Smallholder farmers make up 80% of the world’s poorest people, in large part because their cash flow is “lumpy”. They have the most money in their pockets at harvest time, but they need it most at planting time – when they’ve too little left to buy high-quality fertiliser and seed to assure a good yield at the next harvest. Without access to formal financial institutions, they can’t set aside money to invest in their farms, which keeps them from growing enough food to feed their families year-round and from planning for anything but survival.
The most common approach to addressing low-income people’s need for financial services in the developing world is microcredit. Despite making tremendous inroads, however, microcredit has yet to find a cost-effective way to serve smallholder farmers. Only 3% of smallholders’ estimated annual financing need of USD 450 billion is currently met, and the financing available reaches just 7% of this market segment.
myAgro has pioneered a mobile layaway payment model that lets farmers in rural villages of Mali, Senegal and Tanzania pay in advance for high-quality seed, fertiliser, tools and training. Customers buy a prepaid myAgro card at their village store for USD 1-50, scratch off the back to reveal a secret code and send a text message with this code and their myAgro ID number to have the payment digitally allocated to their account. A few months later, they receive the inputs and training they’ve already paid for just in time for planting season. Commission-based sales agents called village entrepreneurs enroll new customers and sell scratch cards, whilst myAgro employees, or field agents, manage and coach the village entrepreneurs.
myAgro makes paying for farm inputs and training as convenient as buying mobile minutes, building on a technology that smallholders know and trust. Those who adopt this debt-free approach to investing in their farms have experienced yield increases of 50-100% and income increases of 50% and more. With our support, myAgro will complete its expansion into southern Senegal’s Kaolack and Casamance regions, home to 1.7 million people living on less than USD 2 per day.
GOALS AND EXPECTED IMPACT
To date, myAgro has successfully adapted its model to scale in Senegal, serving 20 000 farmers in 2018 through a network of 284 village entrepreneurs. In this project, it aims to recruit and train a new network of village entrepreneurs and field agents in villages in Kaolack and Casamance and to offer customers follow-up trainings to help them increase yields. By 2021, it expects160 000 more farmers to have planted with improved inputs and increased their harvests and farm income by an average of at least 50%
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