Agribyte: Agri-wallet, Fintech Solution for Smallholder Farmers in Kenya
Timely access to farm inputs and operating cash is crucial for higher farm yields. This is for buying quality seeds, fertilizer and agro-chemicals and pay for labour. Without access to them, farmers generate low food and income for their families.
This is practically impossible for the majority of rural smallholder farmers globally. Their cash flows are irregular and unpredictable. In Kenya, 31 % of her rural population is excluded from accessing formal financial services like a bank account. Their operations are informal without any record-keeping, collateral or farm accountancy to support their need for agriculture credit and insurance. As a result, it is around 4% of total lending in the country that finances agriculture sector. Agri-wallet is a digital finance service solution to these challenges
Agri-wallet is an innovative fintech solution for farmers in Kenya. It uses blockchain technology and provides business accounts for farmers, buyers and input suppliers. They can use these to save, buy, earn or pay for farm inputs or farm commodities
How Agri-wallet works
Agri-wallet has three types of users; farmers, farm commodity traders and input suppliers or the agro-dealers.
Farmers in pre-selected value-chain can sign up for an Agri-wallet account for free. When a farmer gets paid by a registered commodity trader, they can withdraw their full or partial payments to Safaricom M-Pesa a mobile money wallet in Kenya. They can also save redeemable tokens in their Agri-wallet account.
These “savings” are redeemed at a registred input supplier shop or agro-vet (merchant). You can only buy farm inputs such as certified seeds, pesticides or fertilizer using your savings in a voucher system. In case you have exhausted your balances, you can access a short-term overdraft from Agri-wallet payable within six months.
Buyers; (food and commodity traders, out-growers) can use Agri-wallet to pay their contracted farmers for deliveries. They can also access working capital overdrafts earmarked to pay farmers on time. After-sales, buyers will compensate for the value of the overdraft loan. the charged interest is payable to Agri-wallet at a later date.
Input providers are vetted to join the Agri-wallet network of suppliers. They earn fees when farmers buy inputs using their saved tokens. An agro-dealer may apply for an overdraft from the Agri-wallet earmarked for purchasing inventory.
Impact to Date
According to a 2020 case study, Agri-wallet had registred 25,000 farmers in Kenya and partnered with over 50 produce buyers and over 100 input providers. The yield for registred farmers had increased by up to to 115% while their net incomes rose by up to 70%. Buyers are able to attract and retain suppliers improving on their reputation. Input suppliers reported a net income uplift of 18% on average according to the same study.
Agri-wallet is an innovation by Dodore Kenya Limited. The company provides financial inclusion mobile solutions for the majority of people at Base of Pyramid including small scale farmers. The firm has offices in Kenya, Rwanda and the Netherlands.
The fintech solution has attracted reputable partners including Netherlands Development Organisation (SNV), the Mastercard fund, Rabobank Foundation, International Fertilizer Development Center, and Technoserve. The future plans of Agri-wallet involve scaling-up in Kenya and expand to over a dozen countries in Africa, Asia, and Latin America