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Phase: Improve

Croople small holders futures

Croople allows small-holders farmers, in Kenya, to sell crops in advance to wholesale buyers and access finance easily at their fingertips.

Photo of Maurizio Bricola
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EXPLAIN YOUR IDEA

Croople User Experience Map Croople User Experience Map
This is how farmers have received their first loan's installment after submitting the loan application form. With that voucher code they went to the input shop and collected the necessary farming inputs to get started based on the information, if you look at Joseph's voucher he has got a different amount. This is how farmers have received their first loan's installment after submitting the loan application form. With that voucher code they went to the input shop and collected the necessary farming inputs to get started based on the information, if you look at Joseph's voucher he has got a different amount.
The core of the idea is the Production Plan application. That enables Croople to know who is farming what, when, where and how, with that information we can provide several services to different customer segments. We can for example advise a farmer to change crop, because we know that in her area there are already so many # farmers planting the same, and suggest a couple of alternatives to the farmer based on past trends and current planting data (something like: "hey there are only 7 farmers planting tree tomatoes in your area, last year tree tomatoes were sold at average of 333Ksh per 100kg"). This contributes to diversification and avoids that food gets wasted because of too much offer, it has happened that in order to keep price from dropping due to much offer, commodities have been destroyed or perished in warehouses. Or we can advise farmers to choose a crop based on their soil composition. We can aggregate that information per location (and its climate exposure), farmers financial performances, crop, quality and certification and compile futures contracts with different level of financial risk. This contracts can be sold to food retailers, food processors, large restaurants locally and globally but also to group of buyers like neighbourhood, small restaurants in same city, a municipality, schools, etc. With the revenues from the contracts we can finance small holders activity and keep the chain going.

WHO BENEFITS?

Anne Mbaru 30 years old farmer Anne Mbaru 30 years old farmer
Small-holders farmers and their families, groups of buyers like a neighbourhood, a company, a municipality, etc

WHERE WILL YOUR IDEA BE IMPLEMENTED?

Kenya, around Mount Kenya for now and Nairobi together with the local organization Help Self Help Center (HSHC)

ARE YOU IMPLEMENTING IN AN ELIGIBLE COUNTRY?

  • Yes

EXPERTISE IN SECTOR

  • I’ve worked in a sector related to my idea for over a year

EXPERIENCE IN IMPLEMENTATION COUNTRY(IES)

  • Yes, for more than one year.

TELL US MORE ABOUT YOU!

Help Self Help Centre is a well established local NGO supporting small-holders farmers around Mt Kenya. HSHC also produces bio fertilizer and chemicals. HSHC works in close collaboration with a local company that processes strawberries and tree-tomatoes and is currently supplying a supermarket.

IS THIS IDEA NEW FOR YOU OR YOUR ORGANIZATION?

Yes, this is partly a new idea. We are trying to combine different services. At the moment we are giving loans to farmers through a registered SACCO. The loan system we are currently using is manual and based on members' savings. A member of the SACCO can access a loan if she has been able to save a certain amount for six months, than she can borrow up to 3 times that amount for a year long. With Croople we are trying to give short terms and low rates loans to small-holders farmers. Loans are given in instalments and partly in-kind using vouchers that farmers can exchange for inputs at the nearest inputs store. We have introduced a loan application form that is capturing detailed production information along demographic information about the farmers. In order to receive further instalments farmers needs to update their production plan. We are now collecting the first update on the status of farmers' activities . This allow us to have precise data, cross check with the previous information and hear feedback from farmers in order to advise them at best.

HOW IS YOUR IDEA UNIQUE?

We feel we focus on the whole farmer production chain while others are either providing loans, providing technical assistance, market information, or access to market. Of critical importance for us is the regular collection of up to date and detailed production information from the farmers. No other applications are doing this at the moment. Because of that we are able to talk back to the farmers. Advise them based on their location, soil composition, markets trends and season what to plant best. If appropriate we remind the farmer to spray for example, we enable her to consult a data base of pest and disease control relevant to her crop and location, guide her through agroecological or normal production techniques. On the other side we are not trading stocks we are giving access to futures trading to small holders. We will use the detailed production information to compile aggregated futures contract that will be offered on our bidding system for sale to retailers, food processors, chemical companies, etc. We do not sell stock of an individual farmer, but an aggregated contract which is more attractive to buy for large buyers without having to browse 1000s of farmers profiles

WHO WILL IMPLEMENT THIS IDEA?

The idea will be implemented by Help Self Help Center and Croople. Help Self Help Center is managing a SACCO and a food processing company as well as other initiatives with farmers, they will be responsible of the field implementation. Croople is providing the technology and strategic implementation advice as well as part of the financial contribution in cash for providing farmers with the first loans.

HOW HAS YOUR IDEA CHANGED BECAUSE OF BENEFICIARY FEEDBACK?

We have done already our first iteration when collecting our loan applications. We were not sure how likely farmers would have accepted to receive part of the loan in kind and 95% of them did so we are going to give it a try. The amount of errors and issues in filling up the forms and send them to our server was minimal, that was very encouraging considering our prototypes is in English at the moment. As well we realised we needed to adjust the form slightly to the type of crop selected, some crops have seeds others have seedlings, and introduce seedling rate as well. UPDATE 21/06 We went to the field to check how our farmers are doing after having received their first loan's installment. Please check some of the picture to see the graphs. 100% of farmers have used their vouchers. 40% of them has indicated they won't need any more inputs. We asked them about their challenges during the past 2 months, 60% suffered from rain shortage, 40% from pest. We asked them what advice they need, 40% water storage, 20% pest control, 20% irrigation pipes, 20% market access We asked them what can we improve, 60% said to increase the loan's amount.

WHAT ARE SOME OF YOUR UNANSWERED QUESTIONS ABOUT THIS IDEA?

Will shop owners accept to use our virtual currency? (updated 20/6 Yes they did!) Will be inputs supplier/producer companies partner in supporting the usage of the virtual currency? Will farmers be able to regularly submit detailed plans that correspond to the actual field reality? (updated 20/6 They are currently doing that with support of an extension officer) Will buyers (retailers, etc.) pay at least part of the contract in advance? Will retailers like the idea of the consumers' subscription and implement it? Will consumers purchase the subscription?

WHY DO YOU THINK THE PROBLEM YOUR IDEA SOLVES FOR HASN'T BEEN SOLVED YET?

We feel that many organizations and institutions are failing to collect and make sense of production information in order to advise farmers properly and mitigate excess in production and achieve food security. We feel that financial services that target small-holders face the bottle neck of limited capital to scale, while farmers have to pay high interest rates. With Croople we want to answer to those challenges and create a circular economy system based on pre-paid production. Buyers pays upfront (o a part of) for the produce. With those money we finance farmers operations. Buyers will get quality produce at the end of season, farmers will receive a balance payment at produce delivery.

WHAT WOULD YOU ULTIMATELY LIKE TO ACHIEVE WITH THIS IDEA? WHAT IS YOUR NEXT STEP TO GET THERE?

We want to minimize food waste advising farmers want to plant best in the current season based on their location, real time production information and demand and guide them through the entire crop cycle. As well with giving financial resources to farmers they will be able to afford reliable transport and minimize food spoilage during transportation. Next step will be to move from a prototype to an MVP with the support of Amplify and partners with wholesalers to issue our contracts.

MEMBERS OF MY TEAM HAVE BEEN WORKING TOGETHER FOR:

  • Between 6 months and a year
  • More than a year

MY INTENDED BENEFICIARIES ARE:

  • Within 50 km of where our team does most of its work

MY ORGANIZATION'S OPERATING BUDGET FOR 2015 WAS:

  • Under $100,000

Mobile application (also working on USSD for simple phones) that addresses 3 main issues:

  • Access to financial resources
  • Connection to Markets
  • Access to relevant and actionable information


How?

We give small holders farmers loans through a SACCO. Farmers apply for the loan filling up our production plan. Once the production plan is submitted for the first time, the farmer will get to know how much money she is entitle to borrow. 

Farmers can choose to receive the entire loan in cash at 14% interest or they can opt for receiving part of the loan in virtual currency that can be exchanged at local store(s) for inputs (seed, chemicals, fertiliser) and basic commodities like cooking oil, salt, sugar, etc. at a lower rate of 12%

The loans are disbursed in installments, following the crop cycle. In order to receive the installments the farmer needs to submit regular updates to the submitted production plan and unlock the funds, which are sent using mobile money and SMS in case of the virtual currency. 

Loans have a duration of 3 to 6 months.

On the other side we have established connections with food retailers and processors (We are currently supplying one of the 3 biggest supermarket chain in Nairobi). We know we need to deliver xxxx amount of certain crops to that company every year.The production plans submitted by the farmers that applied to our financial services give us a pretty clear indication about what we need to deliver. 

We are now running a prototyping and testing phase to design our plans together with farmers and specifically for each of the crops (chains) we have already ensured markets for like strawberries, tree-tomatoes, passion fruit and red onions with the recent collaboration with Markit of Ashley King Birschof.

We are currently speaking with a retailer and try to convince them to experiment with a consumer membership subscription to fresh food. The idea is that with the monthly or yearly subscriptions the supermarket will spread the risk with its customers and be more willing to pay in advance our contracts meaning finance for our farmers.





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Attachments (4)

Croople_Loan_Application_v2_results.xlsx

data collected during prototyping and field test phase using the ODK form

Croople-production-plan.xlsx

excel version of the form in case you are not able to install ODK and play the XML form attached

croople-farmers -loan-final.xlsx

List of small-holders farmers that have been selected to prototype Croople during the expert feedback phase. We will sponsor them with 3000 euro to test if our concept is working and how we can improve it ans scale.

Croople Beneficiary User Experience Map-FINALV2.pdf

Croople User Experience Map

Inspired by (1)

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Photo of Chioma Ume
Team

Hi Maurizio,

Can you show us a sample of Croople's Production Plan? We're curious to see how the Production Plan is designed and how it will directly help small-holder farmers reduce food waste. Thanks!

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Photo of Maurizio Bricola
Team

Hi Chioma Ume thanks a lot for your question and thanks to the expert panel for their consideration.
Please find attached a copy of the production plan. You will see one excel file where you can see the questions we ask to the farmers if you are not able to install ODK on a smartphone and play the XML form attached, that would be the best experience. Also we have attached a dump of the data we collected in our field test so far so expert can see also the information we are collecting.
We really welcome expert feedback so we can improve our plan, data aggregation and analysis, and strategy.

At the moment we have only one plan for all crops because we are in the prototyping phase. We are using ODK together  with SMS and some Wizard of Oz techniques to mimic the interactivity of our application. We also have a demo available at www.creator.toys/croople if you play the demo you can see how the application is "talking back" to the farmer when entering data. Demo is far from being finished we welcome support :)

Now let me explain how Croople will directly help small-holder farmers reduce food waste.
Croople has the ambition to be the first future market for small-holder farmers.
We want to make a clear case:

why farmers have to bear the entire risk while we consumers (= all the rest of people) get major benefit (= feed our bellies)?

what if farmers could stand and say:
"wait a minute.. I am not gonna plant anything this year unless people commit to it."

That would make people understand how essential is to invest in their own food and finance farmers operations.

Like most other services are, we pay many services monthly, other we pay and then after some days we get it deliver, etc.. well we have to start to think about our food in the same way and in that way we could gain more control on quality and on what we need and want to eat.

With Croople farmers will sell their crops before they are harvested, that means there won't be waste of food because has not been sold.

More than that with the interactive production plan we will advise small-holders per regions.
As we illustrate in our User Experience Map, when a farmer starts with the production plan entering the crop she wants to plant (and get financed for) Croople will advise her based on her location, past trends and demand what is best to plant at that moment.

If the previous day Croople gets 300 plans for passion fruit or in Croople DB we have already got thousands of passion fruit plans in the last month but hardly 100 tree-tomatoes plans, Croople will advise the farmer to plant tree-tomatoes instead since way less farmers are planting that in that area. That prevents excess in production, price drops and most important prevents that food gets wasted because of being destroyed to raise prices up or not being sold because nobody wants to buy it even if cheap since they got enough of it already.
As well it contributes to food security in the area where it is used and ensures diversity in production and rotation among farmers.

Please let us know if the form was clear otherwise we will record a video where we play and explain the form step by step.

Looking forward to hearing from you soon!
Cheers,
The Croople Team

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Photo of Maurizio Bricola
Team

Hi Chioma Ume just realised I cannot attach XML file, please find the link to the file here: https://goo.gl/0DpJeG
Cheers,
Maurizio

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Photo of Chioma Ume
Team

Hi Maurizo,

Thanks for sharing this. I have a few more questions. Is HSHC already devoting staff time to this new idea? 

Could you share more about how you obtained beneficiary feedback? It looks as though you might have had farmers fill in loan applications? If so, how did you find them? Did they have to commit anything? What gives you confidence that they perceive this as filling one of their needs? Will the effort of putting data into the system feel worth it for farmers?

Why is this the best route to financing and information relative to what's already available?

Finally, what do you anticipate to be the key challenges with implementing this idea?

Looking forward to learning more! 

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Photo of Maurizio Bricola
Team

Hi Chioma Ume thanks a lot for these great questions!

Is HSHC already devoting staff time to this new idea?

Yes HSHC is already devoting staff time to the idea, Peter is HSHC ICT officer, he is the one that has been going up and down in the field talking with farmers, introducing farmers to the concept, gather feedback on the voucher system and tested our forms (the one we shared is the improve one after the first field testing during the feedback phase. A part for the ICT officer, HSHC is also dedicating the time of a loan officer who is responsible of qualifying the loans applications and administer the loans and Bernard (HSHC director) who is currently liaising with potential partners like Uchumi, Nakumat and the likes.

Could you share more about how you obtained beneficiary feedback?

As mentioned we went to the field with the first version of our form. On the based on the interaction and responses we have adjusted the form, validated the desirability of vouchers for buying inputs. After that we went to the field a second time with the new improved form. In our second test we realised that we should capture more detailed information about what type of inputs farmers will need, that will allow us to aggregate that info and bulk buying the inputs for the farmers in order to implement the voucher system. We plan to  assist farmers in identifying what and how much inputs they need based on the information they will enter into the system.

It looks as though you might have had farmers fill in loan applications?

Yes farmers did fill up a loan application with a production plan embedded. We have a database of 40000 farmers phone numbers and we communicate actively with 4000 of them at the moment.
Peter the ICT Officer went to the field, in a selected area for the test and tested the form with 25 farmers.

If so, how did you find them? Did they have to commit anything?

Farmers applying for the loan committed to pay back the loan at the end of the crop cycle at 12% or 14% interest rate depending on their choice (voucher-cash loan or full cash loan). As well farmers have the options to sell their production plan with us, if they do so they will commit to deliver their produce to our collection point.

What gives you confidence that they perceive this as filling one of their needs?

All farmers we have interacted with so far were very happy about the initiative since it gives them access to short term and low interest loans, as well to information services and access to market in case they decide to sell with us. Is not easy to small-holders to access loans. As well we have received more applications than expected, and farmers are asking us to enlarge our users base for the pilot. As well some of the farmers who submitted the loan application for a crop we are not yet supporting were very happy to shift from crop to be eligible for the loan.

Will the effort of putting data into the system feel worth it for farmers?  (we love this question!)

Croople is meant to be a full interactive application, what we share so far is a rough prototype, our form will "talk back" to farmers as soon as they start inputting information on the form. 
This is what we think we are doing differently form every other application so far, which indeed are simply asking information to farmers.

if you see the demo at www.creators.toys/croople you can see that as soon as you chose a crop the application is giving you back the market price of the crop chosen. As well if you go further and choose "plant x crop" you will see that the application tells you immediately when the planting season is going to start (based on your location), those are just simple examples of what we can do. 
As mentioned in our experience map, we will also talk back to the farmer and advise them instantly about what to plant, so for example if farmers enters "soya beans" we give back to the farmer the following: "there are already 300 farmers producing soya beans in your area for a total of 3000 t  and only 50 planting strawberries, why don't you plant strawberries instead?
This is to say that we do not simply ask the effort to farmers to give us the info, as soon as they share their info with us we give them advice accordingly.
Aas well if you were able to use the XML form we shared, you can see how entering the information in the form helps farmers to think about their enterprise, labour costs, inputs cost, expected yields and expected profit. With the time farmers (and us) will be able to see which crop(s) are benefiting most of.
Last but not least, in order to keep receiving the installments of their loans, farmers will have to keep the information submitted up to date during the whole crop cycle , failing to update the plan will mean the loan will be put in standby. 

I am running out of characters so I will continue in another comment :) Cheers

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Photo of Maurizio Bricola
Team

Hi Chioma Ume  please find here below  the answers to the others 2 questions.

Why is this the best route to financing and information relative to what's already available?

Because we can scale. We match demand with aggregated production information instead of individual farmers with buyers. As well we do not trade stocks but futures. That gives enough time to organise production and delivery and takes the worries away from the farmers to have to find a market at the end of the crop cycle to pay back their loans and hopefully earn enough money for their livelihoods. If food processors, wholesalers, and ultimately consumers will invest in their own food, buying 50% (or even 30%) upfront, we will have enough money for financing all the farmers needed to produce that food.
As well we want to make a clear ethical case: why farmers needs to bear all the risk of food production? This feels to us a very irresponsible behaviour from all actors in the chain.
Linking the advisory services with a loan application and production plan will ensure us to provide tailored and targeted advice to individual farmers and farmers will most likely follow that advice since that will lead them to a successful harvest and the possibility to qualify for a new loan again.
As far as we see all others solutions currently available aren't aggregating the small-holders production, neither are gathering detailed information about their production plans and giving back business intelligence to the farmers.

What do you anticipate to be the key challenges with implementing this idea?

We will probably face several challenges since we are aware we have an ambitious plan. The major ones we anticipate are:

Will we be able to convince wholesalers and food processors to buy farmers produce before it is actually harvested (and in some cases even planted) ?
Will we be able together with wholesalers to introduce fresh food subscriptions to consumers with the aim of making consumers aware of their responsibilities and as well making them feel good about supporting small-holders and hence get health and quality produce directly from them through the supermarket of their choices?
How much the weather conditions will affect small-holders production and what can we do to mitigate that impact and ensure delivery to buyers?
How much fluctuations in prices will affect our trading power versus buyers and small-holders?

Once again thanks so much for your questions, we welcome your feedback and of course we hope to answer to the above challenges during the next months with the help of Amplify support.
Please do not hesitate to ask any further clarification.

Warm regards,
Maurizio

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Photo of Chioma Ume
Team

Many thanks Maurizio Bricola for this detailed response! 

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Photo of Maurizio Bricola
Team

Most welcome Chioma Ume feel free to ask further clarification if needed these questions keep us sharp and thinking and help us to improve our concept.
Cheers

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Photo of Maurizio Bricola
Team

Hi Chioma Ume  and Shane Zhao  we are going to the field again and pushing a new form to farmers to get an update on the status of their enterprises. 
Is there any question you or your experts panel would like to ask our farmers directly? we can then added to the form. We will go to the field tomorrow, so please let us know!
Cheers,
Maurizio

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Photo of Chioma Ume
Team

Hi Maurizio! Sorry for the delay! We look forward to reading what the team learns – I'm sure that you guys asked meaningful questions – hope the trip went well! 

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Photo of Chioma Ume
Team

Hi Maurizio! Sorry for the delay! We look forward to reading what the team learns – I'm sure that you guys asked meaningful questions – hope the trip went well! 

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Photo of Maurizio Bricola
Team

Hi Chioma Ume we have shared the feedback we got from some of the farmers in our last update. Tomorrow we will have all the updates, if there will be any new insight I will post it here as reply to this comment.
Thanks a lot for engaging with us so far and all the best with the difficult task to choose the winners among so many valuable contributions.
Cheers,
Maurizio

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Photo of Chioma Ume
Team

Sounds good Maurizio, thanks for the update and for your team's hard work! 

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