digitalizing agri- finance solutions · 2019. 6. 29. · 18 c3 –confidential | 12 july 2016...
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DIGITALIZING AGRI-
FINANCE SOLUTIONS
African Development Bank
12 July 2016
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C3 – Confidential | 12 July 20162
AfDB’s high five strategy
Light up
and power
Africa
Integrate
Africa
Industrialise Africa
Improve quality of
life for the people of
Africa
Feed
Africa
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C3 – Confidential | 12 July 20163
Underpinning the “Feeding Africa” Pillar with Technology
A plan to boost agriculture production
in Africa to achieve Nutrition Security
for its 1 billion people
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C3 – Confidential | 12 July 20164
AfDB’s “Feed Africa” agenda has a 10 year horizon…
2016 2025
BHAG
“100% Food Security &
Zero % Food Imports”
By 2025
Normal
Trajectory
Accelerating the Development
Trajectory through ICT
2022
30%
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C3 – Confidential | 12 July 20165
Drivers of Agriculture Development...
The Agri
Opportunity
Land &
Water
Access to Finance
Labour & Skill
Access to Markets
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C3 – Confidential | 12 July 20166
5%Commercial
Finance goes to Agriculture
Agriculture contributes 25% to
Africa’s GDP
Only 5% of commercial finance goes to agriculture
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C3 – Confidential | 12 July 20167
Lenders are concerned about two risk domains
PRODUCTION RISKS
MARKET RISKS
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C3 – Confidential | 12 July 20168
Through the lenses of the lenders
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C3 – Confidential | 12 July 20169
Through the lenses of Market Off-takers
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C3 – Confidential | 12 July 201610
Reducing risks on the producer side
Risk Mitigation
Advisory & Extension Services
Innovation
to Improve Yield
Infrastructure
Integrated Value Chain
with Off-Takers
Greater Risk Bearing Finance
(Public Money)
Technology use &
Adoption
Produce Insurance
Training 4 Skills
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C3 – Confidential | 12 July 201611
Mobility is Africa’s DNA
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C3 – Confidential | 12 July 201612
Agriculture
Education
Health
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C3 – Confidential | 12 July 201613
Support Better Decision Making
Access to Information
Establish Trust and Assure Quality
Access to Markets
Subsistence to Economic Active
Access to Finance
Transforming Value ChainsIncrease Agriculture Productivity
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C3 – Confidential | 12 July 201614
To transform Agriculture Value Chain knowing your farmer is
key…
Input Supplier
Government &
Finance
Farmer Off-taker Nestle Retailer Consumer
Cloud
Mobile
Money
Enterprise
Mobility
Mezzanine
loT
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C3 – Confidential | 12 July 201615
Migrate from paper to digital
Paper Mobile Farmer Activity
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C3 – Confidential | 12 July 201616
Register & Contract
smallholder farmer
Native Application & USSD
(24/7)
Analyse
Web ( 24/7)
1
2
Portfolio of Agriculture Services
Web Application
(24/7)
Manage the Entire
Ecosystem
Entity: Farmer
Details: SiphoTshalili
Crop Type: Coffee
Size: 1 acre
History: Good
Entity: Farmer
Details: Sipho Tshalili
Crop Type: Coffee
Size: 1 acre
History: Good
Entity: Buying Centre
Details: Co-operative
Crop Type: All
Size: Medium
History: 2 years
Entity: Farmer
Details: Judy Njoki
Crop Type: Nuts (Macadamia)
Size: 2 acre
History: Good
Entity: Farmer
Details: Charles Kimani
Crop Type: Coffee
Size: 1 acre
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C3 – Confidential | 12 July 201617
Access to Finance
Identify Risk
Quantify Risk
Mitigate Risk
Decrease Risk
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C3 – Confidential | 12 July 201618
Farmer
Agri Business
Digital Market
Path toMarket
Input Supply
Finance, credit and insurance
Information
Farmer Empowerment at the centre Agriculture Ecosystem
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C3 – Confidential | 12 July 201619
Connected Farmer Platform
Farmer
AgriBusiness & Field Officers
Registration
Profiling
Bus Analytics
Maintenance
SMS Notifications
Farmer Queries
Tracking & Loading
Data Collection
Loan Management
Cashless Vouchers
Payments
Delivery Receipts
DATA
MANAGEMENT
TRANSACTION
MANAGEMENT
TWO WAY
COMMUNICATIONS
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C3 – Confidential | 12 July 201620
2
Register
Agro Dealer &
Voucher
Categories
1
Register
Farmer
eVoucher Management
3
Issue
e-Voucher
4
App Web SMS App
Redeem
e-Voucher
at Agro Dealer
5
Recon between
MoA
and Agro Dealer
Web
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C3 – Confidential | 12 July 201623
Access to Information:
Support better decision making.
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C3 – Confidential | 12 July 201624
1
Register & Contract
smallholder farmer
USSD
(24/7)
2
web
(24/7)
Store Officer record
produce receipt
3
QC Inspector does
Germination and Purity
tests. SMS results to
farmer
web
(24/7)SMS 4
Farmer purchase goods
on loan account linked to
contract value
USSD
(24/7)
5
Monthly payment
instructions
(m-pesa*)
SMS
(monthly)
6
Cooperative
management
has real-time visibility
on all activities
web
(24/7)
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C3 – Confidential | 12 July 201625
Access to Markets:
Establish Trust and Assure Quality
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C3 – Confidential | 12 July 201626
1
Register & Contract
smallholder farmer
Native
Application
& USSD (24/7)
5
monthly payment
instructions
(m-pesa*)
SMS & USSD
(monthly)
6
Cooperative
management has
real-time visibility on
all activities
web
(24/7)
3
Communicate
volume, qaulity and
price to farmer.
SMS
(3x daily) 4
farmer purchase
goods
on loan account
linked to contract
value
Native
Application
(24/7)
2
Native
Application
(x3 daily)
Milk Grader record
production at
collection point
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C3 – Confidential | 12 July 201628
0
2
4
6
8
10
12
14
16
Changes in Socio-PoliticalSituation
Changes in Farmer FamilySituation
Inability to meet contractualObligations
Theft
Labour Unrest
Changes in Land Price
Excessive Rainfall
Natural Disasters
DroughtLack of skill impacting yield
unexpected variability in ProductPrices
Increases in Input Costs
Lack of access to market
Product Pershing due to lack ofstorage facilities
Deseases and Pests on Plants
High Levels of Debt
Changes in Interest Rates
Risk Profile ICT Mitigated Risk ProfileSmallholder Farmer Risk Profile
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C3 – Confidential | 12 July 201629
ICT Adjusted Risk Profile
12880
33%128
80
0
Farmer Risk Profile ICT mitigated Farmer Risk Profile
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Thank You
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