Satellite data key resource in financing food security
Together with the Platform for Inclusive Finance (NpM) and the Netherlands Space Office (NSO) Rabobank Foundation organized a conference on Geodata for Inclusive Finance and Food.
Information based on satellite data helps small farmers in developing countries to improve their harvests. This information is so detailed as to enable precision agriculture. Farmers can for example be alerted by SMS that it’s time to fertilize, irrigate or harvest. The harvests increase significantly in quantity, but certainly in terms of quality. “This lessens the risk of farmers being unable to repay their loans and increases the probability that banks will be prepared to lend to them. Access to financial services is essential to farmers to allow them to grow and so be able to produce sufficient food,” says Pierre Van Hedel, director of Rabobank Foundation.
Better assessment of farmers’ creditworthiness
Financed by the Ministry of Foreign Affairs, the Netherlands Space Office (NSO) is conducting twenty projects based on satellite data with applications for farmers in developing countries. What is currently still lacking is the development of these applications for financial institutions. Using such information banks would be in a better position assess a farmer’s creditworthiness. It would also reduce costs for financial institutions, as banks would no longer have to pay individual visits to the farmers in question to see how their crops are doing but instead gain an insight on the basis of satellite monitoring. Van Hedel: “Whether it’s about the extension of working capital, loans for investment or insurance, banks can use geo-information to ascertain where the most opportunities lie for increased and improved food production. That’s particularly the case where the satellite information is coupled with other data.”
“Banks can use geo-information to ascertain where the most opportunities lie for increased and improved food production”
The importance of adequate regulation
Existing innovations and opportunities opened up by satellite data and other ICT applications were presented at the conference. Smallholders are increasingly using ICT applications. Training farmers to use ICT applications on a wider scale is essential. Universities, companies, governments, UN organizations and NGO’s are working ever closer together to achieve this. The publication, which is based on an analysis of 250 projects, shows that in order to implement these innovations successfully more attention must be given to ensuring adequate regulation.
Contribution to sustainable development goals
Within the framework of its contribution to UN sustainable development goals NpM – of which Rabobank Foundation is a member – is looking into ways of enhancing and increasing the sustainability of finance to entrepreneurs in developing countries. Rural financing is being afforded extra attention. “The financial sector has a significant role to play in areas such as food security, climate and entrepreneurship’, says Josien Sluijs, director of NpM, Platform for Inclusive Finance. “Smallholders account for 70% of world food production and therefore play an essential role in ensuring food security.”
Read the publication 'Geodata and ICT Solutions for Inclusive Finance and Food Security'