Agriculture is the main source of livelihood for people in the world having most surviving on less than $1.25 per day. In Africa, 70 percent of the total amount of food consumed is obtained from the small holder farmers, thus making them a critical factor within the African economy considering the drastic population growth increasing the demand for food.
Small holder farmers are increasingly becoming the most sought-after group of farmers by multinational companies in a bid to satisfy the demand of food and provide a secure sustainable supply of their products. However, small holder farmers are faced with a myriad of challenges the main factor being lack of funds to grow their farm and expand their farming projects. They are unable to source for funds directly from the banks, as banks are yet to set themselves in a position to serve small holder farmers effectively. For banks to serve small holder farmers effectively, they are required to have flexible products to meet the cash-flow system of farmers, develop alternative asset security and mitigation of risks to determine the farmers portfolio and how well they can pay back their loans.
Farmers have been left to seek niched banks such as microfinance banks and sacco’s to get loans as it becomes much easier for them as the niched banks mainly partner with NGOs. However, the niched banks are limited in terms of their distribution and restrictive product terms making it a challenge for the small holder farmers. This leaves small holder farmers with no where to turn to, despite the fact that Agriculture is the main sector that is to alleviate poverty in Kenya and solve the issue of hunger facing African countries.
THE MAIN PROBLEMS AFFECTING SMALL HOLDER FARMERS
- Limited access to bank credit: the banking industry view farming as a much risky sector.
- Lack of formal value-chain finance
- Complicated land laws and tenure systems limit the use of land as collateral making financing agriculture unattractive to the formal banking industry.
- Inadequate financial and marketing skills to meet the quality standards set by fresh produce markets and food processors.
- Entrepreneurial capacity gaps.
- Large post-harvest losses.
- Lack of a consistent and reliable market to facilitate proper planning.
THE NEED AND MARKET OPPORTUNITY FOR SMALL HOLDER FARMERS
There is a high need for small holder farmers as illustrated by multinationals seeking to get their produce from them and there is a whole large market opportunity awaiting small holder farmers. The need and market opportunity for small holder farmers is illustrated by:
- The need to meet increased demand and therefore buyers are cultivating small holder farmers sources who grow specific crops in a bid to diversify the supply as they increase production.
- Small holder farmers have the capacity to feed nations when provided with the right resources to improve productivity and market links to sell their produce.
- Small holder farmers constrained by low productivity often lead to unhealthy tactics that end up destroying the ecosystem around them ending up destroying the environment at large.
- Provided with access to credit and finances small holder farmers have the capability of improving their livelihood and the environment and thus spreading the benefits throughout the value chain.
CROWDY AGRITECH LTD
Crowdy Agritech is an Agritech startup company based in Nairobi, Kenya that has embraced the use of technology to address the main challenge facing small holder farmers which is the lack of funding for their farm projects. Crowdy Agritech aims at addressing this major challenge by linking small holder farmers and agribusiness enterprises to crowd funders, using a joint venture model known as the peer to peer model through our android phone mobile app and website application.
Our main goal is to participate at all stages in agricultural value chain through provision of information on inputs supply, available production technologies, post-harvest handling and marketing of the produce as well capacitate our farmers by training them in the best practices of the entire value chain.
One of the biggest problems we are solving is to ensure those non-bankable farmers but with economical sound projects are able to receive financing through our model and achieve the following objectives:
- Leverage on technology
- Link farmers with inputs, expert advice and markets
- Provide sufficient financial access through crowd funding to the farmer to enable continued production and contribute to the well-being of the community.
- Use of modern technology, knowledge and skills in ways that suit local conditions and capacity
- Produce sufficient high-quality and safe food
- Provide capacity building for Farmers and develop bankable business proposals
CROWDY AGRITECH SOLUTIONS TO ADDRESSING THE DEMAND OF SMALL HOLDER FARMERS
- Facilitate access to funding through crowd funding and scale up social lending though our peer to peer model.
- Link farmers with input suppliers, agricultural experts and reliable markets.
- Use of modern technology, knowledge and skills that suit local conditions and minimizes on post-harvest losses.
- Provide capacity building for farmers and develop bankable business proposals.
- Provide agricultural insurance to mitigate on production and harvest risks.
OUR PEER TO PEER BUSINESS MODEL
To meet our goal and objectives, Crowdy Agritech has established a way to ensure that small holder farmers no longer have trouble accessing funds. This will be made possible via our crowdfunding website and mobile application, where small holder farmers with great ventures and projects are able to get financing for their projects using our peer to peer model.
The platform will act as a crowdfunding platform linking investors with the farmers directly therefore, removing the barrier of farmers having to access the funds from a bank, where they are not granted as much money required to boost their projects.
We eliminate the paperwork from farmers by having them enroll into our system and setup their projects and upon approval, investors seeking to sponsor a farm, are able to invest in the farm getting some percentage in interest from their investment. We are able to take care of the farmers paperwork enabling them to focus on increasing the productivity of their farms. Through our peer to peer lending system, multiple investors are able to invest on one project enabling us to raise a good amount of money for the farm and farmers are able to receive the funding instantaneously thus eliminating the need for waiting like in banks. Once the farmers projects have grown, we are able to link them to the market, by marketing their produce directly to local and international markets which previously was a challenge for them as individuals
We are able to mitigate unexpected risks that may occur within the timeline of any project by insuring the projects with an insurance company. Thus, reducing the risks and enabling investors get value for their money.
THE BENEFITS OF OUR PEER TO PEER MODEL
- Farmers are able to receive funding directly from the investor without any delay
- Farmers get flexible systems that work with their cash-flow, since most farmers get returns upon harvest.
- Investors are able to fund multiple projects at a go without any limitation.
- Insured system for the investors as all risks are taken care of by an insurance firm.
MARKETING PROMOTION STRATEGIES
To ensure we reach as many farmers as possible and provide our funding solutions to them as well as provide investment opportunities through our peer to peer model, we will seek to generate leads using the following promotional strategies:
- Agricultural trade fairs.
- Agricultural-based social media platforms such as Facebook and LinkedIn.
- Crowdy Agritech website.
- FM stations and TV platforms e.g. Farmers TV & Wakulima TV Signet stations
- Referrals: word of mouth will be our key promotion strategy.
MARKET DIFFERENTIATION AND POSITIONING
Reliability: – We will deliver services of a consistent quality.
Service: – We will focus on customer satisfaction.
Design: – We will design the look and feel of our offering to stand out in the market place.
Relationships: We will nurture customer relationships and ensure everything in the organization is customer driven.
Technology: – We will leverage on our innovative App and ensure we are constantly improving