Africa: Born Out of Working With Nandos, Agtech Start-Up Greenfingers Mobile Looks to Expand to More Countries and Provide Lower-Cost Finance to African Farmers

Agtech platforms operate in a tough space. As potential users, African farmers are huge in number but almost entirely operate on small plots of land. They also tend to be older, have lower literacy and incomes. Russell Southwood spoke to Natalie Miller, CEO, GreenFingers Mobile about how as a start-up has faced these challenges.

The idea for GreenFingers Mobile came out of work its co-founders (two of whom were involved with Impact Amplifier) did with Nandos six years ago on a different project. Nandos had decided to make a strategic shift in its suppliers and wanted to start using small farmers and use sustainable farming in South Africa.

It was struggling to move forward with the project. The small farmers were all small businesses and there was no real-time data, tracking or transparency. There was no easy way of seeing how much the small farmers might get out of any sales they made to Nandos. GreenFingers grew out of this and other parallel discussions at the time.

70% of Sub-Saharan Africa's population relies on small-scale farming and the two big challenges for these small-scale farmers was access to market and access to finance.

To meet these challenges, it decided to build a tech platform to address these challenges:" We teamed up with a tech company and built a prototype. It digitalized all the information needed, including household information and the geo-location of the farm. It could also provide information to farmers on things like pests and provide technical assistance. On the access to finance side, it would capture all the farmers' transactions, laying the basis for a credit record".

Based in Cape Town, GreenFingers started in 2016 with a prototype in Zimbabwe and Malawi and it kept building on that original platform. In 2018, it decided that the platform needed to be improved and completely redeveloped it. The new platform allowed it to scale more easily and was two-thirds cheaper in price terms:"We parted ways with the previous tech platform developer and migrated all existing clients to the new platform last year, We built out a full business platform and rolled it out in three countries. We're still working with Nandos but mostly in Zimbabwe".

One of the tropes of the agtech start-up sector is that these kinds of platforms will banish the "middleman" who generally presented as sucking any profits out of the farming value chain. Miller disagrees completely:"Middlemen or aggregators are essential and not the villains they have been painted as. We need to respect that relationship with farmers. They're important because it bears on how quickly the farmers get paid. We're working with Nandos in Malawi and through the roll-out of the platform, it was possible to see where farmers were not being paid in a timely manner and make changes."

The big challenge for agtech platforms of this kind has been to actually get farmers or some other player in the farming value chain to actually use them. Farmers are often older and less willing to adopt new tech. In addition, they have very low incomes and may not have phones that enable a full online platform.

GreenFingers Mobile defines itself as selling its platform to any entity working with small farmers. This includes a long list of organisations including: agribusinesses and farming co-ops, food companies, funding agencies and finance institutions lending to farmers. It also has a module for reforestation projects using small farmers that can track and monitor trees.

Its market growth strategy has been to use agricultural Field Extension Officers (FEOs):" It enables FEO managers to see what's happening: are the FEOs doing their weekly work? They have them upload photos of training that are time stamped".

Through this channel they have 8,800 farmers on the system:" Only 60% have mobile phones, and these are mostly featurephones". They are carrying out farmers' validation work in Zimbabwe and Tanzania.

The FEOs either email farmers on their phone or do mass enrolment at depots where farmers go for agricultural inputs. As with an increasing number of these platforms, they are tied into funding schemes that provide subsidies for agricultural inputs like fertilizers and seeds.

The FEOs can open profiles for farmers and provide assistance and highlight the finance for input schemes:"If produce is bought from a farmer, the platform can print a paper receipt. Originally the Field Foundation provided credit for inputs but ETG is now using farmer data gathered to get a bank to do it. The credit information comes from Green Fingers".

"We discovered that the FEOs were still using notebooks. We asked why? They said that there was not enough room for comments so we've added that in the new version. Also payments are recorded on the system".

On the basis of its validation work, it wants to expand geographically and has a reseller network using agricultural consultants in Kenya, Mozambique, Uganda, South Africa and Zambia.

So how does the business model work?:"An agribiz company or a buyer like Nandos for the initial set-up and then takes it over. It's mostly a licence fee paid annually. Any additional customers are paid for additionally".

It has financed itself from a couple of rounds from the Hivos Food and Lifestyle Fund:"We're closing a third round. I'm putting in a little money myself. We're finalists in the Google Impact Challenge so we may raise some money from that".

In the longer term, it wants to be able to deal with the access to finance challenge by offering its own finance scheme:" We've been approached by several MFIs but have not had a success yet. We're asking: Why not go a step further? We want to be involved in all parts of the system. We could offer a quasi guarantee. We don't have to use our own loan agents and could offer better interest rates".

Miller describes her competitors as "a few smaller management systems like Terraworks and Farmforce. Several have more functionalities but we have some customers who have left them to come to us. FEOs have little experience with tech. If you can't navigate the app easily, it will not be used properly. We focused on the UI/UX side of things and the platform is easy to navigate and we have some ability to customize it. Microfinance and impact assessment are the differentiating factors".

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