Smallholder farms make up more than 60% of the population of sub-Saharan Africa, according to data from McKinsey, but only about 20% of the region’s gross domestic product (GDP) is generated by agriculture and agribusiness. industry.
These figures reflect the inefficiencies and challenges faced by smallholder farmers in the sector, particularly the lack of financial resources to ensure stable food production, which over time has contributed to high levels of food insecurity. In the region.
To unlock Africa’s full agricultural potential, Uka Eje, CEO of Nigerian company ThriveAgric, said more needs to be done to change the perspectives of African smallholder farmers.
“To solve the food shortage, production has to be consistent, it has to be sustainable – and to make production sustainable, small farmers have to see agriculture as more than just a way of life, they have to derive value from it. ‘money,” Eje told PYMNTS in an interview. .
Founded in 2017, the Lagos-based company AgriTech started by grouping small rural farmers into community clusters, giving them access to phones and then providing input finance to help them scale their business.
Beyond this access to capital, Eje said it was also important to ensure that farmers use modern practices to be able to increase yield, as well as helping them access high-end markets by filling the gap. gap in the supply chain and limiting the number of intermediaries that farmers have to engage. with.
Today, the company has over 205,000 farmers – up from 50 in 2018 – registered on its Farming Operating System (AOS) and around 1,500 field agents based in over 20 states in Nigeria who regularly visit growers. to monitor growth and monitor harvest.
With a recent increase of $56.4 million to grow ThriveAgric’s customer base and expand into other African markets including Ghana, Zambia and Kenya, the company continues to show tremendous growth potential.
Data is King
Over time, the Africa-focused company has amassed vast datasets in its AOS that have the potential to unlock huge opportunities for increased agricultural productivity and access to credit for smallholders. farmers – many of whom do not have a credit history to qualify for financing.
“We want to be able to ensure that these smallholder farmers are creditworthy. This is something that financial institutions around the world have been waiting for,” Eje said, adding that the company’s goal is to leverage technology to give identity to smallholder farmers.
The information collected includes farmers’ biometrics, the size of their land, the inventory of inputs given to them, their background on farming – including their past farming techniques – as well as the crops they grow and family history information.
With this data, field agents in the field can make informed input financing decisions that not only help free up cash flow for farmers, but also create a feedback system that can enable buyers to fill gaps. supply chain inefficiencies by matching supply to demand, even one year ahead.
“Imagine if a buyer [knows] that ThriveAgric is able to give me 20% of my corn needs or my sorghum needs for the year? Eje emphasized, adding that this knowledge will greatly ease the burden on farmers operating in the complex and fragmented market for Nigerian produce.
ThriveAgric can also leverage its “valuable” AOS technology and data to strengthen partnerships with financial institutions that will be more open to financing creditworthy farmers when there is traceability, financing and visibility in the movement of end to end of goods and raw materials.
“Data is extremely valuable,” Eje said. “We use it not only as information, but also as an infrastructure for our services.”
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