Zowasel Partners Standage & SpaceShift to Enhance Access to Agricultural Machinery Services through Alternative Credit Scoring in Nigeria.

Zowasel has partnered with Standage and SpaceShift to enhance access to agricultural machinery through an alternative credit scoring model that allows smallholder farmers to access finance in Nigeria. Mitsubishi Corporation's Nigeria facilitated the partnership and signing ceremony in its West African office in Lagos in October 2024.

Smallholder farming is a complex endeavor. The most daunting challenges for farmers across Nigeria and the continent are securing loans against farmlands and expected harvests. This is due to the high-risk nature of agriculture, which results in agricultural lending attracting less than 5% of commercial bank loans.

Despite the importance of machinery in driving agricultural mechanization, Nigerian smallholders have the least access to mechanization services in Africa due to the land tenure system, scarcity of machinery, illiteracy, maintenance technicians, and lack of capital to purchase or rent the equipment.

The high cost of evaluating farmers' creditworthiness and the inherent risk in such borrowing result in millions of smallholder farmers being underserved by traditional banks. Farmlands and harvested crops are not acceptable as collateral, and farmers rarely have other hard assets to provide collateral as backup loan applications.

The partnership will leverage Zowasel's on-the-ground infrastructure and experience from the initial phase one agricultural machinery program with Mitsubishi Corporation, Honda, and Standage and build on Zowasel's Alternative Credit Evaluation Scoring System (ACESS) to bridge the GAP between farmers and financial institutions and unlock access to credit for smallholders through alternative data.

Space Shift, a Japanese-based remote sensing and earth observation satellite company will play a crucial role in the partnership. They will deploy their advanced technology to provide vital soil and weather information. This information will be used to improve and determine farmers' credit scores for potential lending.

Speaking on the partnership, Space Shift CEO Naruo Kanemoto said, “We will obtain farmland data from optical satellites and synthetic aperture radar (SAR) satellites, use AI to analyze the data, understand the soil information and crop growth conditions, and make credit scoring predictions for smallholder farmers to access working capital from microfinance and fintech partners.”

Space Shift's remote sensing technology, tagged 'Sense the Unseen from Orbit,' is a cutting-edge system that uses advanced AI modelling to analyze data obtained from Earth observation satellites. It extracts a wealth of soil information with recognition capabilities that exceed those of humans, showcasing the program's innovative approach and its ability to provide accurate and timely data for credit scoring.

Standage, a Japanese-based import and export trading company, will play a crucial role in the partnership. They will manage the purchase and importation of tractors and harvesters suitable for sustainable rice and sesame cultivation in the Nigerian agricultural ecosystem and terrains. The company will also coordinate and provide technical advice for the program, maintenance services, and technical repairs, ensuring the machinery's smooth operation and the program's success.

Expressing his enthusiasm for the partnership, Dave Gabriel, the Managing Director of Standage Nigeria, reaffirmed the company’s unwavering commitment to the initiative. He stated, “We are excited to continue collaborating with Zowasel in phase two. We will leverage our supply chain expertise to ensure agricultural machinery’s smooth procurement, shipment, and maintenance, providing crucial support to the program.”

Zowasel will play a pivotal role in the program, scaling it across its remote Crop Centre infrastructures in the North-central state of Nasarawa. The focus will be on engaging new and existing networks of cooperatives and smallholder farmers, building on the success of the 2022 initial phase one pilot in the rice and sesame value chains.

Zowasel will deploy its advanced Crop Pilot dMRV software, *7199# Farmers Call Centre, and Extension Advisory App for data collection, monitoring, analysis, and reporting, ensuring the program's smooth operation and success.

Also, speaking about the program, Jerry Oche, Zowasel CEO, said, “The growing urban population and rising demand for agricultural commodities require financial institutions to reconsider agricultural lending. We will continue to drive the digitalization of farmers’ footprints and value chain automation to make it more accessible and transparent for financial institutions to identify and quantify the risks and opportunities associated with agricultural lending using alternative data and technology.”

The partnership's ambitious goal is to provide access to finance through an alternative credit scoring model and deliver high-quality agricultural machinery across Zowasel's remote Crop Centre infrastructures. This initiative promises to significantly increase the cycle of yields, reliable credit, and loans, thereby driving productivity and sustainability in smallholder farming.

The program is part of Japan's Global South Future-oriented Co-creation Project, which promotes microfinance by using satellite information to help smallholder farmers access alternative financing.

The program aims to create remote jobs by enabling Zowasel remote Crop Centre agents to maximize their opportunities as a direct point of sale for smallholder farmers to access affordable tractors and harvesters' mechanization rental services to increase their productivity and profitability.

About Space Shift

Space Shift is a Japanese remote sensing and earth observation satellite company. The company uses AI to analyze data obtained from Earth observation satellites and extract a lot of information with recognition capabilities that exceed those of humans. Space Shift aims to realize a sustainable society by utilizing satellite data in various fields, such as infrastructure management, disaster prevention and mitigation, agricultural monitoring, and environmental conservation.

visit https://www.spcsft.com/

About Standage

Standage is a Japanese import and export trading company established in March 2017. The company's vision is to create a world where all countries have equal access to everything. Its primary markets are emerging countries, including Africa, and it has established bases in four African countries, including Nigeria, to conduct trade with Africa. Standage links African businesses with Japanese companies, bringing the finest Japanese products with the highest quality to every corner of Africa.

visit https://wp.standage.co.jp/en/