Big Data as a Tool for
Financing African Farmers:
Data-Driven Lending
Sara Menker
Founder and CEO, Gro Ventures
December 4...
The Future of Agriculture
• By 2050, there will be over 9 billion people in the world. In
order to feed everyone, overall ...
The Anatomy of the African
Farmer

12/4/13 - Gro Ventures. All
Rights Reserved.

3
12/4/13 - Gro Ventures. All
Rights Reserved.

4
Inputs Expensive
Without access to reasonably-priced loans and the protection
offered by crop insurance (insured farmers i...
12/4/13 - Gro Ventures. All
Rights Reserved.

6
12/4/13 - Gro Ventures. All
Rights Reserved.

7
12/4/13 - Gro Ventures. All
Rights Reserved.

8
12/4/13 - Gro Ventures. All
Rights Reserved.

9
Value Addition Difficult

With low yields and expensive capital, agricultural processing
and any type of significant value...
12/4/13 - Gro Ventures. All
Rights Reserved.

11
12/4/13 - Gro Ventures. All
Rights Reserved.

12
Explaining Expensive Capital

Insufficient data

Risk aversion

High Cost of
capital and
services

The only way to capture...
Data as Infrastructure
Gro Intelligence is Africa’s first privately funded agricultural big data
company.
• Gro is an agri...
Focus on: Banks
Financial
Sector
Banks

Insurance
Companies
Investment
Funds

12/4/13 - Gro Ventures. All
Rights Reserved....
Data-Driven Lending
Gro Intelligence is creating a new wave of data driven credit models to
enable large financial institu...
Impact of Agricultural Supercomputing
Impact on Global Businesses:
•

With better data, banks will be better able to effec...
Impact of Agricultural Supercomputing
Impact on Policymakers:
• With up to date information on market activity and transpo...
Impact of Agricultural Supercomputing
Impact on Individual farmers:
• Agricultural and banking services will become cheape...
Africa Feeds the World
Timely and reliable
agricultural data

Informed decisions
by financial
institutions,
businesses, fa...
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Big Data as a Tool for Financing African Farmers: Data-Driven Lending

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Sara Menker
Founder and CEO, Gro Ventures
December 4, 2013
www.gro-ventures.com

Published in: Economy & Finance, Business
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  • Big Data as a Tool for Financing African Farmers: Data-Driven Lending

    1. 1. Big Data as a Tool for Financing African Farmers: Data-Driven Lending Sara Menker Founder and CEO, Gro Ventures December 4, 2013 www.gro-ventures.com 12/4/13 - Gro Ventures. All Rights Reserved. 1
    2. 2. The Future of Agriculture • By 2050, there will be over 9 billion people in the world. In order to feed everyone, overall food production will have to grow by 70% • With more than half of the world’s total share of uncultivated, arable land, Africa not only has the potential to feed itself, but to help feed the world • In order to capture this potential, the African agricultural sector will require significant investment in order to address the considerable challenges and inefficiencies that are currently stagnating the industry 12/4/13 - Gro Ventures. All Rights Reserved. 2
    3. 3. The Anatomy of the African Farmer 12/4/13 - Gro Ventures. All Rights Reserved. 3
    4. 4. 12/4/13 - Gro Ventures. All Rights Reserved. 4
    5. 5. Inputs Expensive Without access to reasonably-priced loans and the protection offered by crop insurance (insured farmers in the continent number in the tens of thousands), farmers cannot afford yield-enhancing agricultural inputs. 12/4/13 - Gro Ventures. All Rights Reserved. 5
    6. 6. 12/4/13 - Gro Ventures. All Rights Reserved. 6
    7. 7. 12/4/13 - Gro Ventures. All Rights Reserved. 7
    8. 8. 12/4/13 - Gro Ventures. All Rights Reserved. 8
    9. 9. 12/4/13 - Gro Ventures. All Rights Reserved. 9
    10. 10. Value Addition Difficult With low yields and expensive capital, agricultural processing and any type of significant value addition becomes difficult and costly. 12/4/13 - Gro Ventures. All Rights Reserved. 10
    11. 11. 12/4/13 - Gro Ventures. All Rights Reserved. 11
    12. 12. 12/4/13 - Gro Ventures. All Rights Reserved. 12
    13. 13. Explaining Expensive Capital Insufficient data Risk aversion High Cost of capital and services The only way to capture the upside of African agriculture is through timely and reliable data 12/4/13 - Gro Ventures. All Rights Reserved. 13
    14. 14. Data as Infrastructure Gro Intelligence is Africa’s first privately funded agricultural big data company. • Gro is an agricultural supercomputing platform that allows us to drastically increase the amount of timely and reliable data on African agriculture. • In addition to using data from various sources, Gro will collect data independently, using phone-equipped farmers to become human sensors. • Farmers have the most valuable information about agriculture in Africa. • Farmer based organizations throughout Africa will be key partners for Gro Intelligence so that products designed are relevant and needed by the farmer. 12/4/13 - Gro Ventures. All Rights Reserved. 14
    15. 15. Focus on: Banks Financial Sector Banks Insurance Companies Investment Funds 12/4/13 - Gro Ventures. All Rights Reserved. The lack of agricultural data and effective financial tools has kept the role of banks in African agriculture minimal: Less than 1% of outstanding African loans are to agriculture, despite the fact that the sector contributes more than 32% of continental GDP Gro Intelligence provides banks with the reliable data and powerful tools they need in to capture the massive untapped opportunities in lending into African agricultural markets 15
    16. 16. Data-Driven Lending Gro Intelligence is creating a new wave of data driven credit models to enable large financial institutions in Africa to lend effectively. • Access to capital is not enough for farmers. The capital has to come at a cost that is cheap enough to enable farmers to compete in global markets • To make capital cheap, we need to embed fundamental realities of various crops into credit models so that banks have an understanding of agricultural markets • Initial market is East Africa in collaboration with farmer based organizations, that will be the recipient of loans for shared mechanization equipment. 12/4/13 - Gro Ventures. All Rights Reserved. 16
    17. 17. Impact of Agricultural Supercomputing Impact on Global Businesses: • With better data, banks will be better able to effectively allocate capital and loans to the sector • Insurance companies can use data to create crop insurance products • With improved ability to source agricultural inputs, processing plants will run at higher capacities • Logistical operators can build out significantly with information about demand • Seed and fertilizer companies can improve distribution plans and create seed varietals • Trading companies and food conglomerates will get a more complete assessment of African supply and demand, enabling them to make better trading decisions and increase volumes 12/4/13 - Gro Ventures. All Rights Reserved. 17
    18. 18. Impact of Agricultural Supercomputing Impact on Policymakers: • With up to date information on market activity and transportation and infrastructure needs, policymakers will be better equipped to create and fulfill immediate policy objectives • In the long term, policymakers will be able to prioritize investments and policy initiatives to ensure long term growth • Policymakers will be better equipped to manage grain reserves that are used during production shortfalls and market disruptions 12/4/13 - Gro Ventures. All Rights Reserved. 18
    19. 19. Impact of Agricultural Supercomputing Impact on Individual farmers: • Agricultural and banking services will become cheaper and more accessible • Infrastructure improvements will begin to address fragmentation challenges • Access to market information will help farmers better strategize what to grow and where and when to sell products • Improved education will enable farmers to reduce agricultural waste 12/4/13 - Gro Ventures. All Rights Reserved. 19
    20. 20. Africa Feeds the World Timely and reliable agricultural data Informed decisions by financial institutions, businesses, farmers, and policymakers Increased access to capital and services for farmers Africa feeds the world 12/4/13 - Gro Ventures. All Rights Reserved. 20

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