Imole

Digital financial inclusion and AgricTech solutions for underserved smallholder farmers in Western Nigeria 

Background

Our global food supply and security depend largely on the quality of life, knowledge, and productivity of farmers all around the world, especially the smallholder farmers who live and farm in emerging markets. In Africa, there are an estimated 33 million smallholder farms, and the farmers that live on them contribute up to 70% of the food supply (IFAD, 2022). In 2019, according to McKinsey, sub-Saharan Africa (SSA) is home to over 200 million smallholder farmers, and about 23% of SSA's GDP comes from agriculture. Africa has more than half of the Earth’s arable land (roughly 600 million ha) with SSA accounting for a quarter of the world’s arable land, yet the region spends US$35 billion importing food, making Africa a net importer of food.

Challenges/ Issues

Our global food supply and security depend largely on the quality of life, knowledge, and productivity of farmers all around the world, especially the smallholder farmers who live and farm in emerging markets. In Africa, there are an estimated 33 million smallholder farms, and the farmers that live on them contribute up to 70% of the food supply (AfDB, 2022; IFAD, 2022). In 2019, according to McKinsey, sub-Saharan Africa (SSA) is home to over 200 million smallholder farmers, and about 23% of SSA's GDP comes from agriculture. Africa has more than half of the Earth’s arable land (roughly 600 million ha) with SSA accounting for a quarter of the world’s arable land, yet the region spends US$35 billion importing food, making Africa a net importer of food.

Smallholder farmers are plagued by structural deficiencies that deny them financial services opportunities, undermine their bargaining power, and lead to inequitable distribution of value along the supply chain. A significant inefficiency in the system is the fact that middlemen and produce buyers pay farmers in cash, which deepens the exclusion of the smallholder farmers from formal financial services like credit programs and reliable savings schemes as well as access to bigger markets.

Market Access

Many smallholder farmers travel as far as 10km to access markets, and for some, the cost of transportation to the market is unbearable.

Exclusion of smallholder farmers in social services

Smallholder farmers suffer from structural deficiencies, and as such missed out on cash palliatives; they could have received during COVID, due to the fact that they don’t have access to digital financial platforms.

Impacts of climate change and smallholder farmers

Most smallholder farmers reported that climate change has negatively impacted their crop production, leading to low crop yield and high crop failure. Climate change can disrupt food availability, reduce access to food, and affect food quality. The majority of smallholder farming in Nigeria is rain-fed agriculture, thereby exposing farming to the negative impacts of climate change.

Our solution will attend to certain critical questions such as: How might we design a digital platform that enables farmers to grow for demand, eliminate food loss, provide direct access to the market, increase earnings and enable financial inclusion for smallholder farmers and rural dwellers? How might we prevent or drastically reduce post-harvest loss?

We are creating a platform that enables farmers to grow for demand, featuring key value-added features across the agriculture value chain. The solution makes it possible for buyers to secure hectares or acres or plots of cultivation in advance on our platform and even make commitments weeks or months, depending on the produce, before the produce matures for harvest. Farmers will be able to receive money from any bank/channel, transfer funds to any Nigerian/African bank account, and purchase airtime for themselves or third parties. Our solution will provide access to digitized fund disbursement via embedded, customised accounts, which can be opened and operated by USSD and Progressive Web Apps (PWA) channels, to drive financial inclusion of previously financially excluded smallholder farmers in the digital economy. We will leverage and work in tandem with farmers’ associations and community cooperatives.

Our digital platform will provide access to local and global markets for small-scale farmers, and also serve as a community for farmers to connect. It has an advantage that enables smallholder farmers to optimize their farming resources and plan farming activities in advance for optimum outcomes. Incorporated in the solution is a mechanism that gives highly reliable weather forecasts without requiring internet access, and it gives a 48-hour SMS-based weather forecast service. We work directly with rural smallholder farmers and connect them with wholesale buyers across Nigeria and globally.

Our target population is underserved smallholder farmers (both male and female) in rural Western Nigeria, who live on less than 2$ s day. Rural farmers provide the majority of food supplied in Nigeria, and even the produce exported, yet they are poor, neglected, and miss out greatly on digital financial opportunities. 

Our digital platform will provide access to local and global markets for small-scale farmers, and also serve as a community for farmers to connect. It has an advantage that enables smallholder farmers to optimize their farming resources and plan farming activities in advance for optimum outcomes. Incorporated in the solution is a mechanism that gives highly reliable weather forecasts without requiring internet access, and it gives a 48-hour SMS-based weather forecast service. We work directly with rural smallholder farmers and connect them with wholesale buyers across Nigeria and globally.

A significant inefficiency in the agricultural process is the fact that buyers pay farmers in cash, which is not only an operational bottleneck in itself for our platform and buyers alike but also deepens the exclusion of the smallholder farmers from formal financial services like credit programs and reliable savings schemes. Our digital wallet, which is a component of our solution will eliminate these cash inefficiencies, and help to bring improved financial happiness and health to smallholder farmers.

The value addition also includes:

·       Donors and smallholder farmers' families can also send them funds through us

·       Our platform can be used by smallholder farmers with or without the internet

·       Exportation opportunities available

·       We plan to develop a propriety technology for production/processing/supply chain- as a driver/enabler

·       Government and donors during the COVID outbreak would have been able to send funds to farmers as cash in their wallets or quality inputs.

·       We get quality inputs to growers when they’re needed, but we give dealers and farmers space to repay us over the season.

·       Forward-thinking financing is what growing a rural economy is all about.

·       Our proprietary platform connects stakeholders right across the supply chain.

·       It can be operated in local languages and in offline mode, so it’s ideal for areas with low connectivity.

·       Users save time and money, meaning more profit for everyone, both in the short and long term.

·       We’ve got hundreds of well-trained field agents, all local to the regions they work in – so they understand the landscape culturally, as well as professionally.

·       Ours is a business of partnership-building, connecting producers with buyers, agribusinesses with food manufacturers, governments and NGOs

Our team lead, Sope Afolayan, is a circular economy enthusiast, an Ellen MacArthur Foundation From Linear to Circular Africa alumni, a winner of the 2021 Food Systems Game Changers Lab challenge (organised by The Rockefeller Foundation, IDEO, United Nations Food Systems Summit, and EAT Foundation). He is a Rural Food Innovation System Designer, with vast experience working with rural smallholder farmers and has been able to secure reliable and profitable markets for selected smallholder farmers in Afijio LGA of Oyo State, Nigeria. Sope Afolayan is also a design researcher driven by human-centered innovation to solve problems. 

Blessed Obiyomi is a full-stack developer with vast experience in mobile application development and digital marketing designs. Blessed has provided digital solutions to start-ups, SMEs, and multinationals across Africa. 

Other members of the team include experienced researchers, Agric-Tech designers deploying agricultural solutions for state governments in Nigeria, and an experienced business development manager. 

I (Sope Afolayan), was invited to a meeting by the constituency leader (Honourable Seyi Adisa) of Afijio Local Government Area of Oyo state, in March of 2020, and he complained bitterly about how farmers in his constituency were lamenting poor harvest, unprofitable business, lack of funds and access to loans, poverty, unfavourable weather condition, and degenerated standard of living. He felt helpless as he does not know how to tackle the situation. He said he then remembered I had organized trainings on Design Thinking for Innovation and solving wicked problems, and ask if there was anything help I could render. 

We conducted a design research in selected communities, after meeting with my team of researchers, programmers, strategists, designers, and agripreneurs. We engaged the farmers, community members, traditional rulers, farmer association heads and executives, post office personnel, food processing centers, women, youth association, secondary school students, and key stakeholders. and the findings and insights gave us goosebumps. We ideated and came up with possible solutions, and the constituency leader was so excited that he got a tractor and other farm inputs for the farmers at a highly subsidized rate, and provided small loans that were paid back by the farmers at the stipulated date. That was also when Farmady was birthed; an online farm produce market for smallholder farmers to sell their produce directly at a profitable price, compared to the price gotten from middlemen. The communities have very strong and cordial farmer associations. 

We conducted more comprehensive follow-up research in 2021 in more communities in Afijio LGA, and applied for the 2021 Food systems Game Changers Lab, and our application was part of those selected global, as a "bridging the digital divide gap for rural communities" solution. This encouraged us to further develop our solution. It was inspired by the farmers and communities we engaged. 

We tested the marketplace solution traditionally by meeting with individuals, and groups of farmers across the various communities shared our solution with them, registered them, provided modern farm practice training through our technical partners, and got buyers from various states in Nigeria who eventually placed orders for tonnes of cassava, maize, and palm oil. It was at the point of loading the delivery tricks we realized farmers won't release their produce unless they receive cash payment. The majority of the smallholder farmers do not have bank accounts to receive payment transfers, and that was a major bottleneck for us and the buyers. We can not be moving huge amounts of cash physically across locations, it is not safe, and seems obsolete. That was when we realized the need to embed digital financial services solutions.