Through the use of new technology and data, smallholder maize (and also sorghum, potato, and bean) farmers have gained access to agricultural inputs on credit, and significantly improved their yields and incomes.
Difficult to finance
Until recently, smallholder farmers were a difficult group to finance. The farmers live in remote, inaccessible areas, so manual approaches to serving this demographic are expensive and unprofitable, particularly given the small loan sizes that farmers seek. Moreover, farmers have little in the way of financial records, which makes financing more risky for standard banks. Despite wide consensus about what these farmers need to dramatically increase their production (high-quality inputs, advice, and insurance), the vast majority still can’t access these tools.
“Now we’re growing fast, because Rabo Foundation stepped in at exactly the right moment.”
Apollo Agriculture is working to overcome these challenges. Their innovation is twofold: first, they build credit profiles for unbanked smallholders using machine learning models that process large volumes of customer data, including satellite data of customers fields. Second, they have built automated operations that are designed to meet farmers’ unique needs in a more efficient, and cost-effective way. For instance, over the course of the season, Apollo customers receive guidance on farming techniques through highly engaging automated “IVR” phone calls. This IVR platform is one example of how Apollo’s digital approach allows them to communicate and engage with customers throughout the customer lifecycle in an informative and interactive way, regardless of literacy levels and remote locations.
Apollo’s goal is to enable the transition from subsistence to commercial farming.
“The difference that Apollo has made for me is that during the training I have learned to apply the right amount of fertilizer to improve the spacing and to topdress the crops,” says Apollo customer and farmer Augustine Kimeto. “When I compare the new crops, my maize now has two to three cobs a stem as compared to one cob before.”
Apollo received a loan from Rabo Foundation in 2017, their first year of lending. According to co-founder and CEO, Eli Pollak, that loan was essential. “You need data to build a credit model as a start-up company, but we didn’t have any yet. So in 2017, we provided credit to all of the farmers who applied for it. That might have been unorthodox, but it was a way for us to ensure that our model is not trained against a biased data set. Rabo Foundation understood that and offered us a ‘lend to learn’ loan. Once we had collected the data we needed, Rabo Foundation offered us a working capital credit line to scale up. Now we’re growing fast, because Rabo Foundation stepped in at exactly the right moment.” In 2018, Apollo scaled their lending 5x, providing smallholder farmers in Kenya with financing and support. An assessment conducted with Apollo customers shares that: 9 out of 10 farmers surveyed experienced major increases in their yields in 2018, and 85 percent saw their standard of living improve. Eli adds, “Eventually, we aim for the farmers to become eligible for commercial financing.”