Digital Agriculture in LMICs -16 May #57
Accion announces $152.5M fund for MFIs engaged in digital farmer finance; Bank of Tanzania takes action to regulate digital lenders; Agritech Rize bags $12M to fuel Southeast Asia growth
09/05/24
Rize raises $14M in Series A Funding to boost Southeast Asia expansion
Singapore-based agritech start-up Rize has raised USD 14 million in a Series A round co-led by Breakthrough Energy Ventures, GenZero, Temasek and Wavemaker Impact. After being announced in October 2022, the startup started operations in Indonesia and Vietnam in June 2023. Rize is an app that helps farmers to identify and implement the most effective strategies to reduce greenhouse gas emissions in rice cultivation. Its data driven solution supports sustainable farming practices, making rice farmers more climate resilient, increasing their crop yields and facilitating access to finance.
Rize said that it will use the funding to enhance its technology stack including its Measuring, Reporting, and Verification (MRV) technology and support further expansion into Indonesia, Vietnam, and across South and Southeast Asia. The startup said that it wants to expand its team of agronomists to over 100 by the end of 2024, potentially reaching over 20,000 farmers.
Rice will see global demand increase by 50% by 2050. Rice cultivation is the second-largest source of greenhouse gas emissions in agri-food and is responsible for up to 33% of Southeast Asia’s methane emissions.
Photo credit: Impakter
13/05/25
Bank of Tanzania targets unlicensed digital lenders
The Bank of Tanzania (BoT) has published a notice prohibiting unlicensed digital lenders to operate in the country. The notice reiterated that the Microfinance Act 2018 gives the Bank the power to license institutions engaged in lending. The notice comes after growing concerns of unethical practices by digital lenders including high interest rates and debt-shaming of defaulters. There are approximately 100 unregistered digital lending apps in Tanzania, with several targeting rural customers and smallholder farmers. This announcement from the BoT follows the move by The Central Bank of Kenya (CBK), which banned 100+ unlicensed digital credit providers. The CBK started issuing new digital credit providers (DCPs) licences in an effort to regulate the fintech sector. In recent years, Kenya has faced issues related to the high cost of digital loans, unethical debt collection practices, and the abuse of personal information.
13/05/24
Agritech P2P lending platform TaniFund ordered to cease activities
Indonesia’s Financial Services Authority (OJK) has officially revoked the business licence of PT Tani Fund Madani, the company behind the agri/fintech peer-to-peer (P2P) lending platform TaniFund. The company will be no longer allowed to operate as a fintech. TaniFund is associated with TaniHub, a B2B market linkage platform connecting farmers to markets. Its business model was to provide loans to farmers through a P2P financing scheme enabling them to grow crops and then pay off the loans by selling on the TaniHub platform. PT Tani Fund Madani has been under investigation from OJK since 2022, after it failed to pay back creditors. The problem-solving and improvement measures that were implemented after the investigation initiated have not improved the debt position of the company, which is still estimated at around USD 900,000. According to Crunchbase, TaniHub has raised USD 94.5 million in funding since it was established in 2015.
15/04/24
Accion’s new $152.5M fund to support MFIs engaged in digital farmer finance
International nonprofit organisation Accion has launched the Accion Digital Transformation Fund, a USD 152.5 million fund providing growth capital to microfinance institutions (MFIS) serving small businesses excluded from financial systems. The fund will focus on fintech solutions targeting smallholder farmers, micro, small and medium enterprises (MSMEs) and women in low- and middle-income countries. It will invest in a total of 8-12 MFIs in Asia, Africa and Latin America. The fund’s investors are British International Investment (BII), the UK’s development finance institution, Dutch entrepreneurial development bank (FMO), IDB Invest of the Inter-American Development Bank (IDB), International Finance Corporartion (IFC) and Mastercard. The fund will be managed by Accion Impact Management, Accion’s platform for impact investment.
15/05/24
Mastercard’s Farm Pass reaches 11,000 farmers in Ethiopia
Mastercard has released new information about its Farm Pass Service in Ethiopia, which is offered in partnership with the Cooperative Bank of Oromia. Mastercard said that it has registered and delivered Farm Pass services to more than 11,000 farmers, 16 farmer primary cooperatives and 4 cooperative unions in Ethiopia. The platform also enabled more than USD 1.4 million in transaction volume between smallholder farmers and primary cooperatives, with over 9,200 transactions enabled by the service. Cooperative Bank of Oromia has a plan to scale and drive Community Pass technology adoption across coffee, barley, wheat and poultry value chains.
Photo credit: Mastercard
Part of Mastercard's Community Pass services, FarmPass is an app-based interoperable solution that establishes a digital identity for commercial farmers. The solution digitises payments and farmer financial histories, increasing market linkages and access to financial services. First piloted in Kenya in 2015, Farm Pass is also in operation in India, Tanzania, and Uganda, besides Ethiopia. Previously Mastercard said that it plans to bring Community Pass services to 15 million farmers in Africa by 2027.
16/05/24
Good reads: FAO study explores rural communication services in APAC
The Food and Agriculture Organization of the United Nations (FAO) and ComDev Asia have published the report “Rural communication services, Trends and experiences in Asia and the Pacific”. The study is part of a series examining rural communication services (RCS), which involve social interaction and the use of different media, from radio to digital technologies, and their role in rural transformation and family farming. Each study focuses on a specific region. This Asia and the Pacific report incorporates the experiences of digital RCS innovators in the region such as NGO Digital Green, which has reached more than 3 million farmers via community-based videos providing advisory and training services. It highlights the importance of participatory, farmer-centred approaches to both digital agriculture services and enabling policies. In relation to policies, it highlights as a key trend across Asian countries the common shift in agricultural and communication policies from a top-down approach to a more bottom-up, farmer-centric model.