OpenIDEO is an open innovation platform. Join our global community to solve big challenges for social good. Sign Up / Login or Learn more

Markit Opportunity - Mobile Auction for Smallholder Farming Trading

Markit Opportunity connects smallholder farmers to new and existing markets in East Africa through a trusted and transparent mobile platform

Photo of Ashley King-Bischof
33 33

Written by

EXPLAIN YOUR IDEA

Markit Opportunity is an award-winning social enterprise that connects smallholder farmers to new and existing markets with more reliability and transparency than the current system. Using accessible, basic mobile phone interactions with farmers, Markit Opportunity collects aggregate, real-time supply data to optimize and facilitate trading across East Africa. | Registration | Markit Opportunity (MO) Agents introduce farmers to the service in organized groups. Agents make a one-time trip to each farm to verify and record farmer IDs, location and size of farm in our Android Agent App. | Mobile Auction | Many Farmers send an SMS with their "ask" (when ready to harvest or sell) Many Traders send an SMS with their "bid" (when ready to buy) We match a trader's bid with one or multiple farmers' asks | On-Farm Trading | One MO Agent is sent to a matched farmer the day of trading. With a digital scale they weigh the farmer's final crops and record details into our Agent App. The Agent App has a digital signature feature for the farmer and trader to agree on the weight and details of the trade. This triggers payment to the farmer. We charge a transaction fee to the trader for matching them with farmer(s) and facilitating the trade. | Transportation | Both of our target customers do not own vehicles. Traders rent vehicles to pick up crops. For traders who want to stay at their stall, we arrange transport with trusted SMEs and send our agent with the vehicle.

WHO BENEFITS?

300 smallholder farmers, wholesale traders and urban consumers in Kenya benefit the most from our platform. Farmers get the best prices for the produce, fast access to an expanded marketplace and transparency in their trading. Traders get high value produce to sell and an expanded, accessible marketplace. Consumers get high quality produce from farms. Everyone benefits from the increased efficiency. By matching users in real-time, quickening time to market, food waste is also reduced.

WHERE WILL YOUR IDEA BE IMPLEMENTED?

Kenya, Tanzania, Uganda and Rwanda. We are currently operating in Nyeri County, Kenya, and will expand to the rest of the East African Community by 2020. Tanzania is our first expansion in 2017. Uganda and Rwanda will have our offer by 2020.

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!

Markit Opportunity is a registered for-profit social enterprise in Kenya that partners with NGOs and businesses to offer life improving provide services to farmers. Our growing team is looking for innovators for our team. If you are interested, contact us at jobs@markitopportunity.com.

IS THIS IDEA NEW FOR YOU OR YOUR ORGANIZATION?

Markit Opportunity and our SMS auction platform are not new. In fact, we tested the first version of our platform in a pilot this February and March. We had great success. As of March 31st, we had traded with dozens of farmers, earned impressive early-stage revenue, had repeat traders buy onions from the platform, and steadily supplied a supermarket in Nairobi. What will be new for 2017 is a two-fold evolution of our platform: 1) Instead of just handling trade facilitation at the farm, we also want to organize trades from the farm to the wholesale trader's stall/warehouse/supermarket. This will include signing up and organizing transport SMEs (something we have already done successfully and profitably at a small scale). 2) Offer NGOs a unique service to give their smallholder farmers access to our platform. Instead of managing the entire relationship, we will leverage the trust that NGOs have with their farmer beneficiaries. NGO field officers can also reduce our agent costs by facilitating registration and some of trading. We have already co-written a grant with an established NGO to launch this idea to 3,000 smallholder farmers next year. Our future is very bright.

HOW IS YOUR IDEA UNIQUE?

Our platform is unique, not because we invented a new technology. In fact, we're using some pretty old market ideas. Our platform is unique because we make sophisticated trading seem basic to users (our backend algorithm is complex) and we make sure trading is transparent (we use neutral Agents and smart contracts). Very few platforms do both of these things well, let alone together. We learned from failed AgTech platforms and our HCD practices early on. The market has asked for: (1) lean, easy-to-use feature phone interactions with farmers (not an app or website) (2) trusted relationships (verified users and *some* high touch interactions) (3) product quality discrimination (traders often order based on grade, size, and seed) We have a unique advantage to implement this idea because we are three people who understand: 1) BoP agricultural trading 2) the lean startup methodology and cross-border business 3) how to build mobile technology The other advantage we have is our advisory board. While they live and work all over the world, they come with knowledge in every aspect of our market and organization.

WHO WILL IMPLEMENT THIS IDEA?

Markit Opportunity has a full-time team dedicated to this idea. Our Founder and CEO, Ashley holds an MBA from IE Business School and a BA from Brown University. She leads this team in the field and in Nairobi. Our Community Manager and former onion trader, Winnie, manages agents and farmers. Our CTO, Gerónimo, with 8 years of programming experience, architects and codes our iterations. We hired two agents to register farmers and facilitate trades in the next harvest season (July and August).

HOW HAS YOUR IDEA CHANGED BECAUSE OF BENEFICIARY FEEDBACK?

*Please watch the video above (most of the narrative has corresponding text and/or pictures)* We interviewed a dozen farmers who registered with us last year but didn't send an SMS when they harvested this past season. Our assumption was that they had a hard time remembering the SMS "code" we asked them to use. However, most gave two reasons: 1) their phone didn't work (buttons broken or it was dead) 2) they thought we were looking for a different type of seed (we sent a few SMSs asking for seed types) We can easily change our marketing strategy to make sure our farmers know they should always send an SMS. Additionally, instead of a new UI, we can temporarily have a local office for farmers to access. Later on we can build a code that will let farmers use their friend's phone. The latter will take more programming time, but the former is cheap and easy to iterate on. When we asked for open feedback, farmers said they wanted someone to help trade on their behalf. We suggested a Markit Opportunity agent to be present, with an app that tells HQ in real-time about the trade outcomes. Farmers liked the prototype and are looking forward to the new trade facilitation setup.

WHAT ARE SOME OF YOUR UNANSWERED QUESTIONS ABOUT THIS IDEA?

So many to choose from! (We are a curious bunch): 1) Is it possible to create an authentication process that allows farmers to use someone else's phone? (Can we verify a farmer is who they say they are, digitally, without their phone?) 2) How quickly, if ever, can we move away from the agent model to one where farmers and traders are able to equally manage their trades? Can we build a system where it's attractive to follow the rules? 3) Why won't some farmers who express interest register with us? (Is it lack of trust or our product offering?) 5) Can we effectively leverage NGO field officers to efficiently improve registration and transparent trading amongst farmers?

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

Smallholder farmers have the least amount of resources in the agricultural supply chain. Even when they do gain access to resources, it is often much later and much less than others. The seasonality of farming also creates price volatility and risk. Traders have leveraged this information and resource asymmetry to create profitable businesses. Even with just a small amount of working capital, anyone can build a small business of buying and selling crops. Additionally, smallholder farmers are very risk averse. A bad trade can cost them their next meal. When smallholder famers lack resources and cannot assess their risk, they cannot compete in these supply chains.

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

The long-term vision for Markit Opportunity is to be the ubiquitous trading platform for smallholder farmers in Africa. We will go from replacing the broker with agents to also offering delivery of crops to traders. For that, we must: (1) build trusted relationships with all users (2) develop an accessible mobile platform that organizes farmers, traders and drivers with vehicles (3) create partnerships with NGOs, SMEs and banks to offer working capital and resources to support this model

MEMBERS OF MY TEAM HAVE BEEN WORKING TOGETHER FOR:

  • 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

BACKGROUND

Markit Opportunity is an award-winning for-profit, social enterprise with the mission to improve the lives of smallholder famers in the East African Community by leveraging mobile technology and logistics innovation to create trusted, transparent and coordinated supply chains.

We offer a full-service trading platform, accessible via feature phones, that ensures high quality produce is sold in real-time into markets that pay the highest prices for the farmer crops. Markit Opportunity facilitates the entire trading process to ensure real outcomes

Markit Opportunity is the winner of the 2015 Barclays Africa Supply Chain Challenge (with over 200 other startups competing across Africa). 

October 2015 saw the first version of our platform. We chose one crop to focus our understanding - red onions. In the future, we aim to trade all crops in East Africa. As of March 31st, we have traded with dozens of farmers, earned impressive early-stage revenue, had repeat traders buy onions from the platform, and are steadily supplying a supermarket in Nairobi.

The next phase of our platform will take place in August and September of 2016 (the second harvesting season of the year).  

PLEASE VOTE HERE | We seek your collaboration on our next feature

We hope to improve our platform with the OpenIDEO community by receiving feedback on our suggested features below. 

MarkitOpportunity.com

Blog.MarkitOpportunity.com

Markit Opportunity Limited is a registered corporation in Kenya, CPR/2015/212791.

[APRIL 28 update]

FEATURE 2 - Agent App - is the most voted for feature! As the norm is to work with brokers during trading, and most farmers and traders seek trusted brokers, incorporating an Agent model into our platform will allow us to bring in logistics technology through a select group of trusted Markit Opportunity agents. 

[MAY 1 update]

Our farmers have asked us to provide a better user experience. We believe that having a face-to-face interaction during the trading process will allow our farmers to feel they are getting a fair and protected trading experience. That does not mean we won't use technology. The Agent App will be an Android app that (1) collects farmer registrations data, (2) holds current pricing information for farmers to access and (3) syncs with our back-end web service to know the trade details of their assigned farmers and traders. See a mockup of (3) below in the product ideas. We will work on (1) and (2) with farmers.

View more

Team (7)

Dave's profile
Dave Zinsman

Role added on team:

"Dave has helped create our product vision from early 2015."

Ashley's profile
Cezarina's profile
Cezarina Niculae

Role added on team:

"Cez bleeds sustainability."

Elizabeth's profile
Elizabeth Kimball

Role added on team:

"Elizabeth consults early-stage social enterprises in developing countries."

Cristóbal's profile
Cristóbal Cuenca Almenar

Role added on team:

"Have some good data? Cristóbal knows just what to do with it."

Derrick's profile
Derrick Rono

Role added on team:

"Mobile/Backend/Awesome Software Developer in Kenya. Blockchain expert, as well!"

Geronimo's profile
Geronimo Di Pierro

Role added on team:

"You've got feedback? Geró has a response - "I'll build it." He's making our prototypes and real software needs come to life."

33 comments

Join the conversation:

Comment
Spam
Photo of Chioma Ume
Team

Hi Ashley!

Below are some feedback from the Amplify team and our experts. We're looking forward to reading your responses!

-It'd be helpful to share more details and examples that a full cycle of the solution.

- You pointed to the lack of transport and other infrastructure that currently limits the ability of small- holder farmers to get to market with a high-quality product. It seems that your solution is focused on providing information access. How will you address the lack of transportation, warehousing, processing, etc?

-Can you tell us a bit more about how your team will support and reduce the and cost of having field agents?

Spam
Photo of Ashley King-Bischof
Team

Hi Chioma!

Great to hear from you and the team. We will jump on answering these questions from the experts soon. 

Thanks!

Ashley

Spam
Photo of Chioma Ume
Team

Sounds great Ashley, thank you!

Spam
Photo of Ashley King-Bischof
Team

Hi Chioma, 

Thanks again for the feedback. We have looked at these areas in-depth over the past few months and believe there is a sustainable approach to this problem! 

(1) For more details about our product cycle, please see the video and edited description above. 

(2) Transportation is a key concern in providing opportunities for income improvement to smallholder farmers. Anyone who can buy or rent a truck to conduct deliveries are usually wealthy and can have a lot of power in the agricultural supply chain. That said, one also needs trusted relationships and real-time market information to execute profitable trades (due to risk of spoilage and price volatility). 

One of our target customers, the wholesale trader, usually does not own a vehicle (instead they focus on procurement and selling). Currently, when we deliver to a trader who does not have transport, we organize the transport by calling a trusted SME or an owner of transport vehicles to conduct the delivery. Our agent then accompanies that vehicle to our users' destination. For example, when we deliver to our supermarket the process looks like this: supermarket employee sends an SMS with the quantity they want. We take the market price at the farms, add our fees, add the known transportation fee and quote the supermarket with that total price. When they accept, we start the trading process by informing and organizing the farmer, agent and transporter through our platform. The supermarket then pays on arrival. We believe the future of our platform will be to organize these types of logistics on behalf of wholesaler traders, replacing the middleman. We also know that these organized trades at scale are viable -- as we have executed profitable trades this way, even at our small scale. 

Our buyers provide warehousing for themselves. We offer a first-step in processing by sorting and grading. Trading is our core competency, but we know the value to farmers is being able to add value to their commodities. We are already exploring partnership opportunities to organizations that would like to offer these services to farmers to improve their offerings before they sell.

Just to clarify, we do not *just* offer information access to farmers, we offer market opportunities. By facilitating trades and organizing logistics better than a small business can, we improve efficiency in trades to earn farmers more income. 

(3) The current trading practices have a farmer, a broker and a wholesale trader. We see wholesale traders use brokers (when they can own/rent a truck). That broker is used in the vast majority of trades with farmers. The broker is limited in their knowledge of real-time supply outside of their locale, which makes them useful only in a certain area. That broker, makes money in two ways:

a) they charge traders a standard facilitation fee 
b) (sometimes) they quote farmers a lower price than the market price. If the trader is willing to pay the market price, the broker earns the difference. Essentially they take income directly from farmers.

Markit Opportunity and its agents replace the role of the broker. Markit Opportunity uses technology to replace price negotiation through a broker. We have agents to replace facilitation of trading. Because we organize users and price negotiations, we can charge traders a similar fee and have lower costs than a broker. 

Next year, we will go one step further and offer an extension of our service as a plug-and-play platform to NGOs that support large groups of organized smallholder farmers. Agent costs will be reduced in this instance as we will train Field Officers from these NGOs to register farmers and facilitate some aspect of trading. We have already co-authored an EU grant application with an established NGO to offer this evolution of our product to 3,000 smallholder farmers in Central Kenya.  

Hope that helps! We will take any more feedback if you have it. 

Thanks! 

Ashley

Spam
Photo of Chioma Ume
Team

Hi Ashley, this is very helpful, thank you! How many agents do you have working on this right now? 

Spam
Photo of Ashley King-Bischof
Team

Hi Chioma,

We have one Community Manager and two agents who are working with 300 farmers producing around 200,000 kilos of onions. Agents are paid as they work and our Community Manager is a full-time employee. All three are know to the community and have positive reputations. Again, these costs are sustainable at scale.

Thanks,

Ashley

Spam
Photo of Chioma Ume
Team

Good to hear! Thank you.

Spam
Photo of Ashley King-Bischof
Team

Hi Chioma,

One last update for the books:

We just had a partnership finalize. A female-owned, impact-driven distribution company in Kenya has asked us to be a preferred supplier. This is a big milestone for us, given that her technology solution has the potential to integrate with ours. She delivers to hotels, schools, restaurants and individual retail clients. 

Women supporting women, supporting women farmers. 

(Also, the supermarket that buys from us is run by a woman).

All the best with the selections.

Cheers,

Ashley

Spam
Photo of Chioma Ume
Team

Hi Ashley, that's great news! Congratulations! (and thank you :))

Spam
Photo of Bahenda Joseph
Team

Hello Ashley King-Bischof,
You are developing a good concept but I would like to suggest that you include Burundi as an expansion market, as you scale up.

Good luck.

Spam
Photo of Ashley King-Bischof
Team

Hi Joseph, 

We really appreciate your compliment. Burundi is not so far away. Please tell me why you suggest expanding there? Are similar trading problems? How do farmers get treated by brokers and traders? I'm very curious to hear your views. 

Thank you,

Ashley

Spam
Photo of Bahenda Joseph
Team

Hi Ashley King-Bischof,

There is a need of connecting small-scale farmers to the market, and as you may already know, small farm-holders accross the East African Community face the same challenges . Next to that, you are planning to initiate the USSD protocol, which is a good thing because your services will also reach small-scale farmers who do not have smartphones. Another aspect equally important is the fact that you are going to train agents in order to pair them with trade. If you can do that in Kenya, you can also do it in Burundi. These are some of the arguments that incited me to encourage you to go beyond the Kenyan and Tanzanian boundaries and explore what Burundi has to offer.


Do not hesitate to get back to me again should you need any further inforamation on Burundi.


Regards,


Joseph Bahenda

http://www.chicken4all.bi/

Spam
Photo of Ashley King-Bischof
Team

Hi Joseph,

I appreciate your feedback. When we consider expansion into the rest of East Africa, in mid-2017, it will be great to hear more about your thoughts on Burundi.

All the best with Chicken4All!

Thanks,

Ashley

Spam
Photo of Bahenda Joseph
Team

You are welcome!

Spam
Photo of Sifa Enock
Team

Good idea, but I fear that we will not be able to operate this idea in other countries, such as Uganda, Rwanda and Tanzania. Have you did the pilot survey in these area? for example when you will receive the funds which area of Tanzania will you start to implement your project?

Spam
Photo of Ashley King-Bischof
Team

Hi Sifa, what concerns can you share with us about expanding into other countries in the East African Community? We have started to study Tanzania but have only piloted in Kenya. Some ideas in this very challenge are working with farmers in Uganda. Also, our traders buy from farmers here in Kenya and send their goods to Uganda and Rwanda.

While we don't believe everything about the platform will transfer easily, we do want to get as much information as possible to make our expansions successful.

Please do share your thoughts! Thank you. 

Spam
Photo of Chioma Ume
Team

Hi Ashley and team!
I notice you haven't filled in the answers to the new phase questions yet. Friendly reminder to do so before the phase ends next week. Remember that the 'full description' field won't be visible to any of your readers.

Cheers!
Chioma

Spam
Photo of Ashley King-Bischof
Team

Hi Chioma!

Thanks for the reminder. We've been on the farms this week collecting some good feedback. Per usual, connection to internet was limited. That said, we've compiled our feedback in a way that's hopefully easy to follow. Check out our new posted video!

Happy Friday,
Ashley

Spam
Photo of Ozuluonye Shedrack
Team

Hi Ashley, 

 congratulation we both made it to the feedback stage. looking forward implementing our ideas together. your idea will go along way enhancing mine in Nigeria if we use ur mobile platform in creating market for thousands of small scale farmers.   

Spam
Photo of Ashley King-Bischof
Team

Hi Shedrack, Congratulations to you too! Let's start thinking in the millions of smallholder farmers! Interested to see what your feedback brings. Cheers. 

Spam
Photo of James Makumbi
Team

Hello Ashley King-Bischof , This idea is brilliant! And the presentation (post) is awesome too! I would love to hear more about the fulfillment (ask sent no response) part of the idea and where your revenues (only transport?) are from. 

Spam
Photo of Ashley King-Bischof
Team

Hi James Makumbi , thank you for posting. We are trying hard to explain what we do, so we appreciate the feedback on the presentation. 

Our revenues are earned from facilitating trades. Sometimes we finance the onions after the trader is matched. This happens for several reasons 1) the trader is stationary and we deliver to them (so yes, we pay for transportation as well) 2) the trader is a day or two away and needs us to begin harvesting before they arrive, but they are not willing to pay a deposit. We believe in the future we will build a strong enough brand that traders will be willing to deposit with us. 

All of the farmer users know that if they are not matched with a trader within the day, then their ask is no longer valid. We sometimes communicate why they were not matched - either their price is too high or we don't have a market (as of now we are still small enough that we don't always have the market to fulfill their asks). 

Does there seem to be a way we can help Farm Connect?

Spam
Photo of Brian Powell
Team

Hi Ashley,


Markit Opportunity sounds awesome! I’d love to hear more about your platform and how it works. How has the feedback from farmers and buyers been so far? I take it that you platform is working since you have been having repeat customers. That is always a great sign!



How did your presentation at websummit go?



Are you planning to run another crowd funding campaign? If you do, please let me know where to find it.



Can I also ask you to take a look at the comment I posted under my initial post about using peer-to-peer lending to finance smallholder farmers? I would really appreciate your thoughts on my idea for a 17 app smartphone platform.


Thanks,

Brian

Spam
Photo of Ashley King-Bischof
Team

Hey Brian Powell . Thanks for the praise! Yes, it IS working. We looked at many factors that show farmers and traders enjoy our platform and want to continue using it. Farmers believe we have transparent standards that earn them a fair income - even if they are selling at the market price. 

I took a look at your OpenIDEO page. I'm a big fan of peer-to-peer lending. So much so that I was a Kiva Fellow in one of the earlier cohorts. I have a few questions for you:

1) Who is "we"? Are you an organization or an informal group who has great ideas?
2) Why 17 apps? What are each of these apps? Are they feature phone apps (USSD) or are they smartphone apps?
3) Mind describing the other 16 apps?
4) Why not encourage folks to use Kiva? Is there a gap they are missing that you're going to fill?

Looking forward to hearing more! 

Spam
Photo of Brian Powell
Team

Hi Ashley,


Thanks for getting back to me so quickly and for taking a look at my idea! I am going to have to split my response into more then one comment because of the length.



1) So far the “we” includes myself, two sisters, a brother and a brother-in-law that I have convinced to help me out. But I am actively recruiting.
2) Why 17 apps? Because smallholder farmers are by no means a homogeneous group. They are spread across virtually every climate and region of the world and the crops they grow and animals they care for depend on their diverse growing conditions. The structural and political environments they work in are also vastly varied. Our plan is not a cookie cutter solution for every farmer’s problems, but rather a platform that empowers farmers to develop their individual solutions through a combination of 17 apps. Every farmer will most likely not use every app, nor will they use them in the same ways, but our goal is to give every farmer whatever apps they need to develop their individual farm to its full potential.

3) The other apps:

a. Market Information – Based on the work of Start Some Good. (https://startsomegood.com/limalinks) “This project increases the income of over a million Zambian farmers through access to market prices and distribution using mobile technology.”

b. Weather – Local weather information based on the work of Weather Underground. (www.wunderground.com)

c. Alerts – Early warning system based on the work of the World Meteorological Organization as well as crop and animal warnings such as pest and disease outbreaks. (https://www.wmo.int)

d. Buyers – A way to link farmers with buyers to reduce post-harvest losses and increase revenues based on the combined work of several organizations. (www.esoko.com/, www.celac.or.ug/, www.nafis.go.ke/, http://icow.co.ke/, http://www.manobi.net/, http://www.lmistz.net/)

e. Suppliers – A way for farmers to aggregate their orders for bulk pricing and transportation as well as to select the products they want to purchase beyond what the local market offers.

f. Buy/Sell/Trade – Standard local classified ads on-line (craigslist)

g. Banking – A link to locally available mobile banking services and mobile money, based on the work of M-PESA (www.mpesa.in/portal/)

h. Personal Finance – Simple budgeting and planning app for individual use, based on any of the multitude of currently available apps.

i. Investing – A way for small-holder farmers to access the power of compounding interest to grow the revenue from the sale of their produce.

j. Insurance – Crop insurance to mitigate the devastating effects of crop failure, based on the work of the Syngenta Foundation. (syngentafoundation.org)

k. Social Networking – Facebook for the smallholder farmer.

l. Electronic Library – Access to books on-line, translated into the local language, based on the work of the Klintaine Public Library’s “Hand in Hand” project. (http://enrd.ec.europa.eu/)

m. News – A platform for local people to publish stories that are important to them. An internet based local newspaper for each and every small town and local community to give them a voice.

n. Audio/Video Files – A way to reach the illiterate as well as provide visual learning and learning on the go. (Digital Green, Purdue Phone Videos)

o. Reports and Statistics – Detailed information about their sector (Reuters Lite, Esoko, KIT-Uganda, RATIN, E-Choupals)

p. Continuing Education – Everything from personal hygiene and nutrition to literacy and rocket science. (Brainhoney, Moodle, Lingos, Udemy)

Spam
Photo of Brian Powell
Team

4) Why not just use Kiva?



a. Kia is awesome! But it only appeals to lenders who just want to do good because the lenders don’t get any return on their investment.


b. While there are a million reasons why this is the right thing to do, it doesn’t bring in the billions of dollars in capital that platforms like Lending Club, UpStart, Prosper, Peerform, CircleBackLending, SoFi, Pave, Funding Circle, Borrower First and Daric have access to.


c. Also, because Kiva makes the loans through local micro-finance organizations, the end users still pay high interest rates and the overall capacity of the system is limited by the capacity of the microfinance organizations on the ground.


d. While this ensures accountability and high repayments rates it has a few drawbacks:
     i. It limits the reach of the organization. Even if they could access billions of dollars in capital, they wouldn’t be able to economically scale up the delivery end.
    ii. It is also donor reliant, and therefor restricted, on a couple of levels. First, Kiva itself requires donor support to function because it doesn’t generate revenue. Second, many of the micro-finance organizations also require donor support to function or they have to charge very high interest rates to the farmers to support themselves.


e. By coming at this problem from a commercial business point of view, my cost benefit analysis is vastly different from Kiva’s. I am willing to take the risk of much higher losses due to default rates in order to reach more people that the smart phone only approach entails in order to remove the operating costs of traditional face to face microfinance.
     i. I believe I can offer loans at 15% APR (1.8% monthly) and pass ALL of the profits back to the lenders. This will save the borrowers a significant amount over the current microfinance rates of 40-105% APR (2.8-6% monthly).
    ii. The business will be financed by charging the lenders $1 to make a loan. Like an ATM fee.


f. Like I said, Kiva is awesome, but it just doesn’t have mass market appeal the way the commercial P2P platforms do.

Thanks again for your questions and if you are still in contact with any other Kiva fellows or Kiva folks, please pass my comments on to them. I would love to get some critical feedback from people with an interest and experience in the market.


Thanks!

Brian

Spam
Photo of OpenIDEO
Team

Congrats on this being today's Featured Contribution!

Spam
Photo of Ashley King-Bischof
Team

We are delighted to be featured! OpenIDEO 

Spam
Photo of Maurizio Bricola
Team

Hi Ashley King-Bischof thanks for your prompt action! Monday will be nice, will 10:00 am Nairobi time do for you? Bernard Muchiri will you be available? Cheers

Spam
Photo of Ashley King-Bischof
Team

Maurizio Bricola let's make a call happen between our two teams. I am based in Kenya and could do a quick call about our platforms before looping in other members in other timezones. How does today or Monday work? Dave Zinsman FYI.

Spam
Photo of Shane Zhao
Team

Thanks for sharing Markit Opportunity Ashley! What stage of development is your team currently at? What are your key learnings from your launch in Kenya that might inform how Markit will expand in Tanzania? 

Also here's a helpful Tip: to activate links in your post, hit the Edit Contribution button at the top of your post . Scroll down to your Full Description field. Select the text you'd like to link, hit the link icon in the Rich Text Editor at the top of this field and enter your link. That way everyone will be able to check it out easily, straight from your post.

Spam
Photo of Ashley King-Bischof
Team

Hi Shane Zhao ! Great questions. We launched our first pilot in October of 2015, when farmers began planting their seeds. We followed them through harvesting into mid-February. We just finished this 6-month pilot today! We traded over 8,500 kilos of red onions in six weeks. That's approximately 25,000 onions. Our farmers used SMS and voice to sell into the auction. Traders also used both SMS and voice to buy into the auction. We sold direct to supermarkets, export aggregators and local traders. We were able to earn farmers more income and provide quality produce to buyers. Referrals were made on both ends. Our platform, at scale, is financially sustainable.

We learned a lot about wholesale trader behaviors and cultural norms in agriculture supply chains in East Africa. You can read about our Human Centered Design learnings on our blog at blog.markitopportunity.com.

Sample takeaways:

- Trust is THE BIGGEST FACTOR in deciding whether or not to trade. Trading practices come second. Price a close third.
- Both Farmers and Traders need to meet you in-person before trading
- Behavior change takes time (voice to SMS is not changed overnight)
- Farmers can benefit not just from price increases, but from standardized practices that accurately measure the weight they sell.
- Technology is easy to build. Building a trusted brand takes time, effort and constant learning.

Spam
Photo of Dave Zinsman
Team

Loving all the progress your team has made, Ashley King-Bischof  Looking forward to engaging the OpenIDEO community to explore opportunities to improve how the Markit Opportunity platform solves problems!