Webinar Recap: Digital technologies helping farmers access finance

Generation Africa and VC4A – on 13th April 2023 – held a webinar on digital technologies helping farmers access finance which had over 100 attendees comprising youth agripreneurs and stakeholders supporting youth along the value chain. The webinar provided a platform for stakeholders to deliberate on some of the existing challenges young agripreneurs face while securing finance, digital tools helping farmers access finance and showcase some of the GoGettaz digital technologies helping farmers access finance.

GoGettaz finalists Tafadzwanashe Gavi, Founder Umojalands Systems, Zimbabwe and Daniella Kwayu, Founder Phema Agri, Tanzania shared insights of how their innovations are facilitating access to microfinance and insurance services to farmers, their business model and how they are derisking the agri-food value chain.

Major barrier

Access to credit is one major barrier to youth agripreneurship. To date, young farmers continue to decry of existing challenges in securing finance from formal financial institutions due to stringent rules, lack of collateral security and preference to short-term lending yet agriculture investments have long gestation periods. Agriculture is also considered a risky venture because it is vulnerable to climate shocks and lending to youth is also perceived as risky because they are new entrants into business and do not have an established credit history.

Today, digital technologies in agriculture exist that are providing farmers with financial and advisory services; market linkages, supply chain management and agricultural data using the mobile phone. Credit risk guarantee schemes are also gaining traction because financial institutions are covering the risk when lending to youth agripreneurs. In addition, different stakeholders working with youth are offering technical assistance to youth-led agribusiness to make them more eligible for financing.

Tafadzwanashe Gavi- Founder Umojalands Systems

Lack of collateral security hinders rural small-holder farmers from accessing finance from formal financial institutions, yet they are the ones at the center of agricultural production. Tafadzwanashe Gavi has developed the Umojalands systems, an online platform that connects farmers to farmlands, out-grower schemes and financiers using the farmer digital identity which generates a credit score for every farmer  which financial institutions use to determine the amount to lend to them. The agronomy box which is also available on the platform helps farmers manage risk associated with climate change using satellite imagery and visual evidence by giving  recommendations on how they can increase their production.

Financial institutions instead of moving around to outsource loans can use the farmer’s credit score to offer credit; this has led to easy and quick disbursement of loans  and reduced default loans. 

Gavi advised agripreneurs eyeing this year’s GoGettaz Agripreneur Prize Competition  to ensure they know the problem they are solving in the value chain, get the right skills and harness funding opportunities such as grants, competitions and be passionate about their work.

Daniel Kwayu- Founder Phema Agri

Phema Agri, is an integrated crowdfunding platform developed by Daniela Kwayu that connects de-risked, vetted, trained and market farmers looking for financing from investors. In return farmers share their profits with investors. Its ‘Lunga’ farm management platform capacity builds farmers on different techniques to increase productivity and connect them to markets where they get inputs at an affordable price.

The crowdfunding platform enhances farmers visibility to financiers and investors while financier’s receive a  data driven portfolio of farmers  whom they can invest in. The data also helps to identify gaps in the ecosystem.

Crowdfunding as a business model is not regulated in Tanzania however, there is a proposed policy which is in its final stages; this affected Phema Agri operations because initially they started off as a crowdfunding platform to unlock opportunities for farmers by seeking liquidity funds from different stakeholders interested to support farmers. Despite this setback, the startup took the opportunity of offering technical assistance to farmers to enable them to be bankable hence eligible for financing.

For agripreneurs eyeing this year’s GoGettaz Agripreneurs Prize Competition, Kwayu advises them to understand their agr-business well, value proposition, risks involved and how to mitigate them.

2023 GoGettaz Agripreneur Prize Competition

The annual GoGettaz Agripreneur competition by Generation Africa will be launched on 5th May 2023. The competition recognizes outstanding youth agripreneurs who are revolutionizing agriculture in Africa and is open to youth aged 18-35 and have registered their enterprises. Two entrepreneurs (male and female) who have the most innovative and scalable business models will each receive an award of $50,000. Additionally,  four other young agripreneurs who will be awarded under the impact category will receive a cash prize of $2,500.  The key dates for the  competition will be announced  during the launch. 

Opportunity: Share your agribusiness journey with the GoGettaz Community and it will be published

Are you a youth agripreneur transforming Africa’s food systems and would like to be featured on the GoGettaz community platform. This is definitely a good visibility opportunity for your startup and will help promote learnings on successful models of youth agripreneurship.  Register today at:  : https://gogettaz.vc4a.com/blog/2023/03/27/get-featured-share-your-agribusiness-journey-with-the-gogettaz-community/

Here is a recap of the webinar proceedings!