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App helps agriprenuers to save and borrow at touch of button

By Nanjinia Wamuswa
Pamela Kosgei harvesting Shangi potatoes in her farm located in Keringet area in Kuresoi South Sub County. [Nanjinia Wamuswa, Standard]

Pamela Kosgei, a potato farmer in Nakuru County, is a happy woman this season. Cash which is always her biggest headache as planting season approaches, is no longer a big deal.

Unlike previous seasons when planting time would find her broke and unprepared, this time Ms Kosgei has everything set.

“It was tough back then. After selling my produce, l would set aside money, specifically for farm inputs for the next planting season. But, by the time planting seasons came, all the money would have been spent on other things. Typical of life,” she recalls.

Access to finance was also a challenge. The very first loan of Sh30,000 she invested in potatoes wasn’t easy to get. 

“I was forced to get many guarantors before l got the money.”

But now things have changed.

She joined Agri-wallet, an innovative mobile tool in June last year, and now things are manageable. Agri-Wallet, developed by Dodore, works like a normal wallet for smallholder farmers.

Through it, registered farmers can save and even borrow funds to buy farm inputs at registered suppliers. And Ms Kosgei has tasted its benefits.

How it works

With money guaranteed thanks to Agri-Wallet, she plans to start planting her Shangi potatoes in the next few weeks. As per her calculations, apart from the cost of preparing the land, she requires farm inputs worth Sh100,000. This will cover the cost of seeds, fertilisers and pesticides on her 15-acre land in Keringet, Kuresoi South Sub County. So how does it work?

Agri-Wallet connects three players in a value chain who are the offtake market/buyers in bulk, farmers and input suppliers.

Gidraf Wachira, a Business Development Manager at Dodore Kenya Ltd, says the platform connects three players in a value chain who include agri-businesses, farmers and input suppliers.

To achieve its goal, Agri-Wallet works with a few input suppliers key among them Wakulima Centre Agrovet and, KCSEED Foundation Trust and Keringet Food Limited (KFL).

“Farmers sell their produce to KFL and KCSEED Foundation Trust, and at the point of payment, they willingly commit a certain percentage of their money to go into a wallet in form of input tokens which then specifically go towards purchase of farm inputs when they need them. The rest is paid on farmer’s MPesa account.

Wachira explains that tokens in the farmers’ Agri-wallet is solely for buying farm inputs at a registered agrovets. Here, they are allowed to buy seeds, fertilisers, pesticides and other farm inputs.

Ms Kosgei says after selling her produce, she commits 30 per cent in Agri-Wallet for purchase of farm inputs for the next season.

“This money l commit to purchase farm inputs has solved the problem l have always had when planting season would find me broke. It's like saving for the future,” she says.

Ready market

Additionally, through the platform, KFL and KCSEED Foundation Trust provide ready market for Ms Kosgei and other farmers, unlike before when brokers exploited them.

Wachira reveals through Agri-Wallet, farmers can also get advance financing. They are allowed to repay it at the end of the season.

In the event KFL has not received payments for produce delivered to processors, Agri-Wallet offers it credit in form of working capital so as to pay farmers promptly, as per agreed date and terms.

If all goes well, the app is set to be a real game changer for farmers on access to financing.

Lack of collateral

Elias Chandi, an Agri-Finance Advisor, SNV, says access to finance is a serious challenge facing smallholder farmers as lenders often deny them loans due to lack of collateral.

“Since we’ve worked in horticulture for many years and understand challenges facing farmers, the partnership with Agri-Wallet is to enhance financing access for farmers for quality input, market linkages and rightful skills for high quality production,” says Chandi.

Jackson Rotich, a dairy farmer from Kuresoi South Sub County is another beneficiary of Agri-wallet. Since he ventured into dairy farming over five years ago, there wasn’t a ready market for his milk, so he would hawk the milk or sell through brokers.

“Marketing changed when l joined Agri-Wallet, as KFL takes and sells milk on my behalf, and sends me money through Mpesa,” he lauds.

On his monthly payments from KFL, Rotich sets aside 10 per cent of his income in his Agri-Wallet account, and redeems the tokens for saltlick, dairy meal and other feeds for his dairy cows at the a registered supplier. He has eight dairy cows, and currently milking four, which gives him around 40 litres of milk in a day.    

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