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Using Technology to Improve Crop Yields for Smallholder Farmers

July 30, 2018
Bolaji Obe, VP, Citi Commercial Bank, Onesmus Mwangolo, Director, Local Corporates Head, Citi Kenya
Eugene Amusin, SVP, Citi Inclusive Finance

Smallholder farmers own small plots of land, usually less than an acre in size, and rely primarily on family labor to grow enough food for subsistence -- and if there's a surplus, for sale. However, even though these farmers produce four-fifths of the food consumed in Asia and sub-Saharan Africa, according to the United Nation's International Fund for Agricultural Development (IFAD), low crop yields and uneven seasonal cash flows often mean that farmers face persistent cycles of hunger and poverty. These cycles have existed for generations, but new approaches are emerging to enable smallholder farmers to more effectively obtain the financial support they need to create more sustainable livelihoods for themselves while growing the overall economy.

One such example is an innovative partnership between Citi and One Acre Fund, a non-profit organization working to expand financial inclusion and enable greater economic opportunity for smallholder farmers by removing a single ingredient: cash.

One Acre Fund offers farm supplies, including seeds and fertilizer, on credit to smallholders in Eastern and Southern Africa, and provides training in agriculture techniques and advice on how to better market their products and maximize their profit. The organization has been a client of Citi in the US since 2012 when it was serving 130,000 farmers across the region. Currently, One Acre Fund is on its way to meeting its goal of serving more than 1 million farmers by 2020.

To participate in One Acre Fund, farmers must join a village group that connects them to a local One Acre Fund field officer who coordinates and facilitates all transactions, distribution of supplies and training. In 2017, farmers participating in One Acre Fund earned an average of 65 percent more per year than non-enrolled farmers on the same activities, making it a highly valuable approach to economic development.

However, one part of this model presented a major challenge to both the farmers and One Acre Fund – the reliance on cash for loan repayments. Farmers would meet weekly with a One Acre Fund field officer to make their repayments in cash. The field officer would record their repayments in a receipt book and give each farmer a paper receipt, then transport the collected cash and deposit it into a district bank account. The entire process to update the loan balances and reconcile the bank statements would typically take up to two weeks, and was prone to uncertainty, leakages, inefficiency and insecurity. To address this challenge, Citi Kenya and Citi Inclusive Finance worked with One Acre Fund to shift farmer repayments from cash to digital using the Citi M-Pesa mobile collections solution.

This innovation dramatically improved the efficiency, transparency and security of the interactions between One Acre Fund and the farmers. Repayment fraud fell by 85 percent, processing time fell from 16 days to 2-4 days, and farmers reported a nearly unanimous preference for the transparency and convenience of mobile repayments over cash. Now, instead of collecting and managing cash, this shift to a digital solution enables One Acre Fund field officers to dedicate their time to working more closely with the farmers on improving their yields.

In 2017, One Acre Fund's farmers in Kenya made more than 4 million transactions via the Citi mobile collections solution with an average transaction size of $5.85 – that's more than 11,000 transactions per day on average.

This collaboration between Citi and One Acre Fund is about more than a bank providing a service to its client. It is an example of how working together to leverage technology and expertise against a complex set of challenges can lead to the co-creation of solutions that accelerate impact, enabling greater economic progress and financial inclusion for the communities we serve.

To learn more about how Citi is working with clients to enable progress please visit and follow #ProgressMakers across social media.

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