Global stability largely depends on the food security and prosperity of the population. To reduce poverty levels and provide economic security to the dwellers of rural areas, the agriculture sector needs to be properly financed and get access to quality financial services. Agri-fintech startups serve exactly this purpose. In Africa, the need for agri-fintech services is explicitly pronounced as for many nations in the region, agriculture is a primary driver of economic activity, employment and steady income.
Agri-Fintech In a Nutshell
Agri-fintech operates at the intersection of agriculture and financial technology. It deals with financial technologies and services related to financing, marketing and logistic solutions implemented within the agricultural industry.
This niche fintech segment provides innovative solutions designed to address the financial needs and challenges of smallholder farmers and underserved agriculture-related groups. Agri-fintech startups transform farmers’ access to rural credit, solve payment challenges in largely cash-based economies, help improve commercial experiences for both agricultural enterprises and their customers, and mitigate industry-specific financial risks.
Besides, agri-fintech solutions optimise operations in these critical times when demand on the global food supply chain grows and sustainability comes to the forefront. In addition to improving transaction efficiency, advanced technology can provide a precise assessment of weather-related and other agricultural risks to calibrate the pricing and streamline climate insurance offerings.
The Importance of Agriculture for the African Continent
Agriculture is a major source of employment in many African countries with vast rural territories. Besides commercial farming for income, many families in rural regions rely on subsistence farming for their livelihoods.
Even in countries with diversified economies, where agriculture is not a primary driver of economic activity, the sector can still be a significant contributor to national GDP. Overall, the agriculture sector accounts for 35% of Africa’s GDP and employs more Africans than any other sector. The share varies from 1.6% in Libya to 57.45% in Sierra Leone.
For several African countries, the export of agricultural products, such as coffee, cocoa, tea, and various crops, is a major revenue source. In many regions, investments and development of infrastructure, education, and healthcare in rural regions is also closely linked to the success of agriculture.
Providing proper access to financial services for the agricultural sector enhances overall economic resilience in many African countries. However, in many states, agriculture lacks not only technological innovations but also access to innovative financing means.
For instance, small and medium-sized agriculture businesses in sub-Saharan Africa faced a $74.5 billion funding gap in 2022. Issues like that can be solved with the help of the top agri-fintech solutions catering to the needs of African farmers.
Top Agri-Fintech Startups in Africa
Here are the most prominent fintech startups operating at the intersection of agricultural technology and financial services in Africa.
Apollo Agriculture (Kenya)
Apollo Agriculture aims to support small farmers in rural Africa. It has already served more than 100,000 farmers in Kenya and Zambia with a comprehensive offerings suite that includes access to credit, farm inputs, customised advice, insurance and markets, and more.
The company provides a bundled service agriculture platform, enabling farmers to improve productivity and increase their income. Customers can apply for bundles of agricultural services such as seeds, fertilisers, location-specific advice and crop insurance online. Once approved, Apollo Agriculture provides farmers with a voucher to redeem at local agro-dealers. While the startup pays off farmers’ purchases from its own balance sheet, customers then repay the value of their bundles out of their harvest sales income.
Apollo Agriculture leverages innovative technologies such as machine learning (ML), remote sensing, and mobile payments to accurately underwrite credit risk related to farming which is often vulnerable to the impacts of climate change and changing weather patterns.
Besides, the startup has an automatically managed network of more than 5,000 agents and nearly 1,000 retailers providing last-mile delivery of farm inputs and services to small-scale farmers.
Founded in 2017, the company received the grand prize of the 2022 Visa Everywhere Initiative (VEI), recognised for its ingenuity in applying technology to solving agricultural challenges. Its services include farmer onboarding, farm mapping, input distribution, field monitoring, harvesting, and inventory management.
The firm developed a proprietary technology called the Agricultural Operating System (AOS) that assists smallholder farmers in Nigeria in accessing finance, as well as enables harvest storage in corporate warehouses before commodities are digitised and offered to local and global trade markets at a premium price.
The startup has already successfully collected data of over 250,000 smallholder farmers, enabling their training and development, credit scoring, increased productivity/yield, as well as social and financial inclusion (via the firm’s digital payment process).
The ThriveAgric Marketplace offers farmers access to quality and affordable farming inputs and tools such as seeds, fertiliser, crop protection products, grains, and water pumps. The initiative aims to promote commercial over subsistence farming, and increase food security.
Pula Advisors (Kenya)
Pula Advisors is an agricultural insurance and tech company that offers innovative agricultural insurance and digital products to help smallholder farmers withstand yield risks, improve farming practices, and boost incomes.
Using remote-sensing data, drones, and an adaptive learning process, the startup refines its yield insurance products and increases cost efficiency. It provides inputs, farm monitoring, data, analytics and advisory services to smallholder farmers, helping them increase farm yield and climate resilience.
Pula Advisors cooperates with banks and agricultural SMEs who subsidise its services at low or no cost to the end customer. Partners also gain access to the company’s aggregated data on their customer base, reducing their portfolio risks.
The company provides a digital agriculture platform combining financing, aggregation, food processing and trading, commodity trading, agricultural technology, advisory and insurance solutions.
Its premium buyers get the “farm to fork” experience. Agrorite sources profitable contracts from both local and international buyers before the harvest period. During the harvest season, the ripe crops are brought to a central Agrorite Aggregation Center (AGC). Then the produce is processed, packaged and shipped to the consumers, including in the form of semi-finished products.
The firm aims to maximise farmers’ profits by leveraging warehousing solutions with minimum post-harvest waste. The clients also receive access to both local and international markets to boost their profitability.
The flagship product of EzyAgric is a value chain digitisation platform designed to increase crop yield. It provides farmers with access to agro-inputs, credit financing, e-extension and advisory services as well as market linkages.
The platform not only aggregates orders from customers to save costs on the purchase of inputs and sale of produce, but also uses its own warehousing and logistics operations to better manage seasonal demands.
EzyAgric’s agri-fintech offerings range from farming data and analytics, farm management and solutions, inputs and equipment to lending, including buy now pay later (BNPL), and credit scoring through partnerships.
The platform helps to increase the financial inclusion among the underserved rural communities, while also covering the gender gap in agricultural financing. Of the 10,000 monthly active users of the EzyAgric platform, over 80% are female farmers.
The startup focuses on underserved and excluded smallholder female farmers in Africa, providing them with access to financial services and products, including savings, impact investing and loans.
HerVest platform leverages technology for peer-to-peer capital reallocation. It connects impact investors eager to provide low-interest financing with verified, credible smallholder female farmers. Its flexible loans and resources help female entrepreneurs scale their businesses and achieve their financial goals.
Besides, the startup offers a few types of savings in partnership with VFD Microfinance Bank. They range from instant and flexible liquid savings in Purses to fixed savings plans serving one’s mid- or long-term goals. A clique savings plan allows customers to share their savings goal with family and friends, collectively reaching a common goal.
Oko Finance (Mali)
The company, which operates in Mali, Uganda and Cote d’Ivoire, offers mobile-centric micro-insurance products, like automated insurance using satellite imagery and mobile payments for farmers negatively affected by extreme weather patterns, as well as instant claims processing.
Oko Finance has partnered with advanced weather information providers to receive hyper-local data used to define the climate impact risk with high precision. It enables the startup to optimise the premium price, and automate the claim validation process by analysis of the historical data.
The company leverages innovative tools to distribute insurance in remote areas and to unbanked farmers. Taking into consideration local network issues, Oko offers a USSD menu that allows farmers to manage their policies from any mobile device, a mobile app which is usable offline, and an API that lets the partnering micro-finance institutions access relevant information securely.
The company facilitates digital agriculture finance, enhances production, reduces post-harvest losses and improves access to markets for Nigeria’s smallholder farmers.
AgroMall developed the AgroMall Digital Agricultural Platform (ADAP) mobile and web-based application to deliver agriculture-related insights to farmers, as well as collect and analyse farming data for monitoring, evaluation, prediction of yield and access to end customers.
Coupled with a ubiquitous network of agents, ADAP helps users to plan their operations, strengthen farming business, access funding, manage risks and quality, measure their impact and have situational awareness.
Emata offers affordable digital loans specifically designed to empower farmers to increase their revenue. It leverages artificial intelligence (AI) and advanced risk analytics to offer tailored affordable loans.
The company automates the entire loan process, from data collection and credit scoring, to loan disbursement. In addition, it offers loans to all business sizes, starting from amounts as small as UGX 60 000 (about US$15).
Since its 2021 launch, Emata has already partnered with 43 agricultural organisations and reached 38,000 dairy, coffee, maize, and oilseed farmers. The company was one of the winners of the 2022 Global Startup Awards competition that offers promising ventures exposure to international markets, funding opportunities and access to a global leader network.
The startup provides a few agriculture services: inputs demand aggregation and distribution, e-extension services, crop insurance, and output marketing, financed through affordable credit. Its operation model relies on farmer networks, mutually beneficial partnerships with seed companies, off-takers, insurance companies, and microfinance institutions.
Through partnerships with existing Microfinance institutions, and its network of village agents, the company provides agricultural loans to farmer groups. M-Omulimisa extension service leverages partnerships with existing actors in the agricultural extension ecosystem, to integrate its services within existing apps to improve their efficiency and effectiveness.
To mitigate the weather change impact, the startup provides localised weather information to farmers via mobile phones (SMS, mobile app, and website). Other available data insights include up-to-date market price information.