Safaricom Spark Venture Fund has today announced its investment in FarmDrive, a data analytics startup that connects small-scale farmers to financial services.
FarmDrive has developed an alternative credit-scoring model based on mobile phones and machine learning algorithms. It allows farmers to access financing using their phones.
FarmDrive seeks to address the lack of visibility and data that lenders cite in denying smallholder farmers access to financial services. FarmDrive’s goal is to bring millions of smallholder farmers into the formal financial sector through the simple mobile phones already in their pockets.
“In an era when market uncertainty is creating new challenges for the agricultural sector, mobile-based technology solutions like FarmDrive can empower farmers with the critical access to finance and to help expand their access to other essential services,” said Bob Collymore, CEO, Safaricom.
Leveraging Android and SMS, the mobile phone application allows farmers to track their revenues and expenses, and as well as apply for loans. The data is then fed into a credit-scoring algorithm, alongside key satellite, agronomic, economic data, to help improve yields.
By analysing these various datasets, the algorithm is able to generate credit scores for farmers.
In addition to the credit scores, FarmDrive also develops decision-making tools that financial institutions can use to create products that fit the economic and agronomic needs of smallholder farmers.
FarmDrive becomes the fifth investment by the $1 million Safaricom Spark Venture Fund since its establishment in 2015.
FarmDrive was co-founded in 2014 by Rita Kimani and Peris Bosire, both Computer Science graduates from The University of Nairobi.
It was inspired by the co-founders’ experiences growing up in smallholder farming communities, and has won numerous global awards. So far, 3,000 farmers have registered with FarmDrive and over Kshs13 million (US$130,000) accessed in loans.
According to Ms Kimani, the boost from the Safaricom Spark Venture Fund will go towards supporting the next phase of growth by building FarmDrive’s innovative credit scoring model and enhancing its human resource base in research, analysis and insight generation.
“We are excited about this investment because it enables us to scale this innovation, score more farmers, unlock more capital, and grow the agricultural loan portfolios of our financial institution partners. This is all good for the inclusive development of our country,” she said.