What is the vicious cycle that affects African agriculture? According to Opportunity International, most African farmers are operating at just 40 per cent of their potential capacity, with this remaining the case because smallholder farmers lack access to financial services. They lack access to these services because of low crop yields, which prevent them from providing collateral to a financial institution so they can receive a loan.
This is a damaging scenario that has kept African agriculture – which accounts for about 65 per cent of the continent’s workforce and could, if harnessed correctly, be the “breadbasket” of the world – in the doldrums. Yet tech startups across the continent are working to unlock its potential.
Crowd-investing platforms in Africa such as ifarm360.com allow users to fund an Africa farmers’ production and make returns at the end of a farm cycle. The impact of such platforms is turning the startups into successful businesses in their own right. They are increasingly popular with investors, combining as they do the impactful and in-vogue sectors of fintech and agri-tech. There is also ample room for expansion. The prevalence of crowd-farming platforms, funding farmers and finding new ways of assisting the whole value chain, can only be a positive thing in this regard.