On 3rd March 2021, 2SCALE hosted a virtual session at the Sankalp Conference titled, “Financial Inclusion Tools to Catalyze Investments in Agriculture Value Chains.” Given how Covid-19 adversely affected the agricultural sector, this session was designed to highlight how digital financial tools can help in making agribusinesses more attractive to investors and in increasing transparency and trust in transactions between the value-chain actors. The session featured three key segments:
1. Overview of 2SCALE – Delivered by Henk Van Duijn, 2SCALE Program Director.
2. Overview of how 2SCALE is furthering Digital Innovation and Financial Inclusion in Agriculture – Delivered by Samwel Tobiko (Digital Innovations Officer, 2SCALE) and Salome Ngángá (Financial Inclusion Officer, 2SCALE). Given the disruption wrought on the agricultural sector, it is essential we explore the use of tech and how to give farmers access to financial tools in a depressed economy.
3. Fireside Chat on the topic “Coping with Covid-19 Pandemic: An Agribusiness Perspective.” This segment featured Pearson Njeru, the CEO of Pamoja Digital, Elizabeth Gikebe, CEO of Mhogo Foods and the 2SCALE Program Director, Henk van Duijn. Here are some key takeaways from the session:
Financial Inclusion as a tool to grow MSME’s
– Henk Van Duijn
At the onset of the pandemic, 2SCALE organized some of the MSME’s we are working with in Kenya, Nigeria and Mali to pilot a crowdfunding challenge. This was a strategy devised to help the entrepreneurs withstand the financial challenges that were brought about by the pandemic. The challenge helped entrepreneurs raise 92,000 Euros from their networks and the public, with 2SCALE offering additional matching funds. Given the success of the prototype, there is a plan to do a second phase of crowdfunding this year. Crowdfunding is an effective, yet underused tool to raise capital for businesses and the hope is that this can be mainstreamed to help agribusinesses meet their capital needs.
Building the Resilience of Agri-Entrepreneurs
“As entrepreneurs, we should learn to be ready for change. There is a need for foresight to plan for multiple scenarios and how potentially we can respond.” – Elizabeth Gikebe
The aftershocks of the Covid-19 pandemic wreaked a lot of havoc on entrepreneurs, with the disrupted access to markets and supply challenges forcing businesses to downsize or shut down completely. For Esther, she had to adjust Mhogo Foods’ distribution model (given most of the cassava she uses are sourced from Western Kenya and the factory is in Central Kenya) and also integrate a lot of tech to enhance processes so as to ensure continuity of the business, even in a drastically different business environment.
Importance of Entrepreneurs Integrating Technology in their Operations
“Tech is critical to business success and in this era. There is a need for MSMEs to invest in tech to help cope with adversity/uncertainty.” – Pearson Njeru
Businesses, either dealing in products and/or offering service were equally affected by Covid-19. However, there is a silver lining that can be explored and that is the integration of technology to enhance business operations. Pamoja Digital credit officers could not go to the ground to physically meet farmers due to the government-mandated lockdowns. This prompted Pamoja Digital to explore the use of digital modules to engage farmers and initiate the use of SMS and Whatsapp groups to engage farmers so as to provide access to working capital.
You can watch a full recording of the 2SCALE Sankalp Session here to learn more about how we are championing financial inclusion in agricultural value chains in Africa.