Kenyan Startup FarmDrive To Credit 3 Mn Farmers After Receiving Additional Investment
Nairobi based startup FarmDrive has received financial backing from Canada based company EWB. The Canadian investor ventures on nurturing early-stage enterprises by lending them financially and mentorship support. This is exclusive for startups in Sub-Saharan Africa.
The follow-on investment by EWB will allow FarmDrive to scale to USD 13 million of loan originations in 2019 with minimal losses and exceptional returns using, RiPe, a customizable lending engine. The engine allows lenders to plug in and access low-cost loans origination channels such as USSD, credit scoring, identity verification and a portfolio management suite.
FarmDrive uses data analytics and mobile technology to create financial profiles for farmers through a credit scoring model. When the financial institutions can view comprehensive profiles of a farmers’ economic performance, they are more likely to approve loans.
The four-year-old company seeks to address the lack of visibility and data that lenders cite in denying smallholder farmers access to financial services. It enables farmers to acquire funds using their phones. The ultimate goal of the startup is to reach out to the untapped African smallholder farmers and offer them financial support.
EWB Canada through its acting director Elena Haba expressed confidence in the growth of FarmDrive adding that “The company has the potential to shift market attention and fill the credit gap between creditors and underserved small business owners like smallholder farmers.”
She further asserted, “We believe that addressing this credit accessibility issue is a seminal first step towards building more inclusive and sustainable economies.”
FarmDrive was founded by Peris Bosire and Rita Kimani for the primary purpose of giving small-scale farmers easy access to digital loans. Having grown up in smallholder farming communities, the two (Kimani and Bosire) were inspired to start up the company that is currently of benefit to thousands of farmers.
It is estimated that the Agricultural sector in Africa contributes over 40 percent of GDP but receives less than 4 percent bank lending because of inadequate personal assets. The dynamic duo through FarmDrive have thus built a platform for smallholder farmers who didn’t have financial identities before to enable them access loans easily.
The move by EWB Canada to invest in the startup has come two years after Kenya’s telecom company Safaricom announced its investment in the Nairobi-based enterprise.
Featured Image Courtesy: TheStar