Akellobanker Digital Platform: Improving Access to Agricultural Inputs on Credit for Smallholder Farmers

Agriculture remains the major export earning for the Ugandan economy. The agriculture sector remained relatively vibrant despite the impact of COVID-19 which posed restrictions on the exportation of agricultural produce. ?The country’s strategy toward agricultural productivity is focused on implementing the agricultural finance policy and strategy, continuing innovation and research, and investing in value chain financing as well as general investments in the agricultural sector[1].

Digitalization of agricultural service delivery in Uganda can be highly beneficial and therefore needs crucial support. Digital technology is critical for farmer profiling and data aggregation, development of credible information systems along agricultural value chains, documenting land inventories, risk assessment and credit scoring of farmers, agricultural and business skills adoption, identification of genuine agricultural inputs, price optimization, commodity aggregation, storage and marketing, improving record-keeping and financial literacy, and speeding up of lending processes while reducing transaction and access costs. Technological innovation is a key driver in enabling ease of service delivery along the agricultural value chain.

Akellobanker is a typical example of an agricultural digital platform aimed at ensuring that smallholder farmers conveniently access agricultural products and services any time, anywhere. It is an analytics-based machine learning platform that facilitates easy access to farm inputs, experts-extension services, agro-advisory services, tools, and equipment for farmers while providing an option for farmers to pay, share or hire the service or equipment on credit.

Below is a user journey for access to the Akellobanker platform

By use of a feature phone, farmers dial a USSD code to sign up to the Akellobanker platform to be enrolled on the platform or they can visit an authorized Digital Extension Agent. Once the farmer’s details have been validated by agents, the farmer can start using the USSD to sign up for their preferred service from a range such as Agro-advisory, extension services, tractor hire, Animal traction hire, Farm equipment and implement hire, and inputs. The orders will be received by the service providers via SMS, USSD, or App (app.akellobanker.com) and transaction settlement is automatically done by the platform.

Using the input data and farmer transaction history, the platform runs analysis and prompts relevant content to farmers via SMS. Similarly, the data is used to predict the output, and this data is shared with the output market linkage platform (markets.akellobanker.com) enabling farmers to receive orders from the buyers or enabling buyers to directly contract farmers to farm for them.

To ensure that we deliver Akellobanker sustainably and at the lowest possible cost, we do implement a model that utilizes the power of Cooperatives and farmer groups (where our Digital extension Agents are located) as the entry level. We digitize the data of the farmers at the Group level/cooperative level, hence creating a digital footprint for every farmer. Farmers are able to make collective requests or individualized requests, which can be approved at the cooperative level or directly sent to the service providers for action. The requests can be made in cash, mobile money, or credit. If it is on credit, we use financial and non-financial data to conduct the initial credit risk analysis and scoring before forwarding it to the partner and the financial service providers for final credit decisions where the cash will be paid to the service provider upon delivery.

Below is an illustration of the Akellobanker delivery model set out to ensure sustainability in the long run.

Akellobanker, in partnership with UNCDF, launched the digitalization of agriculture ventures in northern Uganda to address the challenges of low agricultural production by enabling linkages between smallholder farmers and genuine service providers and allowing farmers to access products and services both on cash and credit.

?Since then, we have facilitated access to inputs through the platform with a transaction value of over UGX 150 Million shillings over a seven-month period and have onboarded over 24,000 farmers in the same period. We have further secured over 10 Billion Shillings for Agricultural credit to farmers using the Akellobanker platform and seen some instant impact on the farms as seen in the picture below.

?An image showing a farmer on her farm using Akellobanker for advisory and extension after using the platform for the inputs.

?Other Metrics we have been tracking include.

1.????Agricultural service providers: Akellobanker has been able to onboard 145?service providers onto the platform who offer various services as shown in the chart.

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?2.????Farmer request processing:

Progressive trends in the number of farmers requesting agricultural products and services from the service provider.

3.????Farmer Enrollment.

Farmer enrollment trends on the Akellobanker platform

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Expected Benefits to the Value chain Actors.

The End Goal:

Conclusion:

Based on our experience implementing this project with UNCDF, we have proven that digital technology can work as an accelerator to reach millions of low-income earners, especially farmers if properly designed for systemic impact. Given limitations in the Government’s capacity to create enabling environments for key sectors that foster local development, participation of rural communities in a digital economy would enable them better navigate infrastructural challenges and be connected to markets. Digital tools and tech-enabled solutions adapted to rural community needs and literacy levels can make up for gaps in the agricultural value chain.

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This article was co-authored with partners from UNCDF

[1] Uganda National Planning Authority. (2020). Third National Development Plan (NDPIII) 2020/21-2024/25. National Planning Authority, January, 1–310. https://envalert.org/wp-content/uploads/2020/06/NDP-3-Finale.pdf