How data drives innovation for smallholder farmers

18 October, 2018

Original Source: Rabobank

Smallholder farmers face the formidable challenge of feeding a booming population. To do that in Africa without imports would mean lifting the efficiency of farming there from its current 20-30 percent to 80-85 percent, as it is in the Netherlands. But how? With data-driven innovation, says Albert Boogaard of Rabobank Foundation.

Rabobank Foundation, the bank’s social fund, has for 44 years used its financial resources, network and expertise to help smallholder farmers in developing countries become self-reliant in the longer term. A year ago, in recognition of the increasingly important role of technology in this process, the Foundation appointed a Head of Innovation, Albert Boogaard. From his extensive experience as a banker with smallholder farmers in developing countries, he knows their challenges and sees the enormous potential that can be unlocked by harnessing data.

Smartphone revolution

“In countries with stable governments and decent infrastructure, what farmers lack most is access to finance and knowledge,” Boogaard explains. “With data-driven technology, we’re getting a better idea of what they need. And that allows us to develop better products and service models for them.”

The mobile phone has been a great enabler in rolling out digital innovation in the developing world. In East Africa, cellphones are relatively cheap and very popular. “For example, these phones allowed people to open and manage savings accounts or obtain a loan from home instead of travelling many kilometers to a bank branch.” Later, the arrival of smartphones meant a spectacular increase in the services at people’s fingertips: internet access, cloud applications.


But what is driving innovation now is data. Rabobank Foundation finances fintech start-ups that combine satellite technology, machine learning and cloud storage to design hybrid services. “In Kenya, for instance, our partner offers farmers a combination of insurance, finance and advice,” says Boogaard. “On their smartphone, farmers get information from satellites on land and weather conditions, perform financial transactions, agree on contracts, and converse with a chatbot in Swahili.”

Meanwhile, the data collected serves as input for the credit model the company is developing. The satellite data provides objective information about farming conditions in the area, and the farmer’s online transactions create a kind of track record. All this makes it easier to determine the risk involved. Boogaard: “The fintech company can identify which individual farmers represent a relatively low credit risk, and can offer them a loan they might not have been eligible for otherwise.”

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