For Robert Madziva, founder of Digital Mobile Africa (DMA), achieving food security and boosting smallholder farmer incomes go hand in hand.
Madziva is a Zambian-born agrifood entrepreneur from a farming family. At a young age, he witnessed firsthand how his parents’ commercialization of agriculture significantly transformed their lives for the better. This, he tells AFN, is what really drew him to working in agriculture.
Now he is helping smallholder African farmers increase their productivity and make the shift from subsistence to commercial agriculture.
“When you look at the issue of food security, and the growing number of people in the world, you start seeing that we are actually doing a disservice to the smallholder farmers,” he says. “They are the ones producing most of what we eat, but we are not helping them to actually become more commercial, which means they only grow what they eat and save a little bit as subsistence farmers.”
With its agribusiness marketplace and agrifintech services, DMA takes a wholistic service approach to helping farmers increase their incomes. Starting out with Tanzania, Rwanda and Zambia, DMA is providing smallholders with a platform to sell their produce, purchase inputs and access credit.
Read on for more about Madziva’s (RM) journey and how his company is helping smallholder farmers.
AFN: Apart from your upbringing, what else led you to agrifoodtech?
RM: We have a food insecurity crisis, which is caused by the world not focusing on ‘the people of the moment’. These are the farmers in the rural areas who are totally excluded from everything. You can talk about financial inclusion, digital inclusion, access to technology and infrastructure. Yet, we are all eating the same food that these people grow.
I hold a degree in agribusiness and a Master’s in computing science. So merging the two of them and creating a business out of it just made sense for me.
Before that I worked in the payments industry in Tanzania and I started to see that people were struggling with financial inclusion. In fact, financial inclusion became a buzzword in 2014, 2015, thereabout.
I saw that actually, financial institutions excluded the people in the villages, many of them farmers. I started thinking of what could be done to help them scale up and improve in terms of their knowledge of agriculture and become more commercial.
AFN: Why did you start DMA?
RM: When we started the company, we had the mindset that farmers need inputs and markets and we went in to provide those things. So firstly, we took a ten-ton truck of fertilizer to a remote village and within one hour, the product was gone.
When we started to tackle the input supply, we saw a lot of other issues around ecosystem. This led us to realize we need to treat the farmer as a key ecosystem player, then create linkages across the whole chain, so that it’s easier for the farmer to become more productive.
AFN: What about the fertilizer subsidies the government introduced this year?
RM: The distribution of such services can be a challenge. Usually, the subsidies are offered at a large input distributor in the city. This means that the farmers have to travel and queue for the fertilizers. If the government would work closely with people who are already working with farmers and have the systems, we can just integrate and be able to actually offer the same products at the last mile, and the farmer doesn’t have to move.
AFN: What services or technologies does DMA offer to help farmers?
RM: Farmers are producing maybe 80% of what we eat but they don’t have the technologies, finance, or access to markets and inputs that a commercial farmer would have.
But at the same time they have to deal with middlemen. Farmers are not technologically savvy, or at least not using technology. The middlemen want to keep this information asymmetry ongoing because that’s how they get their profits.
We developed a platform that is used by agents. We have trained agents on the things that the farmers don’t have: inputs, knowledge, markets and finance. Basically, the agents are our extension service officers who are mostly youth that can handle and understand an Android device.
Through [the agents], we can send the farmers information about weather. We can ensure farmers apply the correct inputs and use the correct type of seed for the environment or soil type. This way we are actually creating commercial farmers, because that’s what a commercial farmer does.
We acquire agents by going to agricultural colleges and universities and identifying young people who are keen on technology but also very astute on trying to help smallholder farmers. Through their passion of agriculture, they have knowledge that is good enough to dispense agronomic information.
What we have done is to simplify it for this agent to be able to go to the farmers and take input orders, which is now the business model that we have. We take orders from the farmers directly and we position those orders on our platform, so that input suppliers on our platform can fulfill them.
We also take the produce that’s coming from these farmers and we sell it via our platform. The farmers can utilize a mobile money wallet that’s linked to our platform to receive the money when we sell the produce.
So, what we are doing is creating a rural e-commerce platform that allows rural dwellers to participate in digital trade.
We now have 62 agents and one agent can comfortably serve between 500 and 600 farmers. Our aim is to grow the number of agents to at least 5,000 in Tanzania alone. Not only will this help us create jobs for young people, but it will also help us make agriculture lucrative to the youth.
AFN: How do you help farmers access finance?
RM: We work with banks like the Tanzania Commercial Bank, Equity Bank or any bank that wants to work with farmers. Then we relay data like what the farmer plants, their farm size, prediction on their harvest, how much produce they’ve sold through our platform or any other information to help the banks determine creditworthiness of the farmers.
Most rurally placed farmers we work with are in savings groups. We then relay data on what they have already saved not only as a group, but also individuals to help them access this credit.
This is done after we ask them if we can share the data that’s relevant for the loan applications.
So far, we’ve been able to supply around $300,000 worth of inputs.
AFN: How many farmers have accessed financing through you?
RM: So far it’s about 6,000 farmers, but we want to be able to do this for all farmers on our platform starting by lending them inputs rather than cash.
We can lend the inputs, and because we are off-taking, we sign smart contracts with them, so that we can obtain produce, and then we will deduct our money from them once we sell the produce.
AFN: How many farmers do you have on your platform and what’s the gender split?
RM: Currently we have around 600,000 farmers. Around 38% of them are youth; 54% are women.
We target all farmers, but we noticed when it comes to selling the produce, the men are at the forefront. When it comes to doing the work, women are at the front. So there are a lot of women who are actually doing the work but not getting the benefit.
This is why we included a wallet on the platform. Through the wallet they can borrow money for inputs and receive the money from the sale of their produce.
Once we have sold the produce, as long as they have the wallet and we know they delivered produce, the money is sent to mobile money wallet.
AFN: Does this make DMA unique compared to other platforms?
RM: We take an ecosystem approach in helping farmers improve their incomes.
My team and I believe that this is the way to go. I think most people who are doing our business are attacking farmers’ challenges from a siloed approach. They either do the input supply or the off-taking. But when you come to it, the farmer is always excluded from any one of those things. We use technology to actually cover those gaps.
We tried that siloed approach and saw we were actually doing a disservice to ourselves, but also to the farmers because there’s such a big opportunity, especially for Africa, to feed the whole world. And it’s by doing this from the ground up that we can help farmers improve their incomes.
AFN: What impact have you seen so far working with these farmers?
RM: We’ve reduced a lot information asymmetry and helped farmers access access markets and increase their incomes by up to 4X.
We’re also seeing companies that want to work with farmers come to us to distribute say energy efficient cooking stoves , because we already have a relationship with these farmers.
AFN: How have you been operational so far since you touch all these bases?
RM: We started working with NGOs or international development organizations like the UN Capital Development Fund, World Food Programme and MasterCard Foundation. This is because they already had reached a point where they have helped the farmers to a certain extent, especially with their livelihoods.
We then came in and saw the need for sustainability beyond their projects, which could be achieved by helping these farmers take their produce to market, where NGOs do not go.
Through working these organizations, we have been funded over the past three years to a tune of $1.2 million.