Farmhut Africa

Providing informal vegetable and fruit vendors with easy to access finance options.

The specific problem Farmhut is trying to solve is lack of access to finance for informal female vegetable vendors. These vendors often face difficulty in obtaining loans or other forms of financing due to a lack of credit history, collateral, or formal documentation of their income. This lack of access to funding can limit their ability to expand their businesses and meet the needs of their customers.

In Zimbabwe and many other countries in Africa, the informal sector is a significant part of the economy, with many individuals and small businesses operating informally. The informal sector in Zimbabwe is composed of micro, small and medium-sized enterprises (MSMEs) that are not registered or regulated by the government. According to the International Labour Organization (ILO), the informal economy in Africa is estimated to employ around 60-70% of the labor force and contribute up to 50% of the GDP. Informal vendors are a significant part of this sector, and many of them are women. In Zimbabwe, the majority of street vendors are women, and according to the Zimbabwe National Statistics Agency (ZimStat) women constitute about 60% of the informal sector in the country.

The majority of these informal vendors are women. They usually sell between $50-$100 per day and often face additional barriers to accessing finance due to societal and cultural factors.

Factors that contribute to this problem include lack of access to formal financial institutions, lack of credit history, lack of collateral, and lack of formal documentation of income. These factors make it difficult for informal vendors to secure financing from traditional sources.

Consequences of this problem include limited economic opportunities for women, inadequate supply of fresh produce in local neighborhoods, and reduced income for families dependent on these businesses.

Our solution, Farmhut, is a fintech platform that uses AI technology to provide financial services such as loans to informal female vegetable vendors in Africa, including Zimbabwe. Our goal is to help these vendors overcome the challenges they face in accessing financial services, such as lack of credit history and collateral, by using advanced algorithms and data analysis.

Farmhut uses AI to analyze data about the vendors, such as their business history and financial records, to determine their creditworthiness and potential. This allows us to offer customized financial solutions that are tailored to the unique needs of each vendor. Our platform also uses AI to manage and track loans, ensuring that payments are made on time and that vendors are able to repay their loans successfully. Additionally, we use AI-powered chatbots and natural language processing (NLP) for onboarding, customer support, and to provide financial literacy resources to our users.

In simple terms, Farmhut is a platform that uses AI to help informal female vegetable vendors in Africa access loans and other financial services to grow their businesses and improve their livelihoods. By using advanced algorithms and data analysis, AI-powered chatbots and NLP for onboarding and customer support, and financial literacy resources, we are able to offer customized financial solutions that are tailored to the unique needs of each vendor and provide them with the necessary support and education to be successful.

Our solution, Farmhut, serves informal female vegetable vendors in Africa, including Zimbabwe. These vendors, are mostly women, constitute a significant portion of the informal sector in Africa, and often face challenges in accessing financial services and credit due to lack of formal documentation, collateral, and credit history. As a result, many of them struggle to grow their businesses and improve their livelihoods.

The solution is designed to address the needs of these vendors by providing them with access to financial services such as loans, which they can use to invest in their businesses, buy inventory, and improve their operations. This access to financing leads to increased revenues, which in turn leads to more disposable incomes and more access to health, basic needs, and support to their families. Additionally, our platform provides financial literacy resources to help vendors improve their financial management skills, and increase their chances of success.

The impact of our solution on these vendors will be meaningful and direct, as it will help them to overcome the financial barriers that are currently preventing them from growing their businesses and improving their livelihoods. By providing access to financial services and education, we aim to empower these vendors to take control of their financial futures, increase their revenues and disposable incomes, and contribute to the local economy. This can also improve their standard of living and that of their families, reducing poverty and improving the overall economic situation of the community.

The team at Farmhut is uniquely positioned to solve the problem of financial access for informal female vegetable vendors in Africa, including Zimbabwe. The team members have first-hand experience in the informal sector, with 9 out of 16 of the team members having single-headed families where mothers or grandmothers have been vegetable vendors supporting their family. This personal experience gives them a deep understanding of the challenges that vendors face and the impact that access to financial services can have on their lives.

The team is highly qualified and diverse, comprising of first-generation university graduates in engineering, finance, accounting, agriculture, software engineering, sales, and marketing. This diversity of skills and experience enables them to approach the problem from multiple perspectives, and to develop innovative solutions that are tailored to the needs of informal female vegetable vendors.

The team lead, Munya Makosa, was raised by his grandmother in the low-income town of Chitungwiza where she supported him and other siblings through school. Ryan grew up at a rural home where every harvest season he would go with his grandmother to sell their fresh produce at the market. Thandiwe was a vendor throughout university where she got the much-needed money to support herself through university. All these experiences have given the team a deep understanding of the daily struggles that informal vendors go through, this makes them empathetic to the vendors needs and well suited to come up with solutions that addresses those needs.

The team's personal experiences and professional qualifications, combined with their deep understanding of the informal sector, make them well-positioned to develop and implement innovative solutions that can improve the lives of informal female vegetable vendors in Africa.

As the Farmhut team, we have taken several steps to understand the needs of the population we want to serve. One of the key methods we have used is conducting interviews with vendors in our target market. We have spoken with over 500 vendors in total, and conducted 1073 interviews, taking the time to ask detailed questions about their needs and preferences. To ensure that we were gathering accurate and relevant information, we used a combination of questionnaires and feedback forms during these interviews.

In addition to interviews, we have also been testing our products with a group of 260 vendors since 2021. This has allowed us to gather valuable data on how our products perform in real-world conditions, and to make any necessary adjustments to our designs. We have been keeping detailed records of the results of these tests, and using them to inform our product development process.

Another important step we have taken is consulting with the vendors we have been testing with, to get their input on product design and development. This has allowed us to gain a deeper understanding of their needs, and to make sure that we are creating products that are tailored to their specific requirements. By taking these steps, we believe we have a good understanding of the needs of the population we want to serve, and that we are well-positioned to create products that will meet those needs effectively.

Our solution is innovative because it uses advanced technology such as AI and natural language processing (NLP) to provide financial services and support to informal female vegetable vendors. This approach is new and improved because it combines cutting-edge technology with a deep understanding of the specific financial needs of this demographic, who have been traditionally underserved by traditional financial institutions. The use of AI and NLP allows for more efficient onboarding and customer support, as well as providing financial literacy resources which can empower vendors to make better financial decisions.

Farmhut's solution could be catalytic in that it has the potential to change the market for financial services for informal female vegetable vendors. By using advanced technology, the company is able to offer more affordable and accessible financial services to a traditionally underserved demographic. This could lead to an increase in the number of successful informal female vegetable vendors, which would have a positive impact on local economies and communities. Additionally, Farmhut's use of technology as a means of improving financial services for informal vendors could serve as a model for other companies and organizations looking to use technology to improve financial access for underserved populations, which would enable broader positive impacts from others in this space.

Our goal is to collaborate with a minimum of 5000 vendors, with the aim of significantly enhancing their household incomes by a minimum of 35%. Our objective is to establish long-lasting and sustainable pathways for their businesses to flourish and grow. Additionally, we are committed to offering on-demand financial education to 6500 vendors within the next year.

At Farmhut, we utilize a fusion of cutting-edge technologies, such as Artificial Intelligence and Natural Language Processing, to streamline onboarding, provide exceptional customer support, and curate financial literacy materials for our vendors. Additionally, we employ low-tech solutions, such as social media bots, particularly on WhatsApp, to effectively manage and communicate with our vendors throughout the onboarding process.

We currently work with 260 vendors. We project to be working with 5000 by next year.

Our primary market is female informal vegetable vendors, who often face cultural barriers, particularly when it comes to accessing credit. They are not accustomed to borrowing money for their businesses and are responsible for providing for their families. As a result, the limited income they generate is primarily used for sustenance, which can impede their business.

We are proud to be working in partnership with some of the most influential organizations in our industry. Our partnerships with the Zimbabwe Farmers Union, the largest organization of its kind in the country, the International Labor Organization and Raysun Capital, a leading microfinance institution, have allowed us to gain invaluable insights and support as we strive to improve the lives of vendors across the country. Together, we are committed to driving sustainable growth and development in the industry, and to making a real difference in the lives of those we serve.

Farmhut's business model is based on supplying vendors with produce at a discounted rate of 5%. The company earns revenue by adding a 20% margin on the selling price of the produce. Additionally, Farmhut offers loans to vendors at an interest rate of 10% on money borrowed, with a late payment fee for overdue loans. The key customers for Farmhut are vendors who purchase produce for resale. The products or services provided by Farmhut include discounted produce and loan services. Vendors want and need these products and services because they are able to purchase produce at a lower cost, which can increase their profit margin, and they may also need financial assistance in order to purchase the produce.

Farmhut's path to financial sustainability is through the sales of produce and loan services. By supplying vendors with produce at a discounted rate of 5% and adding a 20% margin on the selling price, Farmhut is able to generate revenue. Additionally, by offering loans to vendors at an interest rate of 10% with a late payment fee, Farmhut is able to bring in additional revenue. In the long-term, these revenue streams are expected to cover the company's expenses. It is worth noting that the company is not looking at sustained donations, grants, service contracts to governments or raising investment capital as revenue streams in the long run