myAgro does not offer credit to farmers. Instead, through our mobile layaway system, farmers can use their OWN funds to pay for high quality seeds, fertilizer and agricultural training.
Despite making tremendous strides, microcredit has not yet found a cost-effective way to serve smallholder farmers. According to IFC, in many sub-Saharan Africa markets annualized interest rates can exceed 75%, and accessing credit in most countries is not a guarantee for finding quality farm inputs on-time close to home due to distribution gaps in the market place. Also, few smallholder farmers have a secure income stream that can ensure full repayment of loans, so they often struggle to pay off loans and end up in debt.
By working closely with the clients who we serve, myAgro is able to understand their needs and design our services in a way that best meets those needs. This practice of listening to farmers and understanding how they already manage their money served as the catalyst for this new and disruptive financial tool, “mobile layaway”. By observing the payment behaviors of smallholder farmers, myAgro founder and CEO Anushka Ratnayake realized that they make purchases in small amounts, like $1 of sugar or 50 cents of oil, since they earn their income in small amounts. myAgro’s mobile layaway platform allows farmers to pay for their farm inputs the same way; instead of paying for a large package of fertilizer and seeds all at once and going in debt, farmers can now pay in small amounts over the course of six months. At the end of the payment cycle, they receive their farm packages right in their village, debt-free.
Colly Diouf is myAgro farmer in Senegal who prefers myAgro’s payment system because it keeps her out of debt. Before myAgro, Diouf had to take out loans to pay for her fertilizer and seeds.
“I paid 5,000 CFA (~8 USD) in advance to take out a loan, and then paid back the credit plus interest after harvest,” she explains, “which was difficult because the harvest wasn’t always good.”
After using myAgro’s mobile layaway system, Diouf increased her income and can now better support her family.
“The biggest advantage of the extra income I have from myAgro is my children’s education. Now, during the time of school enrollment, I have no debt to pay off like I did before with the loans, so I can focus on paying their school fees. I don’t have to worry about them being the last to pay their school fees, because now they can be among the first,” she explains.
Colly Diouf with her children
