Agricultural Value Chains Digitization

Boresha is on a mission to put an end to the financial stress and instability that is plaguing agri-value chains across developing economies while making it easy for farmers to spend and invest their money. Our vision is to build a financial system that connects farmers to a new generation of financial products, starting with last-mile digitization of agricultural value chains in Africa.

Boresha is a B2B2C fintech platform that simplifies procurement from smallholder farmers, who produce 70% of Africa’s food. Our offline-enabled platform allows agribusinesses (also called agri-buyers) to streamline purchasing, payments, and pre-financing to thousands of farmers at a time. We help agribusinesses to know who their farmers are, and do business with them digitally. We leverage our relationship with agribusinesses to bring new financial products to millions of smallholder farmers, drive financial inclusion in under-served rural areas and give farmers access to critical information on sustainable farming.

Smallholder farmers are the most vulnerable to shocks like pandemics and climate change. Moreover, worldwide, 500 million smallholder farmers struggle to access basic financial services and are stuck in a cycle of poverty. This stymies their ability to invest in their farm, boost their productivity, increase their resilience, shift towards sustainable farming practices, and contribute to food security.

The demand for farm credit in Sub-Saharan Africa is $42 billion per annum, with only $6 billion being met by financial institutions. Providing financial services to smallholder farmers is perceived as high risk and costly due to their lack of collateral and fragmentation. 

To compensate for the shortfall, smallholder farmers rely on costly and often predatory informal channels such as village lenders and informal traders This causes significant disruption across the value chain as they are often forced to side-sell, under-invest, or liquidate productive assets. 

For smallholder farmers, getting financing from their agri-buyer, whether it’s a cooperative, or processor, is their preferred option but those buyers often don’t have the resources or internal systems to meet their needs. By strengthening agri-buyers with our platform, we hope to help farmers move away from informal channels and close the rural financing gap.

Our platform digitizes field operations for agribusinesses, and unlocks financial services for their farmers. We use an innovative B2B2C business model. We provide enterprise software to agribusinesses, who enroll thousands of smallholder farmers for our direct-to-consumer offerings.

Our platform uses uniquely non-internet protocols. This means that users can check farmer records and make payments without 3G or 4G internet, which is only available to 15% of communities in Africa.

Our solution allows large agribusinesses to digitize every aspect of purchasing goods from smallholder farmers. These buyers use our mobile platform in the field to register, pre-finance, and pay farmers in rural areas. We create significant savings, transparency, and efficiency for these agribusiness clients as we support their transition away from paper and cash. 

As we digitize farmer income, we build a standard financial profile that allows farmers to access financial services from local banks and microfinance institutions. Once registered, farmers can access income advances, savings schemes, and other products directly with an ordinary mobile phone. We integrate with local vendors so that farmers can also instruct us to pay their bills on payday: school fees, utility payments, asset financing, and more. We make digital commerce an easy step for farmers.

Our platform is targeted at agribusinesses that have not been able to successfully implement IT solutions in their field operations, even if they already use an ERP or accounting software for head office. The majority of agribusinesses across Africa are still using paper and cash in their farmer-facing operations.

Smallholder farmers who supply to our agribusiness clients are typically small, suffer from inconsistent cash flows, and do not easily have access to the formal financial sector. We estimate that 95% of our client’s smallholder farmers are low-income. While they can fulfill their daily needs, they often need cash smoothing from their agri-buyer in the form of income advances and input loans to weather day-to-day volatility and invest in their farm. 

The values of fairness, inclusion and humility are what define our ethos and drive how we approach customers and partners. We are a farmer-centric organization and our products are built with a focus on the realities of the rural areas where we operate. Our platform has been co-designed with partner agribusinesses and we have already piloted a few product iterations with them. Our team combines over 20 years of experience working with smallholder farmers and agribusinesses in East Africa.

By digitizing their income and thereby building their financial profile, we support small-scale producers to access capital from their agribusinesses and financial institutions. Through cash advances and deduction schemes on our platform, we provide smallholder farmers credit to access inputs from local vendors. In addition, our platform enables bulk SMS messaging to farmers to disseminate information on crop productivity and sustainable farming practices. With access to affordable capital and knowledge, smallholder farmers are in a better position to invest in their farm and adopt regenerative farming.

Our go-to-market strategy is the most scalable and financially sustainable way to have an impact on farmers. We work through the agribusinesses that buy from them. Competitors try to approach farmers directly, but extreme fragmentation and costly unit economics make it difficult to serve them. By integrating with existing value chains and relationships, we short-circuit the process of bringing smallholder farmers into the digital age.

Agribusinesses approach new technologies with a skeptical eye. When they try software from mature markets for last-mile digitization, it often fails due to unreliable rural networks and a lack of skilled labour. They love that our platform feels simple and familiar. Our solution leverages basic mobile devices, offline capabilities to bring a smooth and reliable experience that fits any agribusiness’ existing processes in the field. We easily integrate with existing ERP and accounting platforms, so agri-buyers can continue using whichever system they want in head-office.

Most digitization initiatives fail because they take a top-down approach and overlook unique constraints and dynamics in rural operations. Platforms are launched with excitement but long-term adoption is rare. We differ by meeting all stakeholders where they are at in terms of digital literacy and capabilities. We build around local dynamics and nuances as opposed to going against them. Finally, we focus on creating value for farmers and field staff first as they are the critical drivers of adoption, while others focus primarily on pleasing management staff.

Our product is a farmer management platform that supports agri-buyers with digitizing their field-level operations and transactions with farmers. The platform includes mobile tools for field agents, business intelligence features for managers leveraging data science for credit scoring, and financial inclusion features for farmers.

Our product is not dependent on 3G/4G connectivity, and works on any mobile phone - even if it isn’t a smartphone. Our agribusiness users can do business digitally with their farmers in a rural, low-network environment. We tap into the phone’s SIM card to send payment instructions or data entries to cell towers, which are then routed to our servers on the cloud. In short, a digital payment can be executed without access to the internet. The platform is already integrated with payments and mobile network providers in 16 African countries, and can be customised for most any agricultural value chain. Other competing products require Android apps and typically cannot sync with the cloud until they return to WiFi or a strong network.

Our technology is field tested and well-adapted to rural environments. Integration is seamless as we work within the existing ERP and Accounting systems. This is a key selling point for agri-buyers, who typically do not want to migrate from their existing core business software. In addition, we leverage interfaces that are familiar to field teams such as USSD, Whatsapp and Excel. Integration at all levels of the chain is seamless. Our platform requires no new devices and minimal training for field staff.

Boresha uses only basic, widely available technologies, as mentioned above. Mobile phone (smartphones AND non-smartphones) penetration in Sub-Saharan Africa is extremely high. Success of M-PESA in Kenya and other digital money initiatives across the region illustrate the success of digital payments through USSD mobile interfaces, the core technology of our solution.

For a product demo, please visit our website www.boresha.tech.

Our theory of change relies on the premise that by strengthening agribusinesses that buy from a large network of smallholder farmers, we are able to unlock significant benefits for their smallholder farmers. Agribusinesses already offer a wide range of services to their farmers. Those include training, cash and in-kind advances, financial services and so-on. We help those buyers scale their initiatives by reducing the inefficiencies in their operations and by giving them new visibility in their business. 

It is with that in mind that we offer turn-key services that help agri-buyers manage their supplier network and boost farmer loyalty and productivity. We are on a mission to make farmers more resilient and prosperous by equipping their buyers with the right tools to support them effectively.  

Our platform enables buyers to reach new levels of transparency, visibility and accountability while delighting their farmers. We help them access real-time production records across the value chain, improve farmer traceability, manage farmer payment reconciliation and transition to digital payments. In light of COVID, we also help them reach farmers and disseminate valuable information through our bulk SMS capabilities.

By targeting agribusinesses with this intervention, we expect those benefits to trickle down to their farmers who will be able to access new financial services and information, receive their income digitally and move away from costly informal lenders. Over time, by bringing 3rd party vendors on the platform, we hope to unlock new opportunities and help farmers access yield enhancing products and services.

Through our pilot in the Ugandan dairy sector, where we helped 8 small and medium cooperatives to digitize their farmer advance processes, we were able to see first-hand the benefits our platform creates for both farmers and agribusinesses. Many of the farmers who received advances through our platform were able to invest in their farm or cover emergencies. From their testimonies, they would not have been able to access the funds anywhere else except for village lenders. For agribusinesses, we helped reduce the time and costs of handling many ad-hoc requests while ensuring proper accountability.

Since launch, we have helped 8 agribusinesses to implement digitization in a network of over 2,000 farmers delivering $2 Million of produce per year. Our platform has made it possible for ~200 farms to access working capital through their mobile phone, and we have delivered ~$30,000 of such financing to these farmers with 100% repayment rate maintained during the entire period despite COVID-19. This has significantly increased farmer loyalty and retention, while preventing farmers from going to loan sharks or selling dairy cows.

As our new clients implement this platform in mid 2020, we will significantly increase the reach of our impact to smallholder farmers. As we create standardised financial profiles for close to 100,000 farms, we expect to connect at least 5,000 of them to affordable financial services by the end of the year 2020. 

Moreover, we are currently launching a pilot with the largest cocoa exporter in Uganda, collectively buying from 75,000 smallholder farmers. It is worth noting that we have a robust pipeline of other larger agri-buyers which we intend to work with in the near future.

Within the next year, we expect to have around 300,000 farmers registered on the platform. Within the next 5 years, we hope to reach upward of 2,000,000 farmers.

Our model scales quickly through our B2B services for large agribusinesses. Our first client in cocoa sources from ~75,000 farmers. We generate recurring software subscription fees, and charge a small fee on every digital transaction that occurs. Our unit economics are strong, from software subscriptions and transaction fees. We leverage novel cloud infrastructure to make our platform scalable and to significantly reduce our staffing needs and burn rate. This combination of low overheads and high-margin pricing gives us a clear pathway to sustainability.

We can achieve financial viability with 25 large agribusiness clients, which we are projected to reach by the end of 2021. This represents a network of 500,000 farmers and upwards of $20 Million in annual digital farm payments. On top of this basic service, we can also earn commissions on insurance, credit, and other products that are delivered to farmers on top of our infrastructure.

Once we’ve connected millions of African farmers to the digital economy, we intend to increase the range of products and services available in our marketplace. Our dream is to make it much easier for farmers to chart a path to higher income, greater financial stability, and a prosperous future. We have already started building a network of 3rd party vendors, providing anything from water filters to insurance products, so that farmers can access all of the ‘essentials’ through our exclusive rural distribution channel.

Partnerships and access: To be successful with our B2B-led strategy, we need access to networks and key decision makers at the various agribusinesses we are targeting. This is especially important in agriculture where agribusinesses are often difficult to reach. 

Agri-buyer education: Agribusinesses have varying appetites for adopting technology. This is often based on their level of sophistication and previous stigmas coming from failing to implement digital solutions. While they see the benefits of digitizing their last-mile, they often need some hand holding and education. As a result, we need to dedicate resources from the get-go at building relationships with buyers and guiding them through their digitization journey. 

Funding: We are currently running a lean team focused on achieving product market fit with our first customers. As we grow, we expect to need more resources to meet our ambitious objectives.

Partnership and access: We are building partnerships with enabling organizations such as NGOs and industry associations to gain access to agribusinesses and their farmers. Those organizations have seen the problem we are trying to solve directly and they are more often than not willing to introduce us to the right businesses. 

Buyer education: We have positioned ourselves as the digitization partner for our agri-buyer clients. Buyers can adopt our platform through a series of low-risk pilots. We work with them to test and incorporate their feedback along the way. We also offer them flexibility to customize the platform to their needs. 

Funding: We are currently laser focused on building relevant traction with our clients. Once we can prove to investors that we have reached product market fit at scale, we will be in a good position to raise funding.

We have on our team 4 full-time staff.

Our team has the right combination of technical expertise and in-country experience for this project to succeed. James Thorogood and Alexandre Tremblay Ponton, the two co-founders of Boresha, have been working together since 2016. Alex has 5 years of experience building and operating businesses in Africa. Alex is a finance professional who started with Canada Pension Plan, then spent 4 years building an agri-investment portfolio in Uganda. He has extensive experience with agri-buyer operations, financing, and farmer financial inclusion. James is an engineer and data scientist that has been building platforms and engagement strategies for smallholder farmers since 2016, both in Kenya and Uganda. He holds an MSc in Data Science and an MSc in Water Science, Policy, and Management from Oxford as a Rhodes Scholar. He leads Boresha’s product development team.

In addition to our founding team, Andrew Mamawi, our full-stack developer, provides the necessary technical skills and to handle core product development responsibilities. Joseph Kajero, our value-chain manager, has leveraged his 15 years of experience in agribusiness management to sharpen our go-to-market strategy. He has directly contributed to the development of 50 cooperatives in East Africa giving us clear insights into the local dynamics and the particularities of agri-buyers.

We see agri-buyers as partners and treat them as such. While we deliver new services to their farmers, they remain in the driver seat throughout the process. We also partner with Agova for our planned expansion to Zambia. Agova is a Zambian impact-driven consultancy. Agova’s work with companies such as Syngenta, LaFarge and First Quantum Mine and a range of Zambian SMEs has resulted in reaching over 100,000 low-income customers with commercially viable services and products that improve their livelihoods.

Customer segment:

We work with both agri-buyers and smallholder farmers. By taking a modular approach, we are able to implement our platform with both small and large agri-buyers. They could be farmer groups, cooperatives, processors or exporters. 

Our target farmers are small-scale and have an existing relationship with an agri-buyer. We estimate that 95% of them are in the low-income bracket. 

Value proposition:

Our platform enables agri-buyers to simplify procurement from smallholder farmers, while boosting farmer loyalty with streamlined pre-financing and payment schemes. Using our offline-enabled product, field staff for agri-buyers can register, verify, pre-finance, and pay farmers instantly, without an internet connection. Agri-buyers can access this data from head office with management dashboards adapted to their value chain. With timely data, agri-buyers can make better decisions, identify trends and reduce operational costs. This frees up resources they can re-invest in supporting their farmers. 

Revenue and costs:

Our business model is based on agri-buyers paying a recurring subscription fee to access our platform, as well as transaction fees for digital payments and pre-financing. Our main costs are transaction fees & SMS for mobile money, subscriptions and headcount. 

Channels:

To date, we have reached most of our customers through referrals from other satisfied customers. We want to leverage word-of-mouth as much as possible at this stage. In addition, we take a top-down approach working with enabling organizations like NGOs and Industry Associations to reach agribusinesses. Finally, we have boots on the ground and implementation partners to help us scale our reach.

Our model is based on the power of partnerships and alliances. Our path to scale depends on getting more exposure and opportunities to collaborate with multinationals and large-scale agribusinesses who have smallholders in their supply chains for us to digitize their last mile operations. The rich network that MIT/SOLVE would provide us with through this program is absolutely invaluable. In addition, the program represents a unique opportunity to connect and join forces with other impact-driven social innovators to make our world a better place for smallholder farmers.

We believe SOLVE represents a unique opportunity to get in touch with, learn from, and collaborate with some of the top researchers and practitioners in the field of farmer financing and agricultural value chains digitization. We are particularly interested in the MIT Institute for Data, Systems, and Society (IDSS) to collaborate on topics such as the one discussed in an article about empowering African farmers with data (http://news.mit.edu.ezproxyberklee.flo.org/2019/empowering-african-farmers-with-data-0530) featuring Munther Dahleh, Director of IDSS.

Boresha is a fintech platform that digitizes field operations for agribusinesses, and unlocks financial services for their farmers. We are a for-profit, impact-driven enterprise and our solution can scale across agricultural value chains and across geographies. We are now looking to raise US $250,000 to bring us toward financial sustainability.

The problem we are addressing:

Smallholder farmers are the most vulnerable to shocks like pandemics and climate change. Moreover, worldwide, 500 million smallholder farmers struggle to access basic financial services and are stuck in a cycle of poverty. This stymies their ability to invest in their farm, boost their productivity, increase their resilience, shift towards sustainable farming practices, and contribute to food security.

The demand for farm credit in Sub-Saharan Africa is $42 billion per annum, with only $6 billion being met by financial institutions. Providing financial services to smallholder farmers is perceived as high risk and costly due to their lack of collateral and fragmentation. 

To compensate for the shortfall, smallholder farmers rely on costly and often predatory informal channels such as village lenders and informal traders This causes significant disruption across the value chain as they are often forced to side-sell, under-invest, or liquidate productive assets. 

For smallholder farmers, getting financing from their agri-buyer, whether it’s a cooperative, or processor, is their preferred option but those buyers often don’t have the resources or internal systems to meet their needs. By strengthening agri-buyers with our platform, we hope to help farmers move away from informal channels and close the rural financing gap.

The highly-scalable solution we propose:

Our platform digitizes field operations for agribusinesses, and unlocks financial services for their farmers. We use an innovative B2B2C business model. We provide enterprise software to agribusinesses, who enroll thousands of smallholder farmers for our direct-to-consumer offerings.

Our platform uses uniquely non-internet protocols. This means that users can check farmer records and make payments without 3G or 4G internet, which is only available to 15% of communities in Africa.

Our solution allows large agribusinesses to digitize every aspect of purchasing goods from smallholder farmers. These buyers use our mobile platform in the field to register, pre-finance, and pay farmers in rural areas. We create significant savings, transparency, and efficiency for these agribusiness clients as we support their transition away from paper and cash. 

As we digitize farmer income, we build a standard financial profile that allows farmers to access financial services from local banks and microfinance institutions. Once registered, farmers can access income advances, savings schemes, and other products directly with an ordinary mobile phone. We integrate with local vendors so that farmers can also instruct us to pay their bills on payday: school fees, utility payments, asset financing, and more. We make digital commerce an easy step for farmers.

Our path to scale:

Since launch, we have helped 8 agribusinesses to implement digitization in a network of over 2,000 farmers delivering $2 Million of produce per year. Our platform has made it possible for ~200 farms to access working capital through their mobile phone, and we have delivered ~$30,000 of such financing to these farmers with 100% repayment rate maintained during the entire period despite COVID-19. This has significantly increased farmer loyalty and retention, while preventing farmers from going to loan sharks or selling dairy cows.

As our new clients implement this platform in mid 2020, we will significantly increase the reach of our impact to smallholder farmers. As we create standardised financial profiles for close to 100,000 farms, we expect to connect at least 5,000 of them to affordable financial services by the end of the year 2020. 

Moreover, we are currently launching a pilot with the largest cocoa exporter in Uganda, collectively buying from 75,000 smallholder farmers. It is worth noting that we have a robust pipeline of other larger agri-buyers which we intend to work with in the near future.

Within the next year, we expect to have around 300,000 farmers registered on the platform. Within the next 5 years, we hope to reach upward of 2,000,000 farmers.

Our model scales quickly through our B2B services for large agribusinesses. Our first client in cocoa sources from ~75,000 farmers. We generate recurring software subscription fees, and charge a small fee on every digital transaction that occurs. Our unit economics are strong, from software subscriptions and transaction fees. We leverage novel cloud infrastructure to make our platform scalable and to significantly reduce our staffing needs and burn rate. This combination of low overheads and high-margin pricing gives us a clear pathway to sustainability.

We can achieve financial viability with 25 large agribusiness clients, which we are projected to reach by the end of 2021. This represents a network of 500,000 farmers and upwards of $20 Million in annual digital farm payments. On top of this basic service, we can also earn commissions on insurance, credit, and other products that are delivered to farmers on top of our infrastructure.

Once we’ve connected millions of African farmers to the digital economy, we intend to increase the range of products and services available in our marketplace. Our dream is to make it much easier for farmers to chart a path to higher income, greater financial stability, and a prosperous future. We have already started building a network of 3rd party vendors, providing anything from water filters to insurance products, so that farmers can access all of the ‘essentials’ through our exclusive rural distribution channel.