Growing Ideas: African farmers hold the digital purse strings

Empowered farming with blockchain

Mobile payments and blockchain technology are helping farmers in Kenya increase their productivity. Thanks to Agri-Wallet they can invest in better-quality seeds and fertilizers.

During a trip through Africa, Ad Rietberg and Sijmen de Hoogh witnessed the inspiring impact of mobile payments. “People were telling us how smartphone payments had changed their lives,” recalls Rietberg. “They had never had a bank account before; some had never even had an address.”

Their trip resulted in the Dodore Foundation, established in 2010. The Foundation’s first project helped poverty-stricken mothers in a disadvantaged Nairobi neighborhood by paying ten euros in ‘child benefit’ every month via mobile phones. “Where it was impossible to reach these people in the past, we can now help in just two seconds from behind our desk in Amsterdam,” says Rietberg.

Other parties started asking Dodore to develop mobile wallets for healthcare and education projects. Recipients are paid subsidies directly which, thanks to blockchain technology, are earmarked for a specific purpose and cannot be spent on other things.

The potential of bringing a mobile wallet to agriculture was so clear that Rietberg and De Hoogh decided to market Agri-Wallet themselves. Rietberg explains the power of mobile money for improving food security and making global finance more inclusive.

What exactly is Agri-Wallet?

It is a mobile purse that farmers with smallholdings can use to manage their business’s finances. Agri-Wallet was not developed for donations – it is actually a kind of microbank that has a bank account, a savings account and a borrowing facility.

The Agri-Wallet is currently being used by six thousand farmers in Kenya through the 25 cooperatives we work with. The cooperatives pay 10 percent of their farmers in blockchain tokens using Agri-Wallet. The farmers can only spend these tokens in shops that sell agricultural products such as seeds and artificial fertilizer.

“Agri-Wallet was not developed for donations”

- Ad Rietberg, Agri-Wallet

What problem does it solve?

Small farmers generally have insufficient funds to invest in high-quality seeds or fertilizer, which can result in poor harvests. They often have no access to financing and if they are able to borrow money, it is usually not spent on the farm. By investing in good seeds and fertilizer, farmers can increase their productivity by 300 percent. That’s a life-changer – they can work their way out of poverty and produce enough food for the entire community.

Farmers who have insufficient money to invest can use Agri-Wallet to take out a loan, which is why we work with Rabobank Foundation. Farmers can borrow up to a third of the expected crop yield in blockchain tokens. That means that the loan can only be spent on agricultural products. After harvesting, the loan is automatically repaid through the cooperative payments.

A Kenyan farmer buys fertilizer with his Agri-Wallet.

What developments do you have in store?

At the end of next year we expect fifty thousand Kenyan farmers to be using our wallet. Thanks to the positive results, NGOs are asking us to develop the Agri-Wallet for other countries as well, such as Rwanda, Benin and Bangladesh. Our long-term aim is for our Agri-Wallet to be used in ten to fifteen countries throughout Africa.

Africa currently has a population of one billion, which is set to double in thirty years’ time. If nothing changes, the future population will not have enough food to sustain itself. That will lead to unrest and mass migrations. There is also an environmental impact because unless farmers learn to increase the productivity of the soil in their current plots, they will revert to felling forests to create more agricultural land.

When it comes to agricultural productivity per hectare, the Netherlands is a world leader. We have the know-how, the financial means and a moral duty to help the African continent. Wouldn’t it be great if Agri-Wallet could contribute to that?

This interview is part of the Growing Ideas series, in which we take a look at the future of food and agriculture and offer a platform to innovative companies in these sectors.