DIGITALIZING AGRI-

FINANCE SOLUTIONS

African Development Bank

12 July 2016

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

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

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%

C3 – Confidential | 12 July 20165

Drivers of Agriculture Development...

The Agri

Opportunity

Land &

Water

Access to Finance

Labour & Skill

Access to Markets

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

C3 – Confidential | 12 July 20167

Lenders are concerned about two risk domains

PRODUCTION RISKS

MARKET RISKS

C3 – Confidential | 12 July 20168

Through the lenses of the lenders

C3 – Confidential | 12 July 20169

Through the lenses of Market Off-takers

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

C3 – Confidential | 12 July 201611

Mobility is Africa’s DNA

C3 – Confidential | 12 July 201612

Agriculture

Education

Health

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

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

C3 – Confidential | 12 July 201615

Migrate from paper to digital

Paper Mobile Farmer Activity

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

C3 – Confidential | 12 July 201617

Access to Finance

Identify Risk

Quantify Risk

Mitigate Risk

Decrease Risk

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

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

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

C3 – Confidential | 12 July 201623

Access to Information:

Support better decision making.

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)

C3 – Confidential | 12 July 201625

Access to Markets:

Establish Trust and Assure Quality

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

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

C3 – Confidential | 12 July 201629

ICT Adjusted Risk Profile

12880

33%128

80

0

Farmer Risk Profile ICT mitigated Farmer Risk Profile

Thank You