The Nigerian agricultural sector is very broad, with subsectors including poultry, piggery, fishery and crop farming among others. Although the country focuses more on crude oil and its derivatives as a source of foreign exchange, society is still an agricultural society.
Numbers from the World Bank show that the percentage of employment provided by agriculture is 36.38%. That shows how many people have their source of livelihood tied to agricultural ventures.
The number of people involved in agriculture notwithstanding, the overall productivity and profitability of the sector have been on a decline for decades, with governmental efforts only yielding minute results.
Some of the challenges faced by farmers in the sector include access to funding, outdated land tenure regulations, inadequate technology, and insufficient knowledge.
The agriculture sector has the potential to make a huge impact, provided strategic solutions are developed to tackle its challenges.
This is what Agritech startup, Crop2Cash has set out to help achieve.
How Crop2Cash started
Crop2Cash was founded in 2018 by Michael Ogundare, Seyi Paul and Emem Essien. The company is currently headquartered in Ibadan. Crop2Cash started out with a mission to digitize the entire supply chain of agro-processors and help them get the best quality of agricultural produce they obtained from farmers.
With its first product, Supply Base, the startup was able to digitize the value chain of some food crops and make it possible to carry out processing activities like weighing, and quality control. Details from these processes are collected in an inter-connected format that aggregates all the information to provide relevant insights when required.
Currently, the startup is working on helping farmers get access to the financing they need for the rainy (wet) season.
Challenges resulting from the Covid-19 pandemic
While it is obvious that the agricultural sector has been receiving some attention and is becoming more attractive to investors, the economic downturn caused by the pandemic makes it more difficult to navigate the processes of raising funds for businesses.
Michael Ogundare, Co-Founder and CEO, stated that this was the case, as raising funds for the farmers on the Crop2Cash network had become more challenging.
At present, the startup’s operations have been affected in other ways by the pandemic. The lockdown situation makes it harder to source for the resources that farmers need to have a successful season.
Communication is another aspect of the business that has been impacted negatively. To make sure communication continues unabated, online platforms like Zoom are been used to keep up with people. This has made it tougher for people to make decisions. It has also made it harder to close leads.
Crop2Cash’s agent network has been able to manage challenges around physical presence in locations.
To make the processes of accessing funds easier, Crop2Cash launched CashCards. This is a service that attaches a digital wallet to every farmer using their phone number as the primary identifier. The phone number is the account number.
Michael says the service is integrated with major banks in Nigeria, and farmers on the Crop2Cash network can receive money into their wallet from any bank in the country, this is after they have been registered by one of the startup’s agent.
Looking at the Cashcard service, what determines its effectiveness is the extent to which it can be used. Hence, a value chain has to be in place for it to be useful.
Crop2Cash has been working to integrate the agricultural value chain into CashCard through its partners. As a result, farmers with CashCard can receive money into the wallet as well as access services from banking to input provision, mechanisation, sales and insurance. The farmers can make and receive payments for services on CashCard.
Ogundare claims that Crop2Cash has reached over 35,000 farmers in states which include Oyo, Kebbi, Kaduna, and Jigawa.
Is Crop2Cash’ technology accessible to all farmers?
Only crop farmers are currently eligible for the startup’s Agritech services. However, Ogundare says that plans are underway to bring livestock farmers into the value chain as well.
To access the Supply Base, Cashcard, and Crop2Cash’s value chain, the basic requirement for the farmer is to have a mobile phone with GSM connectivity. With this, records of transactions and activities carried out by the farmer can be logged and utilised using the deep technology integration in Crop2Cash’s software services.
This works to give visibility to the transactions the farmers make as they do business and serves as a track record that investors can look at to make formal financing accessible when it is required.
Currently, when farmers need financing, they approach Crop2Cash field agents as a group.
“The agents are equipped with the Crop2Cash super app for agriculture and can perform KYC and have accounts opened for farmers in about 5 minutes”, the CEO clarified.
The agents can also aggregate demand for services needed by farmers and communicate it to Crop2Cash’ other partners in the value chain.
Since it launched, the Crop2Cash journey has been one of the products and partnerships. Major partnerships have come as a result of hackathons that the Agritech startup has been a part of.
Since closing its preseed round of $100,000 in May 2019, Michael says that the startup has looked out for strategic partnerships that can give it more visibility into the agricultural value chain. This has resulted in partnerships with organisations including FCMB, GIZ, Royal Exchange General Insurance, Ignitia, Airbus, and Traxi Continental.
There are still more inroads to make in order to have a robust value-chain available to farmers digitally. This and the access to finance is where Crop2Cash is focusing its effort.
If you are considering a more technologically oriented and result-driven approach to agriculture, Crop2Cash wants to be the Agritech company of choice.
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