FarmBiz Africa

IT innovation connects farmers to unsecure loans

A team of IT specialists are helping financial institutions offer loans to the small scale farmers through mapping and data compilation of the farmers fixed land assets and locations in a move aimed at granting farmers with no land titles capital to increase production.

As is the case in most parts of Africa, land as a factor of production is mostly owned by the male counterparts. Ironically, women and children make up the bulk of the labour force working on the farms although they don’t have ownership status. Due to this complex fact, most women who are small scale farmers can hardly access financial assistance from banks and microfinance because of lacking collateral in most cases being land titles and in the hands of the men. It is behind this backdrop of events that a team of students under AKORION group have developed a data system and an app detailing farmers’ particulars from each and every location in Uganda.

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The team of IT specialists under the leadership of Emmanuel Okello visits regions to be mapped. They then gather the data of the farmers around the area, map out their land and what they are doing, and l  link them up to financial institutions. The data collected include farmers’ particulars, acreage, history, costs, and harvests among others.  In order to get the best genuine and reliable details the team conducts field visits from where they work with extension officers of the area. They then employ 3 village agents in charge of 75-80 small scale farmers in their locality.

The village agents are then handed smart phones from where they continue updating the farmers’ details for follow up to any interested stakeholder. Currently the data and app is helping Uganda Development bank to offer credit facilities to the small scale farmers. The loans are unsecured and UAP insurance has joined in the project to offer insurance to the loans.

AKORION also has developed a website that is in advanced stages of launching that is going to manage all these data. “We have already combined the data into the format that are friendly to interact with, incorporated it into our website and soon will be launching the site for the public. However most of the data regarding our clients will be accessible to our premium clients who can verify and know the status of their existing small scale farmer clients and even use it to acquire more business from them.” According to Okello, the data they have collected is frequently updated and therefore ideal for many agro-based financial institutions.  “We already have over 1500 farmers who have acquired credit facilities through our project and the beauty is that they need no collateral to do this but our data and their history bargains for them. We are simply reducing the monitoring costs on the side of the financial institutions and therefore leaving them room with doing what they do best, selling cash,” added Okello.

Okello added that their efforts is also aimed at giving farmers a voice in aggregating all their produce and also dealing in common crops in order to enjoy economies of scale. “We encourage farmers to adopt common and high value crops and therefore after harvesting sell in bulk and automatically have a higher bargaining power” noted Okello.

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