EaseOnTrack

Accessing climate finance is a challenge among farmers and agri-SMEs

Zambia is already experiencing the impacts of climate change with more frequent droughts, rising temperatures, and reduced agricultural output. Due to the overwhelming dependence on rain-fed agriculture, the reduction in rainfall has significantly reduced productivity in food production.

The agriculture sector, which accounts for 20% of Zambia's GDP, is expected to incur losses of $2.20-$3.13 billion over the next 10-20 years due to climate change, according to the 2021 United Nations Common Country Analysis Report. However, limited access to climate finance is hindering farmers and MSMEs from adopting climate-adaptive solutions.

Women, who are more likely to be financially excluded, are particularly affected by climate change. The Bank of Zambia's (Central Bank) Financial Scoping Survey shows that only 58.68% and 9.30% of women are formally and informally included in the financial system, respectively. The survey also reports 17.30 % of women use bank services and 56 % use mobile money services with only 1.7% having access to microfinance services. On a global scale, World Bank reports more than 1 billion women still do not use or have access to the financial system. International Finance Corporation (IFC) estimates a $300 billion gap in financing exists for formal, women-owned small businesses and more than 70 % of women-owned small and medium enterprises have inadequate or no access to financial services.

The lack of access to finance coupled with climate change aggravates poverty, with small-scale farmers and women being hit hardest. The common barriers contributing to the challenge of accessing finance by farmers and MSMEs include

• Poor credit score and/or lack of financial track record.
• Ineffective channels for delivering climate finance directly to farmers.
• The high transaction costs associated with lending to farmers and agricultural SMEs, due to their location far from financial institutions and the inadequate physical infrastructure, present a substantial barrier to access to credit. To reach this market segment, financiers would need to make substantial investments in expanding their branch networks, recruiting and training staff, and building loan processing systems. These transaction costs can reduce profit margins and discourage financiers from lending to farmers.
•  Lack of Capacity to Manage Agricultural Risks: The agriculture sector poses specific and multifaceted risks that both farmers and financiers must manage, including risks related to seasonal cash flows, production, marketing, and price fluctuations. Smallholder farmers and agricultural SMEs often struggle to manage these risks due to their dependence on seasonal production cycles, lack of knowledge, and capacity to diversify activities. This lack of risk management and diversification limits their capacity to invest in productive activities and repay loans, while also presenting risks for financiers who face irregular cash flows and loan repayment.

EaseOnTrack is a digital finance platform that assists smallholder farmers and Agricultural MSMEs (Micro, Small, and Medium Enterprises) in gaining access to climate finance while keeping proper records through inventory control, asset management, crop yields, and basic financial reporting. The application operates as a record-keeping system where farmers can keep proper financial and farm operation records for their business transactions while directly receiving and making payments using mobile money since it is connected to mobile money. This enables farmers to have digital copies of their transactions, thus making it easy to build credit history. Farmers using the application can also extract financial statements and performance reports.

 With machine learning the platform use the records as alternative data to determine the creditworthiness of users. Active social microlending institutions and finance providers are added to the application to share the climate financing opportunities they provide. Farmers can directly apply for financing to increase climate resilience and mitigation capacity. The financiers can review and approve financing requests and disburse funds directly to the farmers through their mobile money while keeping track of their financial performance on the application.

 Part of the solution delivery is the organization of farmers' community outreach programs for training and teaching communities about climate resilience, basic financial literacy, and agriculture risks. This is to improve their knowledge of financial management, climate change, and its impact on agriculture. Improved knowledge plays a role in making decisions as they practice agriculture and become climate resilient. The community outreach programs are organized and delivered by our local extension officers. The extension officers also help farmers to understand financing opportunities and act as facilitators and communications for farmers. Extension officers also serve as mobile money agents in order to provide the physical presence and `infrastructure` necessary for farmers to deposit and withdraw into their mobile money accounts.

It is worth noting that users of our digital platform receive weather forecasts as it helps farmers to plan and make decisions too. 

The features of the EaseOnTrack platform vary based on the scale of the farm's operations, ranging from basic to advanced functionalities: Short Demo Video - USSD Version  and Web Version (2 minutes YouTube Video)

Our solution aims to serve smallholder farmers and agri - (Micro, Small, and Medium Enterprises) MSMEs in Zambia who are currently underserved in accessing climate finance due to limited access to financial services, lack of financial literacy, and inadequate collateral. These farmers and MSMEs are particularly vulnerable to the impacts of climate change, which has led to reduced agricultural productivity.

The target population is made up of smallholder farmers and MSMEs who are heavily reliant on rain-fed agriculture for their livelihoods. 

We address the needs of this underserved population by providing a digital finance platform that assists farmers and MSMEs in gaining access to climate finance. The platform uses machine learning to determine the creditworthiness of users based on their records such as crop yields, type of crops, market price, cooperative or farmers group membership, and mobile money financial history, allowing them to apply for financing to increase capacity for climate resilience and mitigation. Active social microlending institutions and finance providers are added to the application to share the climate financing opportunities they provide.

We also organize community outreach programs to train and educate farmers on climate resilience, financial literacy, and agriculture risks. These programs are delivered by local extension officers who act as facilitators and communications for farmers, helping them understand financing opportunities and other important information. The extension officers also serve as mobile money agents. Through these efforts, we are directly improving the lives of farmers by making it easier to access mobile money services and empowering them with knowledge and resources to build resilience against climate change and other risks.

Overall, the solution aims to directly and meaningfully improve the lives of smallholder farmers and MSMEs in Zambia by increasing their access to finance, improving their financial literacy, and building their capacity for climate resilience and mitigation. By doing so, EaseOnTrack contributes to reducing poverty, improving food security, and promoting sustainable economic development.

Our proximity to the rural communities we serve is a significant advantage in developing a better solution that meets the needs of the target population. Our main offices are currently based in the area of our target and interact with the farmers on a daily basis, enabling us to understand the challenges that farmers face.

Besides software developers, our team consists of agricultural experts who have hands-on experience working with farmers across different scales, from small-scale to medium-scale operations. Their practical knowledge and understanding of the farming community greatly contribute to the design and improvement of our solutions. Furthermore, we have development finance experts on our team who ensure that climate financial opportunities align with our objectives.

Moreover, we have extension officers who are fluent in the local language, facilitating effective communication and feedback collection during regular outreach programs. This allows us to continuously receive feedback and gain insights into the specific needs and challenges of our target market.

More so, the involvement of the village council and headwoman in our community programs is also a crucial factor in receiving feedback from the community. With the endorsement from the village leadership, the locals easily accept us, which means we have established trust with the communities we serve.

Currently, our platform has 3125 users. About 60 percent of them comprises of youth and women farmers and agri-led SMEs

We are seeking support from MIT Solve to access valuable resources, including mentorship, technical expertise, media exposure, and business development assistance, that can help us scale our solution and make a greater impact. 

One of our key challenges is the shortage of talent, especially machine learning skills in Zambia, and we believe that being part of the MIT Solve community can help us overcome this obstacle. Additionally, we hope to leverage international partnerships to expand our service to other markets. Finally, we face financial limitations that hinder our ability to fund the project, and we believe that access to additional funding opportunities through MIT Solve can help us achieve our goals.

Our solution (EaseOnTrack) leverages the power of alternative data and machine learning to determine the creditworthiness of individuals seeking climate finance. Our solution is designed to empower even smallholder farmers with limited internet connectivity and technology, allowing them to manage their accounts using USSD technology or with the help of our extension officers

By integrating with mobile money, EaseOnTrack enables financial inclusion for those without bank accounts or track records, providing a pathway for individuals to access essential financial services.

Integrating extension officers as part of our solution(digital platform) is an innovative approach that addresses the digital divide and provides localized assistance. These officers serve as knowledgeable resources, offering personalized support, collecting feedback, and building trust with farmers. Additionally, by acting as mobile money agents, they facilitate financial inclusion, enabling farmers to access financial services conveniently through the platform. This comprehensive solution enhances the overall user experience and empowers farmers both technically and financially.

 Empowering farmers with timely weather information is paramount to their success. In collaboration with the Meteorological Department of the Government Ministry of Green Economy, weather forecasts are shared with `our` farmers through our extension officers and via SMS. By effectively incorporating weather data into their decision-making process, we pave the way for enhanced agricultural yields and mitigate the risks of poor harvests. Improved productivity not only secures livelihoods but also bolsters creditworthiness, amplifying opportunities for growth and prosperity. 

 EaseOnTrack: Redefining credit assessment, enabling climate financial inclusion, and empowering farmers for a brighter future without leaving anyone behind.

Our impact goals for the next year and the next five years are centered around empowering farmers, raising climate finance, and fostering collaboration. Here is our roadmap to achieve these goals:

Next Year (2024):

1.     Farmer Reach: Our target is to serve at least 10,000 farmers, a substantial increase from the current 3,250 farmers. We will achieve this by expanding our operations to new districts and intensifying our outreach efforts to engage and onboard more farmers.

2.     Climate Finance Commitment: We aim to raise USD 100,000 for climate finance for farmers to enhance their resilience. This funding will be secured through strategic partnerships, grant applications, and advocacy for climate finance initiatives. By connecting farmers with the necessary financial resources, we empower them to invest in climate-smart practices and technologies.

3.     Impact Assessment: A key focus for us is to observe demonstrated and documented evidence of how farmers' livelihoods and yields have improved after engaging with our platform. We will conduct rigorous monitoring and evaluation activities to assess the impact of our solutions on farmers' economic well-being, productivity, and climate resilience. This evidence will provide invaluable insights and further drive our efforts to refine and enhance our offerings.

Next Five Years (2024-2028):

1.     Farmer Impact: Our goal is to impact the lives of at least 100,000 farmers within the next five years. This will be achieved through the continued expansion of our operations to new regions, scaling up our outreach efforts, and building strong partnerships with farmer unions, cooperatives, and other relevant organizations.

2.     Climate Finance Enablement: We strive to enable at least $1,000,000 worth of climate finance over the next five years. This ambitious target will be accomplished through forging collaborative partnerships with social lenders, public institutions, climate finance initiatives, and other stakeholders committed to supporting sustainable agriculture and climate resilience.

3.     Collaboration and Partnerships: As a social enterprise, collaboration is crucial to our success. We will actively seek local and international partnerships with organizations that share our goals and principles. These partnerships will help us leverage resources, access expertise, and amplify our impact. Farmer unions, cooperatives, social lenders, and public institutions will be key collaborators as we work collectively toward our common mission.

By aligning our efforts with these impact goals, implementing a robust monitoring and evaluation strategy, and fostering collaboration through partnerships, we are confident in our ability to make significant strides toward empowering farmers, raising climate finance, and driving positive change in agricultural communities over the next year and the next five years.

We have implemented a comprehensive monitoring and evaluation strategy to measure our progress toward our impact goals. This strategy encompasses various key performance indicators (KPIs), data collection methods, and assessment frameworks to ensure accurate tracking and evaluation of our impact. Here are some of the ways we measure our progress:

1.     Farmer Reach: We monitor the number of farmers engaged with our platform on a regular basis. This includes tracking the growth in the number of registered farmers.

2.     Climate Finance Commitment: We closely monitor the amount of climate finance we raise for farmers. This includes tracking the funding commitments secured through partnerships, grants, and other financing mechanisms. We maintain detailed records of the financial support provided to farmers and the impact it has on their climate resilience.

3.     Impact Assessment: We conduct rigorous impact assessments to evaluate the outcomes and effectiveness of our interventions. This involves collecting data on various indicators, such as improvements in farmers' livelihoods, increased agricultural productivity, enhanced climate resilience, and adoption of sustainable practices. We employ a combination of quantitative and qualitative methods, including surveys, interviews, focus group discussions, and case studies, to gather data and measure the changes brought about by our platform.

4.     Financial Inclusion: We measure the extent of financial inclusion achieved among farmers. This includes tracking the number of farmers who have gained access to financial services through our platform, such as mobile money transactions, and loans. We assess their financial behavior and the impact of financial inclusion on their economic well-being.

5.     Collaboration and Partnerships: We evaluate the effectiveness of our collaborations and partnerships by assessing the outcomes achieved collectively. This includes measuring the extent of joint initiatives, the level of engagement with partner organizations, and the impact of collaborative efforts in achieving our shared goals.

By consistently monitoring these metrics and indicators, we are able to track our progress, identify areas for improvement, and make data-informed decisions to drive our impact goals forward. Regular evaluation and learning from our monitoring activities allow us to adapt and refine our strategies, ensuring that we maximize our impact and deliver meaningful change for farmers and agricultural communities.

Our impact-driven theory of change is designed to empower farmers and agricultural SMEs by providing them with a comprehensive digital finance platform solution that enables them to access climate finance while keeping proper financial farm operations records. By educating them about climate change, agricultural risks, and financial literacy, we equip farmers with the knowledge and skills to make informed decisions about their agricultural practices and become more resilient to the impacts of climate change. Our approach has yielded positive results, with 3750 trained farmers, each supporting at least 3 dependents, benefiting from improved record-keeping, creditworthiness, and agricultural productivity. Our ultimate goal is to reduce the negative impacts of climate change on farmers, increase their climate resilience, and enhance food security and agricultural productivity in the long run.

At the heart of our solution lies a combination of web technology, USSD technology, machine learning, and SMS capabilities. These cutting-edge technologies work in tandem to deliver a seamless and comprehensive user experience.

Our platform utilizes web technology as the primary means for users to access and interact with the platform. Through web-based interfaces, users can effortlessly save records, transfer money, and access a wealth of valuable information crucial to their farming activities.

To ensure inclusivity and reach farmers without internet connectivity, we leverage USSD technology. This technology enables users with basic 2G mobile phones to access our platform and avail of its functionalities without internet connectivity. By dialing specific codes on their mobile devices, farmers can conveniently manage their accounts, access critical services, and easily stay connected.

To revolutionize creditworthiness assessment, we employ machine learning algorithms. This advanced technology empowers our platform to analyze vast amounts of user data, extracting valuable insights and determining creditworthiness with remarkable accuracy. By leveraging machine learning, we provide users with fair and efficient evaluations, unlocking access to climate finance opportunities.

Complementing our core technologies is SMS technology, which plays a vital role in communication. We utilize SMS capabilities to send important information, updates, and notifications to users. This ensures that users stay informed, empowered, and connected even in areas with limited internet access.

By harnessing the power of web technology, USSD technology, machine learning, and SMS capabilities, our solution combines accessibility, data-driven insights, and effective communication to revolutionize how farmers access financial services and make informed decisions.

We wholeheartedly embrace the principles of diversity, equity, and inclusivity as core values that shape our culture and policies. We firmly believe that everyone deserves equal access to resources and opportunities, regardless of factors such as race, sexual orientation, gender, or background. Our commitment to these principles extends beyond mere words; it is reflected in tangible actions and policies that foster a truly inclusive work environment.

To begin with, we have explicitly outlined diversity, equity, and inclusivity as part of our company policies. We consider any violation of these principles as a dismissible offense, demonstrating our unwavering commitment to upholding these values at all levels of the organization.

In our recruitment process, diversity is actively and intentionally considered a crucial factor. We recognize that a diverse team brings together unique perspectives, experiences, and talents, fostering innovation and ensuring that our solutions cater to the needs of a broad range of individuals and communities. By prioritizing diversity in our hiring practices, we strive to build a team representative of the diverse world we serve.

Furthermore, our approach to diversity, equity, and inclusivity extends beyond recruitment. We foster an inclusive work environment where individuals are valued and respected, and their voices are heard. We actively promote open dialogue, collaboration, and a culture of respect and empathy. By providing equal opportunities for growth, professional development, and advancement, we create a level playing field where everyone can thrive and contribute their best.

We understand that true diversity and inclusion require ongoing efforts and continuous learning. We encourage ongoing education and awareness of diversity, equity, and inclusivity among our team members. By promoting an atmosphere of empathy, understanding, and acceptance, we cultivate a work environment that celebrates diversity and champions equal rights and opportunities for all.

In summary, diversity, equity, and inclusivity are not just buzzwords for us; they are the very foundation of our work. We are committed to creating a workplace where individuals from all backgrounds can flourish, and our solutions are designed to serve and empower a diverse range of users. Through our policies, recruitment practices, and inclusive work environment, we strive to embody and promote diversity, equity, and inclusivity in everything we do.

Our business model caters to both B2C and B2B segments, serving smallholder farmers and Agri-SMEs alike. With a versatile approach, we offer two primary revenue streams: freemium and subscription models. Users can access our platform for free with basic features, or they can choose to subscribe at an affordable rate of USD 8 per month, unlocking additional premium functionalities and benefits.

Furthermore, recognizing the importance of collaboration, we extend our services by leasing our solution to organizations and institutions that work closely with farmers. They can leverage our platform and creditworthiness algorithm, customized with their branding, to enhance their own offerings and provide value-added services to their stakeholders.

In addition to these revenue models, we believe in fostering partnerships with extension officers who play a vital role in supporting farmers. We have implemented a revenue-sharing model that rewards these dedicated professionals. For every subscription made by the farmers they manage, extension officers receive a percentage of the revenue, incentivizing their active involvement and promoting mutual growth.

Through this comprehensive and inclusive business model, we aim to empower farmers, enable financial sustainability, and foster fruitful collaborations within the agricultural ecosystem.

Our plan for achieving financial sustainability revolves around several key strategies that ensure the long-term viability of our platform, EaseOnTrack.

First and foremost, we are focused on optimizing our revenue generation by managing our operational costs efficiently. By aligning our expenditures with the revenue we generate, we maintain a balanced financial structure that allows us to sustain our operations and continue delivering value to our users.

A significant part of our financial sustainability plan involves licensing out EaseOnTrack to other organizations. By offering our platform to these entities, customized to meet their specific needs and branded with their identity, we create a mutually beneficial partnership. This not only generates revenue through licensing fees but also expands our reach and impact, making EaseOnTrack a widely adopted solution across different sectors and regions.

In addition to licensing, subscriptions play a vital role in our revenue model. We offer a freemium model where users can access basic features for free, while premium functionalities are unlocked through a subscription at an affordable price. This subscription-based approach ensures a consistent income stream and provides users with added value, further solidifying their commitment to our platform.

Furthermore, we recognize the importance of strategic investments and grants to support our expansion plans. By seeking additional funding, we can accelerate our growth, reach more areas, and invest in research and development to continuously enhance our platform's capabilities.

Overall, our path to financial sustainability entails a well-balanced approach. We generate revenue through licensing, subscriptions, and prudent cost management. Simultaneously, we actively seek investment and grants to fuel our expansion and innovation efforts. By implementing these strategies, we aim to achieve a strong financial foundation that sustains the growth of EaseOnTrack while making a lasting positive impact on the lives of smallholder farmers and Agri-SMEs.

Our plan to achieve financial sustainability has already yielded promising results, as evidenced by the following successful milestones:

1. SEED Fund and Prize Money: We secured a SEED fund from the United Nations Development Programme (UNDP) through the UNDP Accelerator Lab. This initial funding injection validated our concept and provided us with the necessary resources to kickstart our operations. Additionally, receiving prize money from the MTN Momo Financial Inclusion Hackathon further demonstrated the value and potential of our solution.
2. Licensing Success: We successfully leased out EaseOnTrack to one organization that works closely with farmers. Through a revenue-sharing model, this partnership allows us to generate consistent income from the licensing fees. This achievement highlights the attractiveness and scalability of our platform, driving revenue generation and expanding our reach to new organizations.
3. Freemium to Subscription Migration: We have achieved an impressive migration rate from the freemium to the subscription model. Currently, 55 percent of our users have transitioned from accessing basic features for free to subscribing to the premium functionalities. This transition showcases the value users perceive in our platform and their willingness to invest in enhanced services, generating sustainable revenue streams.

These examples demonstrate the effectiveness of our financial sustainability plan. The SEED fund and prize money provided initial support, while our successful licensing agreement and significant migration rate to the subscription model solidify our revenue generation capabilities. These achievements validate the appeal and impact of EaseOnTrack, positioning us on a path toward long-term financial sustainability.

As we continue to execute our plan and explore further opportunities for investment, licensing, and partnerships, we remain committed to ensuring the financial viability and growth of our platform, ultimately empowering farmers and contributing to the advancement of agricultural practices worldwide.