Technology firm Mobipay has launched a system that it says will elevate farmers’ record-keeping and improve access to credit.
Agrilife targets the rural farmer who has no access to banking services and aims at automation of transactions, which it says will help users go past the barrier of poor records.
Thin records have been a hurdle for many small-scale farmers when applying for funds for expansion.
“Agrilife is geared towards alleviating the challenges associated with agrifinance in Africa.
The platform seeks to create an environment for innovative financial products that encourage sustainable farming,” said Felix Musau, the CEO of Mobipay.
Mobipay Ltd becomes the latest IT firm to unveil a platform linking farmers to financial institutions and other service providers such as agrovets.
Farmers will access the service in groups where their records including harvests, deliveries to the market, purchase of inputs, and all payments will be reflected in a financial institution’s system via the phone using a short code.
Such records will help the users when applying for loans or buying an insurance cover.
Just launched, the firm has registered two farmer groups in Nyeri and targets 100,000 users by end of first quarter, the firm says.
ICT is increasingly improving credit access in rural areas where government departments, commercial banks, microfinance institutions, traders, telecoms companies, community-based organisations — provide services like credit, savings, insurance, transfers, and payments on IT platforms.
Agrilife is based on cloud-based service technology and enables records and transaction automation, raising the profile of users, offering them chances of faster assessment of loan applications.
Lower interest rates
Mobipay says other than access to credit, through the service the farmers will be able to save and get insurance while buying inputs .
The reduced lending risk is expected to not only speed up the loan processing but also lead to lower interest rates.
Small-scale farmers have been raising concern over the requirement they provide tight records to qualify for bank loans, a requirement that proponents attribute to risk classification, which is a key step by any lender.
Farmers will get the service for free but the banks and MFIs will pay Mobipay per contract with the farmers.
Other than Kenya, it is eying farmers in Tanzania, Uganda and Rwanda, who are members of the East African Community bloc.
Mobipay joins other companies such as Kenya Agriculture Commodity Exchange (KACE), M-farm Ltd, UAP Insurance and Safaricom that have come up with products targeting farmers with services to improve production.
MFarm Ltd , a software solution and agribusiness company for has a solution where they SMS a short code to get information pertaining to the retail price of their products, buy their farm inputs directly from manufacturers at favourable prices, and find buyers for their produce.
The Kenya Agriculture Commodity Exchange (KACE) plan makes farmers to access prices of commodities on mobile phones, boosting negotiations for better rates.
It is one way farmers are gaining bargaining power of an increasing global economy.
Farmers have also go their seeds and fertilisers insured using services accessible on mobile phone.
Safaricom and UAP Insurance have partnered to ease the process of buying insurance products where the businesses can buy insurance policies from agro-dealers.
The agro dealers are equipped with a camera phone that scans a special bar code at the time of purchase of inputs, which immediately registers the policy with UAP Insurance over the Safaricom’s mobile data network.
The phone software then sends a text message confirming the insurance policy to the farmer’s mobile phone.
Farmers are also able to get weather alerts or market prices using new mobile commerce tools.
Claims are paid by the insurer if there is a major change in weather patterns —too much or too little rainfall, temperature or wind patterns — that affects yields.