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  FinTechs in Nigeria have not yet explored the opportunities of solving a series of problems plaguing the Nigerian agricultural sector. This problem is a global situation. Many FinTechs are yet to see the possibilities of delving into the agricultural sector fully.
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Many FinTechs are rather focused on businesses outside agribusiness. FinTechs rarely partner with businesses in the agro sector, due to perceived limited opportunities. Most often, the partnership is often tied to providing funds and carrying out lending services to small and large farm holders. In this article, we shall spot out opportunities in the agricultural sector where FinTechs can explore and boost productivity and growth.
  1. Improving Farmers’ Access To Funding And Simplified Payment Methods

In Nigeria, many farmers are financially excluded. These farmers often have desires to grow crops during planting seasons, acquire new farming equipment, and finance more productive farming techniques, but are limited by funding. Due to their rural confinement, they don’t have access to funds. Furthermore, the strings attached to bank loans often discourage farmers. Worst still is that banks are often far from these rural areas where these farmers dwell. Most banks see these farmers as high-risk investments. According to CEO at FarmLead, Brennan Turner,
“Further, the payment is usually delayed by one to three business weeks, which can sometimes create cash flow challenges, depending on the time of year.”
In regions of the world where banking infrastructure is underdeveloped, like Nigeria, FinTechs can provide mechanisms for proper identification to ensure borrowers repay their loans. These solutions can also use real-time data from AgTech sensors and AI-enabled technology to calculate the costs and risks of farmers based on their geography.
  1. Dealing With The Gap Between Farmers, Retailers, And Manufacturers

The Nigerian agricultural sector is a multi-billion dollar industry that relies on manual processes and spreadsheets, with little or no real-time data. This has hampered effective communication and information about seedling prices, market predictions and industry forecasts.
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The lack of real-time data had led to poor market investment among stakeholders and have even made stakeholders miss opportunities due to poor real-time data in the sector. Without real-time data, there seems to be a big disconnection between farmers, retailers, and manufacturers when it comes to market pricing. The farmer, the retailer and the manufacturer all live in a different reality when it comes to how agriculture works and operates. This is where FinTechs can come in and create an ecosystem that brings together all stakeholders. This ecosystem bridges the communication and information gaps, especially about market pricing and projections. Furthermore, FinTechs can provide season data of agricultural outputs for each sector of the industry, especially about sales, expenditures, and marginal profits.
  1. Providing A Better User-friendly Means For Farmers To Purchase Crop Inputs

In Nigeria, it is common to see both large and small farmers write cheques to pay for crop input, as these transactions are usually in the tens of thousands to millions of Naira range. There are often problems with knowing the right purchasing unit to go for. The problem of who controls the price is very common in the agricultural sector. The variance in the crop purchasing experience isn’t strictly limited to payments. In the agricultural industry, it’s tough to know who owns the price. This is due to the abundance of “programs”, which are complex configurations of deals and promotions for farmers. There is also the problem of granting farmers’ incentives due to small and big farmers. Most often, numerous agricultural programmes drown the farmers and retailers, because these programmes do not directly address the specific needs of these farmers and retailers. For example, a single program may offer discounts for farmers if they buy a specific number of bags of seed with a specific type and amount of herbicide and a specific type of seed treatment. This creates a form of complexity that stresses the retailers and farmers. FinTechs can come in streamlining this complexity, by digitizing the crop input purchasing experience. Rather than paging through seed guides, farmers can purchase crop inputs with the same digital-first, user-friendly experience they have when purchasing anything else online. Featured Image Source: Linkedin
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This article was first published on 4th January 2022


Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.

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