As a small holder farmer, how can you access quality farm inputs and operating cash on time? You should consider subscribing to the Agri-wallet, an innovative fintech farmers’ loan app in Kenya and Rwanda. 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 using their cell phones.
Using seeds, fertilizer, and agro-chemicals and paying for labor on time can improve your farm profits. It is a common reason why farmers in the region generate low yields for food and sale. It affects many rural farmers in small-scale production. Their cash flows are irregular and unpredictable. In Kenya, 31 % of the rural population can not access formal financial services like a bank account. Their operations are informal, as they do not keep any records or use farm accountancy they cannot convince providers while they are in need for agriculture credit or insurance. As a result, only 4% of total lending in the country finances the agriculture sector.
Agri-wallet is a digital finance service solution to these challenges
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 one of the most innovative farming app. It is by Dodore Kenya Limited, a company that 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