A NNUAL REPORT 2016 - LEAP201

ANNUAL REPORT 2016

2012 - 2014

ORGANIZATION GROWTH

PROGRAM

IMPACT

PROJECTPIPELINE

2015 - 2016

2017 - 2020

� Committed to lifting rural communities in Cambodia and Myanmar above the US$2-a-day poverty line.

� Promote sustainable agriculture projects and inclusive financial services to empower the rural poor.

� Venture philanthropic funding approach, providing our strategic partners hands on support, business advisory services, and access to growth networks.

We envision a Southeast Asia where every individual can live with dignity and freedom.

Our mission is to empower the poor to break out of the aid dependence and poverty cycle, and to lift themselves above the poverty line of US$2 per day.

� “Grants-Plus”.� Research & advocacy.

SustainableAgriculture

Technology &

Innovation

InclusiveFinancialServices

� Launched new “Social Loans-Plus” program.� Research & advocacy.

� Transition from “Grants-Plus” to “Social Loans-Plus” program.� Technology for scale.� Research, advocacy, and thought leadership.

� Sustainable agriculture initiatives.� Farm inputs and farm advisory.� Income generation.

� Agriculture value chain development approach.� Affordable agricultural loans through inclusive finance solutions.

� Financial inclusion through microsavings and microinsurance product innovation.� Agriculture value chain financing.� Mobile technology solutions.

� Target 60,000 cumulative Lives Impacted.

� Target 450,000 cumulative Lives Impacted.

� 7,500 cumulative Lives Impacted.

CONTENT

The LEAP201 Difference

Vision

MissionVision & Mission 2

Organization Growth 3

Letter from the Board Chairman 4

Board of Directors 6

Donor Circle 7

LEAP201 Program Partners 8

Agriculture Value Chain Approach 10

Stories from the Field 12

Financial Summary 21

Call to Action 22

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LETTER FROM THE BOARD CHAIRMAN

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The past financial year has been an incredibly exciting period for LEAP201. Over the course of the year, we established new partnerships with AMK Microfinance Institution and GRET Myanmar, while advancing engagements with our existing partners. A big thank you to our seed capital providers and donors – your contributions have been essential to the success of our initiatives.

WELCOMING OUR NEW BOARD MEMBERAs we grow our organization, we rely on the leadership of our dedicated Board members. This year, we are pleased to welcome En Lee on board. En’s extensive experience in impact investing and investment banking will be an asset to the organization as he lends his valuable insights to strengthen our program goals.

GROWING PARTNERSHIPSWe are delighted to announce our new partnership with GRET Myanmar, a reputable French NGO. We will be supporting their innovative Rice Bank Inventory Credit Scheme in the Ayeyarwady Delta region through a strategic impact grant. Through the Program, smallholder farmers can use paddy as collateral to access affordable loans, which are instrumental to financing agricultural inputs and investment in productive assets. GRET Myanmar also provides market facilitation, enabling farmers to access millers and traders who are willing to pay higher prices for their paddy, translating to higher income for farmers. Our support for GRET Myanmar has the potential to reach 1,700 Lives Impacted and deliver 4.5x rural income per dollar invested in the first year, which will compound over time.

LEAP201 also launched our new social loans program in 2015. This year, we provided our first loan to AMK Microfinance Institution, a leading MFI in Cambodia. AMK has demonstrated impact in providing affordable financial services to large numbers of rural poor, specifically seeking to help low-income rural farmers living below the poverty line. They provide small agricultural loans with an average size of US$350, which constitute 69% of all their loans. We foresee that this partnership will achieve 10,000 Lives Impacted and deliver 3.2x rural income per dollar invested.

LEVERAGING TECHNOLOGY FOR SCALABLE SOLUTIONSGoing forward, we are looking into novel and effective ways to scale impact. The high mobile penetration rate and increasing digitally-literate populations in Cambodia and Myanmar have pointed us towards financial technology and mobile applications for agriculture. Our preliminary forays into the field have highlighted the myriad of ways that farmers can benefit from mobile apps that provide market information and facilitation, farm advisory and access to credit. Technology’s potential to scale for impact also closely aligns with our mission to support sustainable and scalable pathways to increase rural income.

THANK YOULEAP201 set out with a noble purpose since its incorporation in 2012. The progress we have made towards achieving our mission of lifting people above the US$2-a-day poverty line is due in no small measure to the tireless contributions and unfaltering passion of our Board members, staff, and volunteers.

We are thankful for the learning experiences we have had in the past years, and are always seeking new avenues through which we can support our partners in Cambodia and Myanmar. Thank you for your continuous support and trust as we work towards realising our vision of a Southeast Asia where every individual can live with dignity and freedom.

It has been a privilege to be part of this journey with all of you, and I am excited to see what the next year holds.

Michael LienFounder & Board ChairmanLEAP201

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BOARD OF DIRECTORS

Michael LienBoard Chairman & Founder

Appointed 23.11.2012

James LohCo-Founder


Patrick LeeHon. Treasurer & Co-Founder


Till VestringGrants Committee Chairman


Chew Teck SoonAudit Committee Chairman


Elaine YewMember


Wee Sin ThoMember


Cheah Sui LingMember


En LeeMember


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DONOR CIRCLE THANK YOUWe are sincerely grateful for the generosity of our philanthropic donors whose investment, support and trust in our mission continues to motivate us in our work to empower rural communities to break free of the poverty cycle. Each of the stories and accomplishments highlighted in this report serve as a reminder of the power of philanthropy.

On behalf of our Board, staff and volunteers, LEAP201 thank you for the inspiration you bring to us and to the lives of thousands of rural farmers, for whom your contribution has enabled sustained and lasting change.

CORNERSTONE

FOUNDATION

ANGEL

INSPIRATION

$1MM AND ABOVE

$500K TO $999K

$250K TO $499K

$100K TO $249K

Far East Organization Michael Lien

Stephen Riady Foundation

Kewalram Chanrai Group

Dymon Asia Goh Yew Lin Hsieh Fu Hua Patrick Lee Lee Theng Kiat Leong Wah Kheong Loh Boon Chye James Loh

PARTNERLEAP201 is proud to partner with Newgate Communications, who has generously provided our organization with pro bono guidance and services for our communications and public relations strategies. We would like to thank Managing Partner, Terence Foo, and his highly skilled and professional team for their kind support and belief in our work and mission.

Photo Source: © Singapore Press Holdings Limited

Head Corporate and Institutional Banking, Standard Chartered

Bank Singapore

Founder & CEOJL Capital Pte Ltd

ChairmanWah Hin & Co Pte Ltd

Independent DirectorPartnerBain & Company, SE Asia

Managing PartnerEgon Zehnder, Singapore

Senior Advisor Office of the President,

National University of SingaporePartner, Head Asia Pacific

LGT Impact VenturesVenture Advisor

Wavemaker Partners

LEAP201 PROGRAM PARTNERS

MYANMARCAMBODIA

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WHEN

WHERE

WHY

WHAT

IMPACT

April 2016 – Present

Bogale Township, Ayeyarwady Delta, Myanmar

To provide access to affordable loans, quality storage facilities, linkage to markets, and increased income for smallholder farmers.

Strategic impact grant to support the expansion of GRET’s Rice Bank Inventory Credit Scheme through seed capital funding for the setup of 3 new Inventory Credit clusters in 2016-17 and to grow the 6 existing Inventory Credit clusters.

Potential to reach 1,700 Lives Impacted and deliver 4.5x rural income per dollar invested in the first year, with impact growing year on year.

RICE BANK INVENTORY CREDIT SCHEMEGRET MYANMAR

WHEN

WHERE

WHY

WHAT

IMPACT

2016 - 2017

Myanmar

To deliver low-cost agricultural tools, farm advisory services, and small loans to smallholder farmers.

Business advisory grant to support the design of an integrated go-to-market strategy to help consolidate and expand sales network.

The go-to-market solution is expected to have nationwide reach to rural populations through Proximity Designs existing network.

GO-TO-MARKET STRATEGYPROXIMITY DESIGNS MYANMAR

WHEN

WHERE

WHY

WHAT

IMPACT

February 2014 – Present

Takeo, Kandal, Prey Veng Provinces, Cambodia

To provide access to quality agricultural input and farm advisory services for smallholder farmers, and to promote income generation through a micro-franchise model.

Strategic impact grant to support business process re-engineering and the design and implementation of a management information system (MIS) to help coordinate inventory, logistics and purchasing.

The program has the potential to raise annual household income by 40% and our support has contributed to 12,000 cumulative Lives Impacted and delivered 11x rural income generated per dollar invested over 2 years.

FARM BUSINESS ADVISORYLORS THMEY – IDE CAMBODIA

WHEN

WHERE

WHY

WHAT

IMPACT

March 2016 – Present

Cambodia Provinces

To support inclusive financial services for the rural poor through making available low-cost financing as an alternative to high interest loans by informal moneylenders.

Social loan to support small agricultural loans that enable smallholder farmers to invest in agricultural input and equipment.

We foresee that this partnership will achieve 10,000 Lives Impacted and deliver 3.2x rural income per dollar invested.

AFFORDABLE AGRICULTURAL LOANS FOR SMALLHOLDERSAMK MICROFINANCE INSTITUTIONLEAP201 adopts a collaborative partnership approach with local partners in the field to address

the complex problems faced by rural farming communities in Cambodia and Myanmar. These are two of the poorest countries in Southeast Asia, with 40% of the population living on less than US$2-a-day. LEAP201 seeks out innovative and sustainable market-based solutions that integrate smallholder farmers into the agriculture value chain, unlocking access to agricultural inputs, inclusive financial services and higher value markets for their produce.

Population: 53.8 million1

Population: 15.5 million1

1The World Bank 2015

AgricultureInput

SmallholderProduction Processing Market

InputSuppliers

Inclusive FinanceProviders

Village LevelAggregators

Mid to LargeRice Millers

Local and ExportWholesalers

Quality Seeds& Fertilizer

Farm Machine& Equipment

AgricultureCooperatives

FarmerGroups

Post-HarvestTechnology

StorageFacilities

AffordableLoans

Micro-insurance

Accessto Input

Accessto Credit

Accessto Market

Support sustainable agriculture initiatives that provide access to low-cost quality farm inputs.

Invest in inclusive financial solutions to provide access to affordable loans and protection against downside risks.

Increase bargaining power through market facilitation and collective sale.

Build direct linkages to market to unlock higher value.

LEAP201 Program StrategyLeverage key impact pathways to integrate smallholder farmers directly into the agriculture value chain, enabling:

� Increased rural income through economic gains� Growth in savings and productive assets� Strengthening livelihood security� Sustainable and scalable impact

AGRICULTURE VALUE CHAINDEVELOPMENT APPROACH

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STORIES FROM THE FIELDIn Cambodia and Myanmar, 40% of the population live on less than US$2-a-day. Our team visited some of these families to learn more about their daily lives. What are some of the challenges faced by the rural poor and how do they manage them? What financial tools are available? How does one manage risk? We explore some of these questions in the following stories.

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Accessto Credit

GRET’SRICE BANKINVENTORYCREDITSCHEME

“My husband and I grow rice to support our four children. Every year, we borrow money from the money-lenders and pay 20% monthly interest so we can buy seed and fertiliser. The moneylenders always come right after harvest to ask for payment, so we have to sell our rice for very low prices.”

– Farmer Client, Daw Tin Yee

This is the plight of millions of smallholder farmers who depend on subsistence rice farming for their livelihood. The lack of access to affordable credit forces them into exploitative relationships with moneylenders. In addition, the lack of adequate post-harvest storage facilities and poor linkages to markets, further forces smallholder farmers to sell off their paddy almost immediately after harvest when prices are lowest. These pressures prevent farmers from being able to gain from the rise in market price that usually occur before the start of the next growing season.

SUSTAINABLE SOLUTION: RICE BANK INVENTORY CREDIT SCHEME

LEAP201 partners GRET Myanmar to support the Rice Bank Inventory Credit (Rice Bank IC) scheme in the Ayeyarwady Delta region. The Rice Bank IC scheme is a two pronged solution approach that enables smallholder farmers to access high quality storage warehouses where their paddy is stored as collateral for low-cost loans. The loans are repaid, along with interest and storage cost, 6 months after harvest, when the stored paddy is sold at a higher market price. Any profit gains are then shared with the farmer client. GRET’s market-based approach has led to better sales and higher income for the farmer clients.

The Rice Bank IC Scheme also emphasizes the importance of farmer self-reliance. As such, while GRET provides initial technical and financial assistance in setting up the Rice Bank IC scheme, and subsidizing the building of warehouses, the program encourages these farmer-led IC schemes to gradually grow their capital fund and become financially sustainable over time.

UNLOCKING VALUE, IMPACTING RURAL COMMUNITIES

LEAP201’s grants-plus support will go towards empowering over 300 farming households in the Rice Bank IC scheme across 9 clusters in Bogale township, and includes the investment in 3 new clusters in 2016-17. Through the scheme, smallholder farmers in these village clusters have reduced their reliance on moneylenders.

GRET’s role as a market facilitator is critical in connecting the farmer-led IC Committees to local rice millers and large traders, who commit to offtake the aggregated paddy through a fair price negotiation process. As a result, farmers are able to access higher value markets, unlocking the value of their crops.

For a rural farmer like Daw Tin Yee, affordable loans, quality storage, and collective paddy sale, can lead to lasting and transformative change. The higher income provides a means for her to invest in better farm inputs, which leads to better productivities and the start of a certain and self-reliant path out of poverty.

�

�

In less than a year, I earned enough to invest in new farming tools and

machines which have increased our productivity. In the past, I had to

borrow machines from other farmers, and so had to grow my paddy late,

and had poor harvest. With my own machines, I can grow my paddy on time.

My harvest is now very good.

- Farmer Client, Daw Tin Yee14 15

Creating Market Access for the Rural PoorFor rural farms located in villages dispersed along the river system, especially in the Ayeyarwady Delta region in Myanmar, getting to the market is only possible by navigating the waterways through small wooden boats. The ride could take from one to three hours. Even for farms with roads to the nearest market town, the route is long and arduous, and many who do not have transport travel by foot. Villagers trek 3km to the market on a dirt road with protruding stones.

The inaccessibility and high barriers to market have led to the proliferation of opportunistic middlemen who come to the farm gate at harvest time. They often dictate and offer low prices, which farmers have no choice but to accept as they have little leverage. From the middlemen, the produce transfers hands several more times as it moves through small traders at the town level, to wholesalers at the regional level, and eventually reaches the retail markets in the bigger towns and cities. Without direct access to markets, many smallholder farmers are unable to unlock the value of their crops and remain trapped within the cycle of poverty.

LEAP201 plans to work with local partners to support new market-led solutions that help integrate smallholder farmers into value chains. This could be through farmer-led initiatives focusing on collective sales, contract agreements guaranteeing a fair price, access to affordable credit, and even new mobile technologies providing real-time market price information and market facilitation services.

Market-based solutions have the potential to bring about income uplift for smallholder farmers as they share in the value created from improved access to markets. Further, strategies that enable farmer groups to aggregate sales and strengthen their collective bargaining power, puts them in a better position to enjoy economic gains.

�

�

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Till VestringBoard Member and Grants Committee Chairman

Accessto Market

PATHWAY OUTOF POVERTY:INCLUSIVEFINANCIALSOLUTIONS

Accessto Credit

In developing countries like Cambodia and Myanmar that have largely agrarian economies, 70% of the population practice subsistence rice farming on small plots of land that are less than 1 hectare.

Subsistence farmers have very little in terms of social protection or inclusive financial services to meet their needs. They have little access to affordable loans, few assets, low savings, and are at the mercy of health, social and economic risks, including accidents and illnesses, natural disasters, crop failure, and unemployment. These systemic shocks can result in a loss of 6 to 8 months of income for a household, pushing them further into poverty.

The microfinance phenomenon has made a big push for inclusive development, bringing much needed small loans, micro savings facility, and microinsurance products to the rural poor. Microsavings and microinsurance, in particular, benefit the poor by helping vulnerable populations to manage their risks and protect against indebtedness in times of crises. For a small and affordable premium, microinsurance products such as health and crop insurance can serve as a safety net by providing farmers a financial payout against shocks. This allows them to keep their productive assets, devote more resources to their farms, and strengthen and develop protective measures to safeguard their livelihoods.

LEAP201 believes in the long term benefits of inclusive financial strategies for smallholder farmers. There are, however, many challenges to overcome, including low financial literacy, high cost of distribution, lack of technology infrastructure, and capability gaps. This is a complex problem that requires strong collaboration through strategic partnerships between microfinance institutions, microinsurance providers, technology innovators, and social impact funders, to collectively catalyse, develop, and implement long lasting and sustainable solutions that provide access to finance and adequate insurance for the rural poor.

1918

Good governance is key to a strong and trustworthy organization. Leap201’s Directors are very focused on this, and are actively involved in promoting high standards of accountability and transparency across our programs and financial management

�

�

Patrick LeeCo-Founder & Honorary Treasurer

FINANCIAL SUMMARY

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STATEMENT OF COMPREHENSIVE INCOME

FY15/16 FY14/15

S$ S$ Income 2,010,000 1,503,635 Other operating income 423 13,346 Program expenses (191,018) (314,641) Administrative expenses (73,133) (85,933) Surplus from ordinary activities 1,746,272 1,116,407 Other comprehensive income - - Total comprehensive surplus for the period 1,746,272 1,116,407

BALANCE SHEET

FY15/16 FY14/15

S$ S$ NON-CURRENT ASSETS Property, plant and equipment 1,274 2,547 Financial assets, available for sale 2,021,090 2,012,777

2,022,364 2,015,324 CURRENT ASSETS Other receivables 3,303 5,331 Cash and cash equivalents 2,043,318 292,196

2,046,621 297,527 CURRENT LIABILITIES Amount payable to grantees 101,625 102,829 Payables 8,837 6,084 110,462 108,913

NET CURRENT ASSETS 1,936,159 188,614 NET ASSETS 3,958,523 2,203,938

ACCUMULATED RESERVE Accumulated surplus 3,948,555 2,202,283 Fair value reserve 9,968 1,655

3,958,523 2,203,938

RESERVES POLICY

The Board has agreed to set aside S$1 million of reserves to cover a minimum of two years of operating expenses.

Contact UsLeap Philanthropy Ltd. (UEN: 201228788H)Registered Address: 10 Anson Road,#27-08 International Plaza, Singapore 079903Email: [email protected]: www.leap201.org

Connect with UsFacebook: https://www.facebook.com/leap201Twitter: https://twitter.com/leap201

STAFFKaren Chua - Head of ProgramsAleithia Low - Summer Intern 2016Regina Ng - Summer Intern 2016

CORPORATE SERVICESAuditor Strategic Audit Alliance Pac,Appointed 23.02.2016Accountant PN Corporate Services Pte Ltd,Appointed 23.02.2016Secretary Strategic Alliance Corporate Services Pte Ltd, Appointed 01.01.2016

COUNTRY ADVISORMicaela Ratini CambodiaAppointed 15.05.2015

EXECUTIVE VOLUNTEERSJinwen ChenRadhika DhallKam Kah KenJenny LaiIvan LimPeggy LimJohannes LohPatsy MokShobha PunukolluTng Ying HuiRosa Wong

CALL TO ACTIONLEAP201’s team and supporters share one goal: to fight poverty with empowerment, and to help the poor to lift themselves above the US$2-a-day poverty line. With your help, we can make a bigger difference.

Volunteer with UsThe support of skilled volunteers and their dedication to our goals have helped LEAP201 to grow. We seek to work with passionate individuals who would like to be involved with our mission. For more information on volunteer positions, please visit our website and fill in the application form, and we will get in touch with you!

Partner with UsWe are interested in working with partner organizations that match our program criteria. We are seeking project proposals for innovative programs targeted at adding value to rural livelihoods in Cambodia or Myanmar. If you think your organization shares a similar mission and approach as LEAP201, we want to hear from you! For more information, please visit our website and pitch your project to us!

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A NNUAL REPORT 2016 - LEAP201

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