5 Nigerian Agrifintech Startups Providing Services for Smallholder Farmers
5 Nigerian agrifintech startups providing digital financial services and tools for 78% of Nigerian farmers who lack access to formal financial services
A recent report determined that collectively, around 220,000 SMEs agribusinesses in sub-Saharan Africa and Southeast Asia are in need of $160 billion in financing.
One of the biggest pains for Africa’s smallholder farmers is access to capital provided by financial institutions. This is where agritech entrepreneurs are coming in leveraging advancements in fintech to fill financing gaps and provide adjacent financial services.
Nigeria has a population of over 400 million people, and its fintech industry has experienced massive development over the years, with three fintech unicorns, so far. Its agritech entrepreneurs are doubling down on advancing agricultural financing through embedded fintech tools for the 78% of Nigerian farmers who face a lack of access to formal financial services.
Apart from significant efforts by startups, the government, through the Bank of Agriculture (BoA), is working to extend credit facilities to rural businesses and small to large-scale farmers.
Here are 5 leading Nigerian agrifintech startups helping farmers access financial service:
Tingo (2015): One of the first Nigerian agrifintech startups, Tingo is offering a comprehensive platform service through use of smartphones (using GSM technology) to empower a marketplace to enable subscribers/farmers within and outside of the agricultural sector to manage their commercial activities of growing and selling their production to market participants both domestically and internationally.
Last year, Tingo teamed up with Visa to enhance its digital payments services and issue Visa cards to users on Nwassa and Tingo Pay. Further, the partnership will aim to increase financial literacy in Nigeria in the communities it reaches.
Tingo was recently acquired by Chinese fintech company MICT, and the merger will see Tingo merged with the Nasdaq-listed MICT.
HerVest (2020): A social enterprise providing financial inclusion for women through a Gender Lens approach. HerVest is built to help women everywhere take control of their finances one impact at a time. It was founded with the aim of providing financial inclusion for female Nigerian farmers, along with helping them access markets and relevant training.
ThriveAgric (2017): Leverages technology to provide profitable support for smallholder farmers across Africa, to strengthen the agriculture value chain towards increasing food production. ThriveAgric provides a host of tech solutions for smallholder farmers to help them increase their productivity, including input financing for farmers. It collects farmers’ data as it onboards them and maps their farms, assessing their creditworthiness. Then ThriveAgric calculates how much credit a farmer can receive and provides inputs to the value of the loan. Inputs include seeds, fertilizers, and crop protection products.
Just this year, as reported by agfunder news, the startup secured $56.4 million in debt financing. The amount included a $1.75 million co-investment grant from USAID-funded West Africa Trade & Investment Hub.
Crop2cash (2018): A platform providing financial accounts for otherwise unbanked farmers. The accounts are linked to e-wallets, which facilitate money transfers and make purchases. With their financial transactions being tracked, Crop2Cash has been able to build financial identities for over 100,000 farmers. The startup is now working with financial institutions, leveraging these identities to help the farmers access credit. So far, Crop2Cash has unlocked $2.8 million in credit.
Beyond extending financial services to smallholders, Crop2Cash hosts a supply chain management platform to serve agro-processors. They interact with farmers and purchase products from them via the Crop2Cash platform, which has also been designed as a marketplace.
TradeBuza (2017): Leverages technology and data infrastructure to help smallholder farmers access agriculture financing.
Apart from providing lenders with creditworthiness assessment data, the startup has three main offerings; TradeBuza Capture, a tool that enables GPS farm mapping and collection of farmer KYC particulars, TradeBuza AgroAPI which provides remote sensing and satellite imagery services as well as TradeBuza Agro, a cloud-based farm management platform.
Agribusinesses can manage their outgrower schemes with its solutions and even automate their payments with suppliers and farmers.