Small-scale farmers are critical to Bangladesh’s food supply and overall economy and women make up about 58 per cent of the agricultural work force. Despite this, women rarely control the land or sale of their produce or cattle, traditionally lack significant decision-making power over household agricultural income and their contributions are largely overlooked. Moreover, the sector does not offer enough of a profit margin to attract younger generations who tend to migrate to urban centres in search of better paid work.
Bangladesh-based company iFarmer, is helping change these dynamics by working to garner recognition of female farmers and facilitate access to resources to grow their businesses and agency within the household. The company enables small-scale farmers and agribusinesses to access finance, insurance, inputs and training on crops, livestock, fisheries and poultry, as well as information on market conditions and weather advisories.
“We are working to break down the barriers holding back women farmers by giving them greater access to financial resources, quality farming inputs and market access,” explained iFarmer’s CEO, Fahad Ifaz.
“We believe it is vital to acknowledge women’s work and give them access to the resources they need,” Ifaz said. “Increased opportunities for women in the sector can significantly impact agriculture-driven growth.”
Ifaz firmly believes that market-based solutions are the most sustainable way forward for farmers and the sector. “We aim to increase farmers' income and improve their livelihood by providing bundled services of finance, access to inputs, timely advisory and access to the right markets through our platform,” he added.
IFarmer was one of the winners of the 2019 Women MSME Fintech Innovation Fund, implemented by ESCAP and UNCDF under the Catalyzing Women’s Entrepreneurship (CWE) programme, with the support of Global Affairs Canada.
The company’s first challenge to solve was how to help farmers build up their financial data in a cash-based sector so they could access low-cost collateral-free financing to purchase inputs and machinery, and identifying how to help banks invest in agriculture.
With the innovation fund support, Ifaz’s team was able to develop an app called Sofol through which farmers can get access to low cost, collateral free financing. Once signed up, the company offers in-person training from agriculture experts, and farmers can access services such as higher-quality inputs, agricultural advice, insurance advisories, as well as text-message based crop and weather alerts, and soil testing.
The app simultaneously collects farmers’ financial data, verifies against a national ID database, and creates a credit score that banks can use.
“We work with several financial institutions and lending partners and make it as easy for them as looking at a dashboard where they can see the farmers’ data and credit score, and approve an application. In return, banks can offer loan interest rates as low as four per cent, as opposed to the traditional interest rates for farmers of up to 25 per cent,” Ifaz said.
Whereas farmers would often have to wait as long as 45 days for a loan, working through Sofol they can obtain a loan within half that time.
Connecting farmers to individual retail investors is another iFarmer innovation that allows anyone to use the app to invest in a particular farm. Money is transferred to iFarmer who then transfers the money to the farmer’s bank account. The average investment ticket is about USD 1,000 and investors receive their return monetarily.
iFarmer has more than 130 collection centres where farmers can sell their produce once it is sorted and graded. It is then taken by third party logistics services to iFarmer warehouses or directly to the buyer. Farmers are paid on the spot, while the company is paid by wholesalers and institutional buyers later.
However, connecting women directly to sales points to avoid layers of middlemen has proven challenging, as most women traditionally do not leave the home. Incentives such as higher payments for their produce were not successful. iFarmer’s innovative solution of mobile collection vans that can travel closer to the homes of women farmers has had better results.
Under another joint initiative between UNCDF and FAO, iFarmer has connected 10,000 women and men farmers to the forward market through collection centres across the country.
