximity and policy. Proximity Designs is known for being on the ground working with farmers, but through our research work, we’ve been able to work with country leadership. Partnering deep systemic work on the micro-level with macro-level policy means more sustainable changes for farmers’ lives.

Proximity Designs played a key role in terms of employing aid in the immediate aftermath of Cyclone Nargis. What was the impact of the work that you did?

Debbie: We had little background in emergency relief work, but the people most affected by Cyclone Nargis also happened to be the segment of people we serve: farmers. When Nargis struck on 1 May 2008, farmers who would normally be holding on to stocks of seed to be planted in the next two months had those stocks devastated. The disaster wiped out everything and people were at risk of losing an entire year’s worth of harvest, which would have knock-on effects for the millions of people who rely on the crops farmers grow.

Many relief agencies working in the area focused on health or shelter, but none of them had procurement systems that could tackle specific agricultural problems such as where to get seed or inputs or how to deal with pests and disease. There was no time for them to build up those systems because farming is a highly seasonal business: you don’t fix anything by getting seed halfway through a season.

We had the knowledge and the logistics, so we secured rice seeds from all over the country and distributed it by mid-July so farmers could plant on time. That experience reinforced one of the fundamental values of Proximity Designs: that regardless of circumstances, we want to treat people with respect and dignity. It showed in the way we delivered aid – these people were survivors, but we treated them with the same manner we would with our everyday customers. We weren’t just giving handouts to waiting hands, we were equipping farmers to keep their own livelihoods afloat in the wake of a natural disaster. Cyclone Nargis ended up having a big impact on the work Proximity Designs did going forward: it pushed us to further develop our advisory services and to identify future areas of need, such as pest and disease advice.

Unusually for a social enterprise, Proximity Designs is also involved in economic research for nation-building as you mentioned. How did this work come about? And how did you translate the research into policy change?

Debbie: Cyclone Nargis struck at the height of the military regime when the country was quite isolated due to international aid and trade sanctions. The cyclone cracked open humanitarian space, in which the international community could engage in Myanmar under these dire, emergency circumstances. Proximity had been working with farmers and rural delivery at the time and was well-positioned to respond to the emergency that primarily hit rice-farming families. As a result, we were able to deploy rural staff and international relief support fairly quickly. We became the largest provider of farm recovery support, working in 1,200 cyclone-affected villages and helping over two million people in the Delta over a three-year period. The government was very supportive and we were able to develop a level of trust with government departments that previously had not had significant partnerships with international organizations.

We developed a good relationship with the Ministry of Agriculture, and were able to conduct more in-depth economic research, to look at the broader economy – not only in the Delta where the cyclone hit, but in the larger rice-growing areas of the country. Our early research (in 2009-2010) on the agricultural economy highlighted the dire need for farm credit and provided leaders with a feedback loop or independent analysis of the country’s agricultural situation. Our research contributed to the government’s efforts to begin providing greater amounts of credit to farmers, both through the state agricultural bank and through private sector providers. Today, for example, farm lending has grown with the state Ag Bank having increased its loan amounts at least ten-fold to 1.5 million rice farmers.

During the time of Myanmar’s transition government, we were able to work closely with reform ministers and support them (at their request) with economic analysis on important nation-building issues including federalism, resource sharing, the exchange rate, energy, and telecommunications.

Can you talk about the opportunity you see in macro-level work in terms of impact and the way it differs from your social enterprise activities?

Debbie: It is important for leaders and decision-makers to have independent sources of information and analysis, as a feedback loop. We can leverage our social enterprise activities in rural villages and our deep knowledge of farm households and conditions across the country – to “ground truth” macroeconomic data and provide important, contextualized input and support to decision-makers. The macroeconomic analysis can be more informed, practical and nuanced by our social enterprise work in villages; similarly, millions of farm households across the country in turn can benefit from informed and better decisions made by policy makers.

The organization also thinks beyond its own products and services to making market-level impact. Tell us more about that.

Debbie: Besides our engagement with leaders and economic research/policy work behind the scenes, Proximity is working on systems change by helping shape or make a market.

One example is the agricultural financing industry. With about seven million smallholder farm households, the need for working capital for farming is huge in Myanmar – just with rice alone, it is about US$ 4bn a year that is needed. However, the state agriculture bank is not able to meet this finance need alone. MFIs do not focus on farmers – they focus on peri-urban areas and finance petty trade and small enterprises, as well as consumptions to smooth out the cash flow of poor households. Private banks focus on urban clients and have little interest, proximity, or knowledge to serve the finance needs of farmers.

As Proximity Finance, we also know we alone will not be able to meet the financing needs of Myanmar farmers. However, we can lead the way and be a “market maker” – by designing innovative financial services that fit farmers’ cash flow and needs, by showing that farm finance is commercially viable, impactful, and that farmers are entrepreneurial and are severely neglected by the finance industry. For example, we were the first to do an innovative back-to-back facility with a local bank, Yoma Bank – as a mechanism to receive foreign borrowing and hedge against a volatile local currency. Since then, Yoma Bank has done 14 other back-to-back loans with other MFIs. Now, other local banks are pursuing these partnerships. So we were able to pave the way.

In the small-scale irrigation market we have played a similar role. When we started, the treadle pump was a product that really clicked with the needs of the smallholder customer segment we aimed to serve. But customer needs changed and the market moved in to satisfy the demands we were meeting. We adapted our business to provide the next service or product farmers needed. Proximity has introduced innovative products in a market that did not exist for small farmers – products such as drip irrigation and sprinkler systems. Stimulating local demand for such products has meant more suppliers besides us have entered the small-scale irrigation market, giving farmers more choice and lower prices. We saw this as a huge success – we pointed out an unmet market and other players such as private business or the public sector also saw the opportunity and moved in to serve it.

What are some of your personal favorite case studies of farmers whose lives have been transformed as a result of the work of Proximity Designs?

Jim: We once demonstrated our treadle pump in a village, Shwe Byo, and a lot of people came to see how it worked. But there was one man in particular who spent a long time trying the pump and seemed very focused. The other villagers started pressing him to let them try as well, to which the man answered: “Don’t bother me, I’m dreaming.” We later interviewed him and learned that he was a rickshaw driver, which is a very low-income job. It was very touching when he told us he wanted to buy our treadle pump, because his dream was to be able to grow on his land and live off farming.

Another time, we met a man who used to climb toddy palm trees to make palm sugar – this too brought home very little income. One day, he fell and injured his back, rendering him unable to keep doing this work. His wife convinced him to invest in a treadle pump so that they could start growing and selling their own products, which also meant he wouldn’t need to carry heavy buckets on his back. When we interviewed him, he was happy to tell us that his income had increased, earning more than what he did before. But most of all, he recounted how earning so little before used to make him feel “like a nobody.” He explained how poverty had isolated him from his community, as he couldn’t afford to participate in the life of the village. He now feels respected as a member of society.

Both of those stories show that boosting income is important but it is not simply because it offers you material gain – income can turn dreams into a reality and allow one to feel like one can contribute to the community at large.

What inspires you to wake up each morning and continue to grow the business?

Jim: For us, the impact Proximity Designs can have on the life of a single farmer is moving and the ability to scale that to hundreds of thousands of farmers is what continues to inspire us each day.

On a more personal note, we’re really proud of the brilliant people who work for Proximity Designs and who have made it the special company it is.

We continue to strive to be a transparent and mission-driven organization that provides quality services and products. We want to be the kind of organization where people can come to work and know that they are contributing to something meaningful. That is something that we are very proud of.

Looking forward to the next five years, where do you see Proximity Designs?

Debbie: Hopefully in five years we’ll still be able to attract and retain a group of talented people dedicated to meeting the ever-evolving needs of farmers. If we are an organization that is still able to attract talented people who have a sense of the market and the risks necessary to achieve our goals, we will be able to figure out the rest.

From a Rickshaw to Self-Reliance

The Story of Han Lin Aun

Han Lin Aung started out in his 20s as a rickshaw driver. It was low-income work, never bringing in enough to support the family that he hoped to have one day.

His marriage in late-2006 was the catalyst that he needed to make a change. An entrepreneur by nature, Han Lin took a couple of big gambles.

First, he bought a plot of land, and planted it with orchid bulbs that he had bought from a farmer in a neighboring village. No one else in his village grew the crop, presenting Han Lin with a gap in the market that he felt was ready to be filled. Second, he invested in a treadle pump because he was convinced of its time-saving, yield-boosting potential. In doing so, he became one of Proximity’s very first customers.

His gambles paid off. Today, Han Lin is one of the most successful farmers in his village. He has expanded his business to growing and selling limes, and has invested the profits in a village shop that has become a center for trade and conversation. Han continues to dream big and shares his good fortune by allowing the other villagers to use his treadle pump as well.

Debbie Aung Din

Debbie Aung Din Taylor is the Co-Founder of Proximity Designs. Prior to her position, Debbie lived in post-war Cambodia for four years where she gained expertise on national rural development then later worked at USAID, Harvard Institute for International Development in Indonesia, UNDP and World Bank missions. Since 2004, Debbie co-founded Proximity Designs as a non-profit social business operating in Myanmar. Through her leadership, the business designs products and services to improve the productivity and income level of rural farm families. The company operates a product platform which includes a line of low-cost farm equipment, agronomic advice and farm financial services.

Jim Taylor

Jim Tailor is the Co-Founder and Chief Executive of Proximity Designs, Myanmar. Jim has an MPA from Harvard University and an MBA from the University of Southern California. He has over six years' supply chain distribution experience in the private sector in the US. In the mid-1980s, Jim managed post-war development assistance following the Khmer Rouge period in Cambodia. In the 1990s, he spent seven years as Resident Adviser to the Ministry of Planning in Indonesia.