A Supply Chain Model For Dairy Farming & Health Care – Moksha-yug Access Ltd

Rural markets may be the next new thing for technology companies looking to expand their footprint in India but the missing link clearly is a channel that connects service providers to consumers in underserved markets. This is the gap that Moksha-Yug Access Ltd, or MYA, a Bangalore-based start-up, aims to bridge by using technology to link rural households with buyers and suppliers.”The cost of servicing rural markets is very high and I am a firm believer that technology
can help reduce the cost of servicing the rural poor,” says Harsha Moily, chief executive officer, MYA. The company raised Rs 6.9 crore in March from investors, including Silicon Valley-based venture capitalist Vinod Khosla and Unitus Equity Fund, which focuses on microfinance and social enterprise investing.”The equity investment will enable the company to build a supply chain and infrastructure
for dairy farming and health care centres, continue to create key market linkages between the rural community and upstream players, strengthen its technological platform to gear the business for volume-driven activities and expand MYA’s microfinance arm,” says Moily.The start-up began operations
in April 2006 by creating a microfinance network that has 37,000 members across rural Karnataka. This network is now the base for the roll-out of a supply chain model across two sectors-dairy farming
and health care. “MYA is a company which is riding on the India growth opportunity and not on the microfinance opportunity,” Moily says. The start-up aims to build a delivery system for the rural
poor across a gamut of services, including agribusiness and retail, in addition to the two sectors that MYA is already active in. It is a strategy that clearly finds favour with investors. “MYA’s business is not microfinance, yet it understands it well and views it as an organized platform, both in terms of manpower and infrastructure, which can be leveraged on to provide a range of other income-generating services,” says Johanna Posada, limited partner, Unitus Equity Fund (UEF) and managing director, Elevar Equity Llc., which manages UEF. Each dairy unit set up by MYA caters to 3,000 people, utilizes the services of 100 dairy farmers, and is run as a franchise unit by a microfinance client group. Each unit can generate 18,000 litres of milk every month, using an
average of 18 tonnes of animal feed concentrate and 20 acres for cultivating green fodder. MYA works towards building partnerships to procure the milch animals, provides the inputs and finally arranges for purchasing the milk produced. “Once our last mile supply chain management services is in place, we plan to enter into partnerships with companies in the dairy farming sector,” says Moily. Five such dairy farming franchises have already been set up in Bagalkot district in north Karnataka. In the health care sector, MYA is setting up primary health centres-each one caters to a population of 30,000 and offers basic medical services such as outpatient care, laboratory and diagnostic facilities and a pharmacy. “The next step will be to build alliances with companies that can set up tertiary care hospitals where primary health clinics can refer their patients to,” says Moily. One such health care franchise is already operational in Bagalkot. “Availability of quality manpower
is the only challenge we face in a business focused on rural markets,” says Moily, who struggles to find talented people ready to work in rural India. To bridge that gap, MYA plans to hire domain experts as consultants for short-term projects while working on a long-term plan that involves
building partnerships with educational institutions and offering employees a stock option plan.
“We aim to set up a non-profit foundation that will establish high schools in rural areas that can provide a stable source of quality field staff for our operations,”says Moily, adding that rural India is a vibrant marketwaiting to be tapped. It is this promise of growth that is encouraging investors such as UEF. “In addition to the growth we are seeing in the Indian urban markets, it is estimated that the annual growth rate in real income for an average rural household will increase from 2.8% to 3.6% in only two years. To capitalize on this growth is an attractive opportunity”, says Posada, who expects MYA to launch at least two new products and services in the next three years
that will be both large-scaleand profitable.