Digital Agriculture Business Model (Farmers E-Subsidy)

The Struggle of farmers to have access to finance has been among the major stumbling blocks in the micro-development of farmers welfare which in turn negatively affects the growth of the agriculture sector. Acknowledging the challenge, the Government, and private sectors are in continuous efforts to alleviate and Eradicate the challenges.

The Banking Sector has been a cheerleader in the role of financial inclusion to farmers. NMB Bank has developed a unique lending approach to agribusinesses and gathered a wealth of experience that makes the bank more competitive in agriculture value chain financing than its competitors. ? Warehouse Receipt Financing, Out-growers Loan Schemes, Working capital/Overdraft credit facilities, Short, medium and long term Loan facilities, Agribusiness bank accounts ( i.e. Business, Personal and Saving accounts).

Introducing Farmers E-Subsidy and E-Wallet, a technology disruption in the subsidy system with a high efficiency and Effectivity rate. It yet stands as an untamed opportunity which hasn’t been fully adapted by the Tanzania Financial sector. Startup founders haven’t yet also eyed fully the potential in the field. According to the 2022 national census report, Data from GSMA Intelligence shows that there were 53.81 million cellular mobile connections in Tanzania at the start of 2022. GSMA Intelligence's numbers indicate that mobile connections in Tanzania were equivalent to 86.2 percent of the total population in January 2022. This clear demonstrates that there is a clear market of farmers across the country

In the system, farmers received e-vouchers in the form of a telephone message containing a special code that allowed them to access subsidized inputs and equipment at specific outlets. This helped eliminate the incidence of fraud within the distribution system.

The e-voucher redemption process begins with farmer registration. This captures the farmers’ bio-data and transmits it to the available servers. Farmers and the extension agent staff are then trained on the program and appropriate applications installed in their phones/ tablets. These systems require a 4G/5G sim card. Voucher batches are then released by the authorities.?

Farmers receive messages that require them to be verified by the Agricultural Officers or their Ward Agricultural Officers. Upon verification farmers then receive e-voucher messages bearing unique codes which they take to the Agro dealers to begin the e-voucher redemption process. The Agro-dealers then input the special unique voucher codes in their systems that prompts the farmers to input their Mobile money PIN. The system then automatically deducts 60% of the input cost, triggering a 40% top up from the company.

This innovation is a top-tier when it comes to input activities in the Agriculture value chain. Currently The E-Subsidy model is practiced by the government through the ministry of Agriculture but this business model can also be practiced by Financial Service providers, Agro-input dealers, Agri-bussiness companies and Agri-tech startups.