Data, Tech Improve Productivity, Credit Access for Africa’s Smallholder Farmers

Smallholder farms make up over 60% of sub-Saharan Africa’s population, according to data from McKinsey, yet only about 20% of this region’s gross domestic product (GDP) is generated from agriculture and agribusiness.

These figures reflect the inefficiencies and the challenges smallholder farmers face in the sector — particularly the lack of financial resources to ensure steady food production, which, over time, have contributed to high levels of food insecurity across the region.

To unlock Africa’s full agricultural potential, Uka Eje, CEO of Nigeria-based AgriTech firm ThriveAgric, said more needs to be done to change the views of Africa’s small growers.

“To solve food scarcity, production has to be consistent, it has to be sustainable — and to make production sustainable, smallholder farmers have to see farming beyond just a lifestyle, they have to make money from it,” Eje told PYMNTS in an interview.

Founded in 2017, the Lagos-based AgriTech firm started off by putting rural small farmers in community clusters, giving them access to phones and then offering them input financing to help scale their business.

Beyond that access to capital, Eje said it was also important to ensure that farmers employed modern practices to be able to scale yield, as well as help them access premium markets by bridging the supply chain gap and limiting the number of middlemen farmers have to engage with.

Today, the firm has more than 205,000 farmers — up from 50 in 2018 — registered on its agriculture operating system (AOS) and about 1,500 field officers based in over 20 states across Nigeria that visit growers regularly to monitor growth and track harvest.

With a recent $56.4 million raise to grow ThriveAgric’s customer base and expand to additional African markets including Ghana, Zambia and Kenya, the business continues to show huge potential for growth.

Data Is King

Over time, the Africa-focused company has amassed large data sets in its AOS which have the potential to unlock huge opportunities for increased farming productivity and credit access for smallholder farmers — many of whom do not have credit histories to qualify for funding.

“We want to be able to make sure that these smallholder farmers are made credit worthy. This is something that financial institutions across the world expect,” Eje said, adding that the company’s goal is to leverage technology to give smallholder farmers an identity.

Information gathered include farmers’ biometric data, their land size, inventory of the inputs given to them, their historicals on farming — including their past farming techniques — as well as the crops that they farm and information around family history.

With that data, on-ground field officers can make informed input financing decisions that not only help to free up farmers’ cash flows, but also create a feedback system that can enable offtakers to plug supply chain inefficiencies by matching supply with demand, even a year ahead.

“Imagine if an offtaker [knows] that ThriveAgric is able to give me 20% of my maize needs or my sorghum needs for the year?” Eje pointed out, adding that that knowledge will significantly ease the burden on farmers operating in the complex and fragmented Nigerian goods market.

ThriveAgric can also leverage its technology and “valuable” AOS data to reinforce partnerships with financial institutions who will be more open to funding credit-worthy farmers when there’s traceability, financing and visibility in the end-to-end movement of goods and commodities.

“Data is extremely valuable,” Eje said. “We are leveraging it not just as a piece of information, but also as an infrastructure for our services.”

 

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