A presentation by Stephen Muchiri, from Eastern Africa Farmers Federation (EAFF) and CEO of e-Granary, about a commercial digital platform linking smallholder farmers in East Africa to targeted services. The e-Granary platform, an ambitious venture initiated by the EAFF is in its relatively early days serving producers in Kenya, Uganda and Rwanda. It aims to strengthen their position with other actors such as buyers, input traders and financial institutions, and it has generated many lessons and challenges to overcome. The presentation was given at a webinar on using technology to increase market and finance access for smallholders hosted by the International Institute for Environment and Development (IIED) on 24 March 2020. More details: https://www.iied.org/webinar-using-technology-increase-market-finance-access-for-smallholders

1. ………………………………………………………………………………………………..
Stephen Muchiri
CEO EAFF
“Using technology to increase market and finance access
for small holders – lessons from East Africa”
24th March 2020

2. Content
1. Context
2. What affects our agriculture
3. eGranary – business model/updates/current
reach/challenges
4. Lessons
5. Partners

3. Context
Why digitize?
Agriculture in sub-Saharan Africa is very fragmented, its
only through a virtual innovation that we can aggregate all
farmers and all actors, the eGranary provides a mobile
based virtual platform where farmers are aggregated for
input markets, output markets, services – finance/
mechanization and extension

4. What is affecting our agriculture /approach to solution?
2. Lack of Data on Farming
(for decision making on – attracting
investments & innovations in
technology, financing; value addition;
advisory services & policy)
Farmers have “LOST POWER” in the
Market
No silver bullet
1. Low Collective action by farmers - joint output marketing; ease of
access/provision of services; joint input procurement; efficient technology use/
up-take; phl mgt; poor partnerships; value addition prospects

5. Mobile
Phone
• Over 90% mobile
penetration
• 15% smartphone
penetration
MPESA
(mobile
money)
• Mobile payment
penetration is over
40% of households
and growing
• >60m Mpesa mobile
money users in the
region
Farmer
• 70% of adult
population in East
Africa works in
Agricultural sector
Farmer org
COOP/self-
help group
• 3 out of every five EA
farmer is a member of
a cooperative/farmer
org/self-help group
etc
Mary
A TYPICAL FARMER’s PROFILE & CHALLENGES THEY FACE
Has...
Uses...
Is a...
Is a member of...
4 major issues they face
1. Market – reliability and
consistency
2. Financing & Insurance (credit,
payments crop insurance)
3. Resources -inputs,
equipment, labour)
4. Knowledge - business finance
and agronomic)

6. e-GRANARY is a mobile based platform that provide 4 in 1 services – aggregates
farmers for input, output and services markets (financial, insurance, extension and
mechanization).
e-GRANARY value proposition is an ecosystem that will benefit ALL the stakeholders
that engage on the platform and its various connected services.
For Farmers, it will allow the sale of farm produce at the best price, access to
certified inputs and affordable tailor made financial solutions. (Farmers have to be
formally organized and have expertise/experience in the value chain)
For Financial Institutions, it will allow access to bankable and de-risked smallholders
to market various financial products. In fact, the loan will be income based while
leveraging the group structure in farmer organizations to reduce risk. Insurance is
provided as a bundled product with the loan. EAFF shall negotiate on farmer behalf
For buyers, it allows access to better quality traceable produce in a large
marketplace at competitive price without the exorbitant premium charged by
middle man currently. EAFF negotiates prices and contracts at start of the season
eGranary - BUSINESS MODEL VALUE PROPOSITION FOR
STAKEHOLDERS

7. It’s imperative to note, however, the following:
1. Technology is not a silver bullet
2. We need to build the (e-Granary) technology on a sound and feasible business plan
3. We need to invest a lot on relationships that are not tech-based – between farmers,
between their organizations, with other actors; if these relationships add value then
the technology will add additional value
4. The business model must be market oriented – so that along the chain down to the
farmer we can build targets which if met will make the entire chain sustainable
5. The eGranary platform thus will generate data that can be used to inform specific
and general policy, negotiate better engagements terms with offtakers, lower
transaction costs for acquisition of clients by credit and insurance companies,
enhance effective delivery of extension services.
eGranary - BUSINESS MODEL

8. BUSINESS MODEL - CORE SERVICES PROVIDED TO FARMERS
Crop Management
Knowledge and Tools
Organizing
Learning Groups
Policy and
advocacy
Group Purchase of
Agriculture Inputs
Coordination of
Contract Farming
with Millers / Buyers
Coordination of Post-
Harvest Services
Coordination of Farm
Equipment Leasing
Micro-finance
and
Micro-insurance

9. Current reach
• Kenya (240,000 farmers registered – maize, beans, soya bean, green grams);
Uganda (15,000 farmers registered – maize, beans, soya bean, sim sim) and
>5000 now registered in Rwanda for Maize and beans
• We are currently reviewing our service delivery model in partnership with the
Institute for sustainable development (IDH)
• Biggest hurdle so far is the financial services partner, because of collateral
demand ( in Kenya was up to 40% of loan value; now its 10%, in Uganda it was
14%) and interest rates – in Kenya was as high as 36%. So far only a Micro-
Finance institution has been working with us.

10. Challenges
1. Technology and other set ups are slow e.g. in Uganda and Rwanda it took 8
months – we needed to do regulatory studies, in-country hosting set up,
USSD acquisition, partner set up, Human resources set up.
2. Farmer coordination to generate homogenous data can be a challenge
3. Synchronizing the different partners resulted in delays say in delivery of
inputs, collection of harvest, etc
4. Quality of final product – high moisture content/ afflatoxin/ poor grading
5. Price fluctuations due to government directive on pricing, market glut due to
imports
6. Repayment defaults by farmers sometimes due to climate change, group
governance

11. LESSONS LEARNT TO DATE
 Reliable Markets and certified inputs access is a major concern for farmers across all the regions we are
operating and farmers are eager to be part of program offering a solution in these two areas.
 Important lessons on maize procurement pattern that informs production planning.
 Climate change is a challenge and an opportunity to innovate financial solutions like insurance /credit
 Group guarantee is instrumental to build trust and the success of the program (20:80 approach).
 Bundling services reduces transaction costs, therefore adding value to farmers margins
 Having a “farmer organization” important to mobilize partnerships, negotiate better terms (prices/
compensations, aggregation etc)
 Farmers are willing and able to payback loans if
appropriately priced and structured
12
Credit
 There is increased demand for insurance
by farmers
 Awareness on insurance and trust
building is required with farmers
 Insurance is best delivered when
bundled with input loans
Insurance
Overall

12. PARTNERS

13. CONTACTS: info@eaffu.org;
www.eaffu.org
205 David osieli road, Westlands
Nairobi -KENYA
Tel: +254 20 445 1691