Originally published on Forbes.com
In April 2022, myAgro’s Founder and CEO Anushka Ratnayake gave a TED Talk about the organization’s impact in West Africa. myAgro had recently been selected as part of the Audacious Project, an initiative that catalyzes social impact on a grand scale by selecting and nurturing a group of big, bold solutions to the world’s most urgent challenges. We invite you to read and watch her talk to hear the stories of Setou and Demba–a farmer and a Village Entrepreneur who have found success with myAgro–and to learn more about myAgro’s audacious plan to reach 1 million farmers.
In West Africa, where I live, there are over 60 million smallholder farmers. They are the world’s largest group of people living on less than $2 a day. Many go hungry each season because they don’t grow enough to eat. Government subsidies for fertilizer and seeds, which can be as much as $90 million a year for a single country, don’t meet full demand and often are directed towards larger farms and male farmers, even though women are the backbone of farming in Africa. And despite these investments, yields per hectare haven’t increased significantly in over 4 decades.
Smallholder farmers earn the bulk of their money at harvest time, but 9 months later at planting time, they are cash poor again. The prevailing assumption is that farmers need grants, subsidies, or credit to be able to purchase seeds and fertilizer. But we’ve found something different.
The fundamental problem isn’t that smallholder farmers have no money to invest in their farms, it’s that they don’t have it when they need it. I first encountered this paradox in 2008, when I was working in microcredit: Farmers were asking things like, “Can I over-repay my loan for next year’s loan? Or can I pay for my loan a year in advance?”
They were using the language of credit, but actually describing a need to save. But do they really have any money to save?
It turns out that they do – just in very small increments. They might sell a few eggs for a dollar, sell a goat for 10, or work on someone else’s farm, and over time, that money adds up. But most farmers live far away from banks, so they carry their money with them or keep it at home, where it’s at risk of theft, fire, or flood. Even without those risks, money at home is tempting, right? It is hard to hold onto that cash – and sometimes the smartest thing to do is to spend it.
The real problem farmers face is that they lack a safe place to save money. If they could save, they could reliably buy what they need to make their farms more productive and resilient to climate change. This is a $100B annual problem in Sub-Saharan Africa.
Setou, a peanut farmer in Mali, was running into this problem herself. When we met in 2014 she was overwhelmed. Climate change was hurting her harvest and she didn’t have money to rent a cow to plow her farm, let alone cash for improved fertilizer and seeds.
But we realized she could save for what she needed if she had a safe place to put aside money throughout the year. Our nonprofit, myAgro, helps farmers in Mali, Senegal and Tanzania save little by little throughout the year so they can afford our farmer-tested package of seeds, fertilizer, and training. Together, these improve their harvest and generate a 3x return on their investment.
Here’s how our program works: We start with a local entrepreneur, like Demba. We equip him with a smartphone and our app – myAgro Connect – to manage his work and sales territory.
At harvest time, Demba asks farmers in his village if they want to purchase a myAgro plan to maximize profit and nutrition. Once farmers sign up they can save towards their goal over the course of 9 months.
To collect their savings payments, we replicate the way people buy prepaid talk time for the phone. It’s really simple: you buy a scratch card, scratch off the back and a unique code appears which you text in to validate the payment.
We use this same technology to enable farmers to save up for the planting period. Because farmers are familiar with how it works, they trust it and use it correctly. It’s also much more secure than traditional payment methods – usually, cash is handed over to a field agent without any receipt. With myAgro’s model, we know in real-time who has paid money, and how much the Village Entrepreneur needs to transfer to us. A farmer can also pay directly via mobile money, if they have it.
Farmers are able to save up in a way that is joyful – they often hold onto their scratchcards and look at them with awe and pride at how much they were able to save over time. It’s transparent, convenient, and low-stress. When was the last time your bank made you happy?
Designing the savings plan this way has made it easier for women in particular – They appreciate the democratic access to seeds and fertilizers, and the savings model is suited to the small amounts of money they earn each week at local markets. In a region where only 20% of women have access to a bank account, women account for 60% of the farmers who set aside money each month with myAgro.
In 2021, the average myAgro farmer grew 177% more food than non-myAgro farmers in the same regions. This increase translated to nearly $200 of additional net income. For a farmer living on $1.50 per day, that’s a 35% increase.
By expanding the purchasing power of farmers, the financial prospects of young entrepreneurs like Demba are also increasing.
Before myAgro, he was doing okay selling goods on his own. But now selling more seeds and fertilizer via this model, he is thriving. Demba has bought two freezers to expand his business and has a dream of building a house. He deepened his customer network to serve over 400 farmers in 2021.
Using a savings-led model has many benefits: For the farmer, it lowers stress, and for our organization, it means we don’t need to raise massive amounts of working capital ourselves, we’re unlocking capital from farmers themselves.
By offering farmers a simple, convenient way to save their own money, myAgro’s model is helping farmers break the cycle of poverty for their families and enter the cycle of investment and growth.
Meanwhile, Setou has transformed her life – all with the power of her own savings and farming. In 2014, she signed up to try saving for a ¼ hectare package to plant peanuts. Each year, as she harvested more, she reinvested her money in building her assets – buying 8 cows to rent to her neighbors for additional income. Last year she planted her entire 1-hectare peanut farm with myAgro and proudly moved her family from their 1 bedroom house to a larger home–all built with her farm profits. The next generation is now benefiting from Setou’s smart farm investments.
If we can get this model to scale, it will be transformational. To date, we’ve reached 115,000 farmers and now our audacious goal is to reach 1 million farmers in the next 5 years. I believe we can harness the power of farmers’ own money to break the cycle of poverty and hunger in West Africa.
Now is the time for a savings-led approach to ending poverty for farmers – the biggest group of poor people in the world.
