Objectives of the Product

Currently, many farmers are unable to access credits to buy inputs such as seeds and fertilisers. Women and young people are particularly disadvantaged. With the agriKOPA service, agriBORA creates a credit score that provides more objective access to loans.

Working together with agriHUBs, agriBORA already provides farmers with inputs, as well as linkage to the markets through contracts with agri-processors. It provides farmers with advice throughout the season, based largely on satellite, Earth observation (EO) data. However, access to credit is generally acknowledged to be a major problem for farmers, negatively affecting their ability to make a living.

Since agriBORA’s major revenue stream comes from commissions charged on transactions, which take place over their platform, farmers’ lack of access to credit is also a problem for agriBORA.

The agriKOPA product produces a credit score that enables Financial Service Providers (FSPs) to lend with confidence. In addition, during the growing season, EO-based yield forecasts help lenders to constantly monitor their risk.

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Customers and their Needs

There are three main customer groups for this product: smallholder farmers, agriHUBs and FSPs.

Smallholder farmers often lack money for high-quality seeds and fertilizers, and also for services like ploughing and soil testing. With this concept of earmarked loans, agriKOPA provides farmers with financial resources exactly when they need them.

For agriHUBs and their managers, enabling loans means that the farmers will have more money to spend on the products and services provided by these hubs. The agriKOPA service helps agriHUBs retain their customers and build sustainable businesses.

FSPs see the smallholder farmer sector as risky and inefficient to service. Obtaining the basic data before even considering a loan is difficult and costly. Estimating creditworthiness is a problem, with women at a particular disadvantage. FSPs also need information on the development of the harvests in regions where they have granted loans, in order to monitor their risks.

The picture below shows an agriBORA “agriHUB” being visited, in connection with the requirement-definition phase of the project.

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Targeted customer/users’ countries

The agriKOPA product will be first introduced in several of counties in Western Kenya. Thereafter, the product will be made available throughout Kenya, with a planned expansion into other African countries.

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Product description

The agriKOPA product is innovative in many aspects. The application of EO data and the compilation of immutable transaction histories using information stored in the agriLEDGER is ground-breaking in the agricultural sector in Kenya. With EO data, agriKOPA monitors crop development and can give timely insights to banks and farmers regarding problems arising. The farmer interacts with this software-as-a-service platform through a phone USSD-code menu, removing the need for a smartphone. With banks, the interaction will be through an API interface, connecting agriKOPA’s software to the software of the bank. The diagram below shows the service to allow FSPs to monitor their risks.

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Added Value

AgriKOPA’s main competitors provide farming inputs and services at different types of farmer service centres. They provide credit, often linked to insurance policies. Credits are financed directly by the company, or in cooperation with banks.

This initiative brings added value through the innovative credit-scoring algorithm and field monitoring, which is enabled by EO, machine learning and artificial intelligence. AgriBORA is the only company that provides a true end-to-end service, ensuring that contracts are in place with agri-processors, thereby granting guaranteed access to the market. This, in turn, greatly reduces the risk of bad debts for FSPs.

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Current Status

The factory acceptance test (FAT) milestone meeting was conducted successfully on 10 June 2024 in Nairobi, including site visits to smallholder farmers, agriHUBs, and the Kenya Commercial Bank, as well as users of the agriKOPA functionality.

Next steps include monitoring repayments, visiting farms, and reaching out to all 84 farmers to identify payment challenges.

The validation phase has started with 30 selected hubs. The next milestone is the Final Review and will be organised in October 2024, with no expected delays.