Big Data as a Tool for Financing African Farmers: Data-Driven Lending

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Big Data as a Tool for Financing African Farmers:

Data-Driven LendingSara Menker

Founder and CEO, Gro VenturesDecember 4, 2013

www.gro-ventures.com

12/4/13 - Gro Ventures. All Rights Reserved.

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The Future of Agriculture• By 2050, there will be over 9 billion people in the world. In

order to feed everyone, overall food production will have to grow by 70%

• With more than half of the world’s total share of uncultivated, arable land, Africa not only has the potential to feed itself, but to help feed the world

• In order to capture this potential, the African agricultural sector will require significant investment in order to address the considerable challenges and inefficiencies that are currently stagnating the industry


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The Anatomy of the African Farmer



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Without access to reasonably-priced loans and the protection offered by crop insurance (insured farmers in the continent number in the tens of thousands), farmers cannot afford

yield-enhancing agricultural inputs.

Inputs Expensive






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With low yields and expensive capital, agricultural processing and any type of significant value addition becomes difficult

and costly.

Value Addition Difficult




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Explaining Expensive CapitalInsufficien

t data

High Cost of capital

and service

sThe only way to capture the upside of African agriculture is

through timely and reliable data


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Data as InfrastructureGro Intelligence is Africa’s first privately funded agricultural big data company.

• Gro is an agricultural supercomputing platform that allows us to drastically increase the amount of timely and reliable data on African agriculture.

• In addition to using data from various sources, Gro will collect data independently, using phone-equipped farmers to become human sensors.

• Farmers have the most valuable information about agriculture in Africa.

• Farmer based organizations throughout Africa will be key partners for Gro Intelligence so that products designed are relevant and needed by the farmer.


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Focus on: BanksThe lack of agricultural data and effective financial tools has kept the role of banks in African agriculture minimal:

Less than 1% of outstanding African loans are to agriculture, despite the fact that the sector contributes more than 32% of continental GDP

Gro Intelligence provides banks with the reliable data and powerful tools they need in to capture the massive untapped opportunities in lending into African agricultural markets

Financial Sector

Banks

Insurance Companies

Investment Funds


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Data-Driven LendingGro Intelligence is creating a new wave of data driven credit models to enable large financial institutions in Africa to lend effectively.

• Access to capital is not enough for farmers. The capital has to come at a cost that is cheap enough to enable farmers to compete in global markets

• To make capital cheap, we need to embed fundamental realities of various crops into credit models so that banks have an understanding of agricultural markets

• Initial market is East Africa in collaboration with farmer based organizations, that will be the recipient of loans for shared mechanization equipment.


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Impact of Agricultural SupercomputingImpact on Global Businesses:

• With better data, banks will be better able to effectively allocate capital and loans to the sector

• Insurance companies can use data to create crop insurance products • With improved ability to source agricultural inputs, processing plants will run at higher

capacities

• Logistical operators can build out significantly with information about demand

• Seed and fertilizer companies can improve distribution plans and create seed varietals

• Trading companies and food conglomerates will get a more complete assessment of African supply and demand, enabling them to make better trading decisions and increase volumes


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Impact of Agricultural Supercomputing

Impact on Policymakers:

• With up to date information on market activity and transportation and infrastructure needs, policymakers will be better equipped to create and fulfill immediate policy objectives

• In the long term, policymakers will be able to prioritize investments and policy initiatives to ensure long term growth

• Policymakers will be better equipped to manage grain reserves that are used during production shortfalls and market disruptions


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Impact of Agricultural Supercomputing

Impact on Individual farmers:

• Agricultural and banking services will become cheaper and more accessible

• Infrastructure improvements will begin to address fragmentation challenges

• Access to market information will help farmers better strategize what to grow and where and when to sell products

• Improved education will enable farmers to reduce agricultural waste


Africa Feeds the World

Timely and reliable agricultural data

Increased access to capital and services

for farmers

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Africa feeds the world

Informed decisions by financial institutions,

businesses, farmers, and policymakers


Date post:	22-Nov-2014
Category:	Economy & Finance
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Big Data as a Tool for Financing African Farmers: Data-Driven Lending

Economy & Finance