Robert Kipkemoi offloads cans of milk from his motorbike at a milk chilling facility before speeding off for another trip of delivery.
A milk transporter, Mr Kipkemoi has a long queue of dairy farmers whose fresh milk must be delivered to the chilling centre before noon.
“In a day I can deliver 600 litres of milk,” says Mr Kemboi, a boda boda operator in Keringet, Nakuru County.
His business is to transport milk from farmers to the nearby Keringet Foods Limited, a cooperative, for pasteurisation and chilling.
Farmers pay him Sh4 for every litre of milk he delivers. The delivery wages are paid to him end month through Agri-wallet, a mobile financial tool which connects farmers, agrovets, transport providers and off-takers or farmers’ cooperatives.
Jackson Rotich is one of the dairy farmers who sell milk to Keringet Foods Limited, which also uses the Agri-wallet platform. Like the rest of the farmers, he is paid at the end of the month for the deliveries.
Immediately the farmers’ produce reaches the cooperative, they receive a text message on phone informing them of the delivery.
Mr Rotich, who sells 40 litres of milk daily to the co-operative, says those registered on the Agri-wallet platform are paid 90 percent of their monthly earnings through M-Pesa while the remaining 10 percent goes to the Agri-wallet account.
“The amount of money sent to the Agri-wallet account cannot be withdrawn, instead it is used to purchase farm inputs such as seeds, feeds, fertiliser and pesticides from an agro-vet also registered on the platform,” explains Mr Rotich who has been a dairy farmer for the last five years says. He enrolled on the platform in August last year.
“Previously, delayed payments for farmers was the order of the day forcing them to sell their milk to middlemen. But after the introduction of the technology, farmers are paid on the first week of every month,” says Mr Rotich who has four lactating cows all of which give me around 32 litres of milk daily. He earns Sh28 a litre after Sh4 is deducted for transport.
More farmers in Keringet are now shifting to dairy and potato farming since August last year when the financial access platform was introduced. This is driven mainly by the prompt payment.
Pamela Kosgei, a potato farmer in the area, also sells her produce to the cooperative. She says the cooperative has eliminated brokers, while the Agri-wallet platform ensures they have money for farm inputs at the beginning of each farming season.
“Previously, I could sell my poultry to get money to buy potato seeds after spending everything from my sales. But now I have my money for inputs saved in the Agri-wallet, so I don’t have to worry,” explains Ms Kosgei who farms potatoes on 15 acres of land.
The platform is a boon to farmers especially now that banks have squeezed credit for small enterprises following the capping of interest rates.
Many money lending institutions such as banks also fear extending loans and financial credits to smallholder farmers because they do not have credit score or collaterals such as title deeds. As a result access to financial credits remain a serious challenge for such farmers.
To enable their member cooperatives pay farmers on time, Dodore, the company owning the Agri-wallet platform offers them credit.
“We offer credit as a working capital to enable cooperative societies we work with such as Keringet Food Limited to pay their farmers on time. Before we give the credits we do credit checks to analyse assets, contract with suppliers, and number of farmers supplying the cooperatives,” says Gidraf Wachira, financial officer at Dodore.
He adds that farmers are trained on financial discipline before they are enrolled on Agri-wallet.
“We ask them to commit a certain percentage of their produce earnings to inputs specifically. They redeem the money in the Agri-wallet at the agro-vets,” he says, adding that with the platform farmers can get small loans to enable them acquire more farm inputs.
Rehab Gesare, an accountant at Keringet Foods Limited, says in late 2017 they couldn’t pay farmers on time since the processor to whom they sotheir dues.
“Many of our farmers took off and milk delivery dropped drastically. We used to collect 15,000 litres a day then the collection dropped to 2,000 liters,” she notes.
But now with the prompt payment, farmers are slowly sending their produce to the cooperative.
“We now collect 7,000 litres od milk daily and farmers are happy. They receive money on the second working day of the month,” Ms Gesare notes.
Elias Chandi, Agri-finance advisor at SNV, a Dutch development agency, says they are partnering with Dodore to enhance financial access among smallholder farmers across the country.
So far the technology is being used across several counties - Nyeri, Meru, Nakuru and Bungoma Counties. It is also used in Kisumu County where rice farmers in Ahero have been trained to utilise the mobile money platform.
“Our aim is to enhance financial inclusion among smallholder farmers. We also want farmers to have market linkages and the right skill and technique...,” says Mr Chandi.