The Amana Market

According to the World Bank, access to formal financial services remains a challenge in Africa, with about 350 million adults being unbanked. In the agricultural sector, smallholder farmers receive only a fraction of total commercial lending. This insufficient access to credit hinders farmers' ability to invest in productivity-enhancing inputs and technology, thus constraining their growth and income generation.

Moreover, only a small fraction of smallholder farmers in Africa have access to agricultural insurance, exposing them to significant risks from climate change, diseases, and pests. Climate change has led to increased frequency and intensity of droughts, floods, and storms, which can devastate crops and jeopardize farmers' livelihoods.

Finally, unstable markets and a lack of market information can lead to price volatility, leaving farmers and traders with limited bargaining power and susceptible to exploitation by middlemen. This can result in farmers receiving low prices for their produce, while consumers face high prices, further exacerbating food insecurity.

CoAmana addresses the financial inclusion challenges faced by smallholder farmers and traders in Africa, who often lack access to tailored financial services that cater for their unique needs. This lack of financial inclusion limits their ability to invest in their businesses, manage risks, and adapt to changing market conditions.

We are creating efficiencies to solve market frictions in Africa’s Agriculture markets by bringing existing physical market hubs online while still allowing them to maintain ownership of their markets. 

Our solution, Amana Market, is a digital platform that empowers existing agricultural markets by providing a comprehensive suite of tools and embedded finance services tailored for smallholder farmers, traders, and market hubs. CoAmana digitizes market transactions, streamlines payments, and offers embedded financial solutions, such as trade finance, digital wallets, and insurance products.

Amana Market - Digital Platform

Coamana’s Vertical SaaS trade solution, Amana Market, improves market efficiency by supporting local market hubs and farming community leaders in digitizing and making the hubs more efficient. 

The platform’s feature set include: 

1. Markets management SaaS to manage market actors

2. Digital trade and payments capabilities for registered members and hubs to trade with each other

3. Analytics and market insights on farming communities and market hubs. 

We obtain customers through direct market sales usings agents:

1. Direct to market leader sales

2. Sales market regulatory agencies, Market regulator sales which allows onboarding of entire market networks within a region.

We expand by 

• Leveraging trade networks and routes via market leader to market leader referrals. 

• Developing new feature sets to fit existing market needs. 

The platform is accessible via Web App, Mobile App, USSD and Call center

Embedded Finance - Trade finance, digital wallets, and insurance products.

Utilising CoAmana's platform,  we gather and synthesize data from agricultural markets, traders, and farmers, using this information to design embedded finance to farmers and traders in the form of insurance, trade finance and digital wallets. 

Tailored insurance products based on granular data from our platform protect vulnerable populations against climate disasters, health-related disruptions, or unstable markets. In addition to insurance, the platform leverages embedded finance to offer other critical financial services, such as trade finance and digital wallets.

Trade finance plays a vital role in facilitating transactions between buyers and sellers in the agricultural sector, ensuring smooth and timely trade operations. By providing credit, guarantees, or other financial instruments, CoAmana's platform helps to bridge the financing gap that often hinders smallholder farmers and traders from accessing traditional financial services.

Digital wallets integrated within CoAmana's platform allow users to securely store, manage, and transfer funds, streamlining transactions between various stakeholders in the agricultural market. This feature not only simplifies the payment process but also enhances financial inclusion by providing an accessible and user-friendly solution for those who may not have access to traditional banking services.

The combination of insurance, trade finance, and digital wallets within CoAmana's platform creates a comprehensive and holistic embedded finance solution for the agricultural sector. By addressing the unique financial needs of smallholder farmers, traders, and market hubs, CoAmana promotes financial resilience and empowers users to make more informed decisions, ultimately contributing to the overall efficiency and sustainability of the agricultural market ecosystem.

Our solution serves smallholder farmers, traders, and other key stakeholders in the agricultural value chain across Africa. We focus on digitizing the value chain, creating a more efficient, transparent, and accessible ecosystem that benefits our target audience, including marginalized groups like women and youth.

1. Smallholder Farmers will benefit from increased market access, fair prices, and reduced postharvest losses, leading to higher incomes and improved livelihoods. They'll also access resources like financing, insurance, and climate-smart practices, enhancing resilience to challenges.

2. Traders and market participants, particularly women and youth, will benefit from streamlined transactions, reducing costs and increasing efficiency. This will lead to business growth and job creation, fostering economic empowerment and gender equity.

3. Other stakeholders, such as service providers and input suppliers, will gain from increased collaboration and access to a broader customer base, spurring sector innovation and growth.

By improving the overall efficiency and competitiveness of the agricultural value chain, our solution will have a broader socio-economic impact. It will contribute to food security, economic growth, and job creation in the region, positively affecting millions of people, including women and youth, who depend on agriculture for their livelihoods. This inclusion will also promote social equity and sustainability in the sector.

Our team at CoAmana is well-positioned to deliver the proposed solution, thanks to our diverse expertise, extensive industry experience, and deep understanding of the challenges faced by smallholder farmers and traders in Africa.

Industry experience: Our team members have extensive experience working in the agrifood sector in Africa. This experience enables us to navigate the intricacies of the sector, identify key stakeholders, and build strategic partnerships that support our solution's successful implementation.

Local knowledge: We have a strong presence in the markets we serve, with team members who understand the local context and the specific challenges faced by smallholder farmers and traders. This local knowledge ensures that our solution is tailored to the unique needs of our users and that we can effectively engage with local stakeholders to drive adoption and impact.

Team

Hafsah Jumare, our Founder and CEO, is a behavioural economist with years of experience in designing, testing, and implementing financial solutions for MSMEs in Sub-Saharan Africa. As an Acumen Fellow, she has a strong background in using digital tools to alleviate poverty. Hafsah holds a Master's in Applied Economics from the University of Cape Town and leads our diverse team of experts.

Alfred Olajide, our Director of Product, has a BSc in Physics from the University of Maiduguri and is a certified Product Executive with over six years of experience in tech and development. He excels at problem-solving and improving customer satisfaction.

Nasir Mohammed, our Business Development Lead, has a wealth of experience in strategy development and execution across Agriculture, Technology, and Development sectors, with degrees in Management from London School of Economics, and Public Policy from the University of Oxford.

Rifkatu Nghargbu, our Project Manager and Head of Pilot Projects, has a Ph.D. in Economics from the University of Ibadan and has extensive experience managing projects with international donors, as well as a track record of winning grants and publishing research.

Luqman Hussein, our Research & Data Director, holds a BSc in Financial Economics from Strathmore University and has prior experience as an Associate at the Busara Center for Economics. He is a quantitative researcher adept at planning and supervising research projects using a human-centered design approach.

CoAmana has 170,000 registered users on its platform, Amana Market across Nigeria and Kenya. We currently have 10,000 active users a

We are applying to Solve because we believe that the MIT Solve community's resources, expertise, and global network can help us scale our solution and amplify our impact on smallholder farmers and traders in Africa. By partnering with Solve, we aim to achieve the following:

Collaboration and partnerships: Being part of the Solve community can facilitate strategic partnerships and collaborations with other innovators, organizations, and stakeholders who share our vision of transforming agriculture markets in Africa and promoting financial inclusion.

Visibility and credibility: By joining the prestigious MIT Solve community, our solution will gain increased visibility and credibility, which can help us attract more partners, customers, and investors to support our mission.

Knowledge exchange and learning: Solve provides a platform for continuous learning and exchange of ideas among innovators and problem-solvers, enabling us to stay updated on the latest trends, best practices, and technologies in our sector.

We operate a decentralized model that is aligned with the fragmented nature of Africa’s agriculture markets. We do not seek to create our own market/exchange but digitize existing ones. Most solutions ignore the foundational wisdom and evolution of local markets. A large number seek to Disrupt, Own or Create, but they miss the opportunity to strengthen existing farming/community markets which is a more accelerated and scalable approach. Our solution is truly inclusive, it seeks to empower and not replace. 

We digitize the market system and existing systems of extending credit & insurance(i.e community trust). We then have opportunities to improve them with everything needed to make embedded finance work, data driven decision making on credit risk, injecting capital & insurance underwriting.

In addition to digitizing traditional market systems, we focus on solving the pain-points that smallholder farmers face, yet have little power to overcome, access to embedded finance. Our embedded finance services integrate trade finance, digital wallets, and insurance within our trading system, while maintaining the essence of traditional market structures.

To further ensure that our platform and services serve smallholder farmers and traders, we seek to utilize the vast amounts of data through our digital platform to leverage AI-powered decision-making to assess credit risk and optimize underwriting, ensuring tailored financial services for the agriculture community. Additionally, our blockchain-enabled wallet facilitates secure cross-border trading, with the potential to develop our own cryptocurrency for seamless transactions.

In the next year, CoAmana aims to:

1. Expand to 100 additional market hubs and their networks, reaching more farmers and traders, and increasing their access to fair markets.
2. Integrate tailored insurance products to protect vulnerable populations against climate disasters, health-related disruptions, or unstable markets.
3. Implement an embedded finance system, including trade finance and digital wallets, to promote financial inclusion and economic stability for farmers and traders.

Over the next five years, CoAmana plans to:

1. Establish a strong presence across Africa, reaching thousands of market hubs and millions of farmers and traders.
2. Continuously improve the embedded finance system, incorporating AI and blockchain technology to facilitate cross-border trading and more efficient decision-making processes.
3. Partner with financial institutions, manufacturers, and research organizations to offer targeted analytics, product testing, and distribution channels for agricultural markets.
4. Strengthen the resilience of agricultural communities by incorporating climate risk assessments and mitigation measures in infrastructure planning and design.

To achieve these goals, CoAmana will:

1. Collaborate with local market hubs, farming community leaders, and government agencies to better understand the needs of the agricultural sector and tailor the platform's offerings.
2. Secure strategic partnerships with financial institutions, insurance providers, and technology companies to enhance the platform's embedded finance capabilities.
3. Continuously gather data and feedback from users to improve the platform's features, user experience, and scalability.

We are measuring our progress toward our impact goals through a combination of quantitative and qualitative metrics, as well as continuous monitoring and evaluation. Key performance indicators (KPIs) we track include:

1. Number of smallholder farmers and traders reached: This metric helps us gauge the scale of our impact and the extent to which our solution is being adopted by our target audience.

2. Number of market hubs connected: By tracking the number of market hubs integrated into our platform, we can assess our progress in creating an extensive and accessible network for farmers and traders.

3. Volume and value of transactions facilitated: This indicator helps us understand the economic impact of our platform, as it measures the total value of goods and services exchanged through our solution.

4. Financial inclusion metrics: We monitor the number of users who gain access to financial services such as savings, loans, and insurance, as well as the volume and value of these services. This enables us to assess the effectiveness of our platform in promoting financial inclusion.

5. Gender disaggregated data: By collecting data on the gender of our users, we can evaluate our progress in promoting gender equality and women's economic empowerment.

6. Adoption of sustainable and climate-smart agricultural practices: We track the number of farmers who adopt sustainable practices through our platform, which contributes to our impact on SDGs 12 and 13.

7. Customer satisfaction and user feedback: We regularly collect feedback from our users through surveys, interviews, and focus group discussions to ensure we are addressing their needs and continuously improving our solution.

To ensure accurate and reliable data collection, we have developed a robust monitoring and evaluation (M&E) framework that includes data collection tools, protocols, and reporting systems. We also collaborate with external research partners and evaluators to conduct independent assessments and validate our impact results. Regular progress reports and impact assessments help us refine our approach, identify areas for improvement, and make data-driven decisions to enhance our solution and maximize our impact.

Our theory of change is based on the belief that by digitizing existing agricultural market hubs and providing embedded finance services, we can improve financial inclusion, enhance market efficiency, and ultimately, uplift the livelihoods of farmers, traders, and communities in Africa.

1. Activities: We implement our digital platform in existing agricultural market hubs, providing tools for market management, trade facilitation, and access to embedded finance services, such as trade finance, digital wallets, and tailored insurance products.

2. Immediate Outputs: Through these activities, we expect to achieve the following outputs: a. Increased adoption of our digital platform by market hubs, farmers, and traders. b. Improved access to financial services, including credit, digital payments, and insurance. c. Enhanced market efficiency and transparency, reducing transaction costs and information asymmetry.

3. Short-term Outcomes: As a result of these outputs, we anticipate the following short-term outcomes: a. Improved financial stability and resilience among farmers and traders, thanks to access to tailored insurance and credit products. b. Strengthened market linkages, leading to better price discovery and fairer trade conditions. c. Higher income and livelihood opportunities for farmers, traders, and their communities.

4. Long-term Impact: In the long run, we believe our solution will contribute to sustainable economic growth and reduced poverty in the agricultural communities we serve. This aligns with the UN Sustainable Development Goals, specifically Goal 1 (No Poverty), Goal 2 (Zero Hunger), and Goal 8 (Decent Work and Economic Growth).

The core technology that powers CoAmana is a digital platform that combines a range of digital tools and services to support agricultural market hubs, farmers, and traders in Africa. The platform leverages a variety of modern technologies, including:

1. Cloud-based Software as a Service (SaaS): Our platform offers market management tools to help market hubs manage their members and streamline operations. This includes member registration, communication, and reporting.

2. Digital Payments and Trade Finance: CoAmana integrates secure digital payment solutions that enable users to conduct transactions seamlessly. In addition, we provide trade finance options that help farmers and traders access credit, reducing cash flow constraints and promoting business growth.

3. Data Analytics and Insights: The platform collects and analyzes data from various sources to generate valuable market insights and trends. These insights help stakeholders make informed decisions and identify potential opportunities and challenges in the agricultural sector.

4. Embedded Finance Services: CoAmana incorporates insurance products tailored to the needs of its users, protecting them against climate disasters, health-related disruptions, or unstable markets. This financial inclusion aspect is crucial in promoting resilience and stability for our target communities.

5. Future Technological Integration: CoAmana seeks to evolve its solution to include AI and blockchain technology in the future. AI can enhance decision-making processes and risk assessments, while blockchain technology can enable secure and transparent cross-border trade.

Gender inclusion strategy is  a very important component of our company. We have learned to tailor our projects to empower women farmers especially in rural areas. Our self-assessment report from Acumen as at January 2023, shows that CoAmana gender inclusion status and Gender commitment practice is about 73% and 63%, respectively. We also focus on youths who are grossly unemployed. CoAmana empowers women, youth, and vulnerable groups with access to market information, financial services, and capacity-building opportunities

CoAmana digital platform focuses on critical elements of Africa’s existing agriculture trade and provides support to local market hubs and farming community leaders in digitizing and making the hubs more efficient. The platform’s feature set include: 

• Markets management SaaS to manage their members 

• Digital trade and payments capabilities for registered members

• Analytics and market insights on farming communities and market hubs. 

 We expand Amana Market by leveraging trade networks and routes via market leader to market leader referrals and expanding features to fit existing market needs. We generate our income through commissions on trade conducted through our platform with trade credit/finance offered to buyers.  We also generate income through Insights and analytics charges to business entities looking to understand the market or estimate demand.

Our plan for achieving financial sustainability involves a multi-faceted approach that combines revenue generation, operational efficiency, strategic partnerships, and scalable growth. Key components of our financial sustainability plan include:

Diversified revenue streams: We will continue to develop and refine our platform offerings, ensuring that we generate income from multiple sources, including commissions on trade, trade credit/finance services, and insights and analytics charges. This diversification will help minimize risks associated with relying on a single revenue source and enable us to adapt to changing market conditions.

Strategic partnerships: We will actively seek out and expand our partnerships with key stakeholders in the agricultural sector, including governments, NGOs, financial institutions, and private sector organizations such as Mercy Corp Agrifin, Busara, iPA, GIZ, GSMA. These partnerships will not only provide us with access to funding and resources but also help us scale our platform more effectively by tapping into existing networks and expertise.

Scalable growth: We will prioritize the expansion of our platform to new markets and regions such as Tanzania, Ethiopia and Uganda by 2024, leveraging market leader referrals and adapting our platform features to local needs. This will enable us to reach a larger user base, increase transaction volumes, and generate higher revenues over time.

Continuous innovation: We will invest in research and development to improve our platform, services, and user experience, such as operationalising our Blockchain based Market Maker Model for clearing market transactions. This will not only help us maintain a competitive advantage but also attract new customers and retain existing ones, thus ensuring a steady revenue stream.

Our plan to achieve financial sustainability has seen significant progress so far. Some examples of our successful initiatives include:

Revenue Growth: We witnessed a substantial increase in revenue between 2021 and 2022. In 2021, our revenue was $399,422, and by 2022, it grew to $744,802. This growth demonstrates the demand for our solution and our ability to scale our services effectively.

Pilot Projects: Our pilot projects conducted between 2020 and 2022 have helped us refine and improve our product offerings. These projects, focused on market access, insurance bundling, group transactions, and buy-now-pay-later solutions, have allowed us to better understand the needs of our target users and tailor our services to meet their requirements.

Needs Assessment and Market Research: We have carried out extensive market research and needs assessment by surveying and engaging with various stakeholders, such as farmers, market leaders, traders, and suppliers. This research has enabled us to identify the specific needs of our users and develop targeted solutions, contributing to our financial sustainability.

Product Validation: Our product validation efforts with 40 markets and farming communities in Nigeria and Kenya have provided valuable insights into the effectiveness of our services. By onboarding and surveying leaders, traders, farmers, logistics providers, and input suppliers in both countries, we have gained a better understanding of the market and user requirements, positioning ourselves for long-term financial sustainability.

Diversified Revenue Streams: Our business model includes multiple revenue streams, such as commissions on trade, trade credit/finance for buyers, and analytics and insights for business entities. This diversification helps us mitigate risks and maintain financial stability.