HadaKoozah

Our solution's mission is to make agriculture a stable source of income for small farmers by facilitating the financing of agriculture as well as the sale of agricultural products

Togo is a West African country with a population of about 8 million people, about half of whom live on less than $1.9 per day, according to the World Bank. Also according to the World Bank, the poverty level is twice as high in rural areas (58.8%) than in urban areas (26.5%). What we need to know here is that rural populations and therefore those who depend on agriculture as their main source of income are the ones who suffer the most. However, the breakdown of Togo's GDP by sector of activity shows that agriculture accounts for about 40% of GDP and the employment sector for about 70% of the active population. From here one would expect the agricultural sector to be well organized and well financed given its importance for the Togolese economy, but this is not at all the case since the agricultural sector is still poorly financed and farmers do not have access to bank credits (only 2% of bank credits in 2019). Farmers are thus left to their own devices and do not have the means to acquire the capital necessary for their activity. This poor access to bank credit could be explained either by the absence of public policies to support small farmers or by the fact that these farmers constitute a high-risk clientele for conventional financing institutions such as banks and microcredit institutions whose business model is not adapted to these actors. These institutions require farmers to have accounts before they can access other products, particularly financing products, and this constitutes a major barrier to farmers' access to credit, either because they often live in rural areas and do not have access to these institutions, or because they do not have enough funds to create an account, or because they simply do not understand how these financial products work, or because the institutions do not have the appropriate means to assess the solvency of these actors. In order to work with these actors, these institutions require interest rates that can go up to two digits and farmers find themselves unable to bear these interest rates especially when they are forced to sell their products at an inopportune time to honor their credit commitments.  
On the other hand, it is the problem of selling products that makes small farmers lack the necessary funds to finance their activities because the majority of them do not have a great knowledge of the market. The sale of products is done in a haphazard and often unplanned manner.  Farmers do not have bargaining power in the market for the sale of their products and this affects their income. In addition, the flow of income of farmers takes place in a single period of the year and due to lack of knowledge these incomes end up being squandered without any capital acquisition planning.
These different problems constitute one of the main reasons that explain the predominance of poverty in rural areas.

To face the lack of financing of agricultural activity and facilitate the sale of agricultural products in Togo, we propose a solution that consists first of all in developing alternative methods of financing for farmers to enable them to finance their activity. This will involve using artificial intelligence as well as new techniques such as expected production, production and exploitation potential, and many other criteria to evaluate the solvency of small farmers to allow them to have access to credit. Our financing system differs from the conventional system in the sense that we want to propose financing that will consist in evaluating the solvency of a farmer and provide him financing that includes two components: financing in physical capital which means that we provide to the farmer all the inputs and the tools that he will need for his production; the second component of our products will be constituted by credit in cash to assure the possible needs of cash flow of the agent. Once the credit is granted, the repayment of the credit will be done in two ways according to the will of the farmer because we will give him the possibility to repay his credit with his own money or with agricultural products if he thinks that it seems more interesting. It will therefore be a completely digital structure where farmers will not necessarily have to go to the head office except in case of major necessity. The problem that could arise at this level is related to the low internet penetration among the rural population, but we plan to have agents whose mission will be to pass on the information and inform the population about the functions of the system. To facilitate the sale of their products, we will offer the possibility for our partners to access an address book of potential buyers

The populations that will be strongly impacted by our solution are the rural populations and more precisely those whose main source of income is agriculture. If the solution is well implemented, it will have the primary impact of providing financing for agricultural activity, increasing agricultural yields, and making agriculture a secure source of income. In essence, we expect it to have a positive impact by strengthening the economic security of rural populations and ensuring food self-sufficiency for these populations as well as for Togo as a whole. The overall impact will be a reduction in poverty among the rural population. Our solution could also have many positive externalities, notably the improvement of living conditions, health, education, and others because an increase in income would allow the population to meet their basic needs. 

My team is composed of a group of students who are interested in the issues and challenges of agricultural activity. The team is made up of different profiles in economics, computer science as well as collective intelligence.   So far we have worked together on other topics such as climate change, inclusive governance issues, and other socio-economic issues. Although our team is nascent and we have not yet had any joint achievements, each team member has had to undertake individual projects ranging from volunteer projects to non-volunteer projects.
In terms of representativeness, the members of the group are almost from rural areas and have therefore had the chance to experience the issue we are raising in most of their lives. Just to speak about myself, I came out of the rural environment just because of my higher education. 

To better understand the problem we identified, we first did some research to see if the problem had already been identified by other people. One of the things we also looked for was the efforts that the central authorities had undertaken in the past to solve the problem of lack of financing for agricultural activity.  We then initiated an informal discussion with small farmers in the village of Hèzoudè, which for us is quite representative of the realities of agricultural activity, given that the village has the same characteristics as a typical village in Togo. In order to be more representative in our work, we also conducted an online survey to find out which problems small-scale farmers consider as the ones that impact them the most. As a result of these different initiatives, we understood that the farmers' problems can be classified in three categories: lack of financing, climate change and its consequences, and lack of support from public authorities. 

the innovation that our solution brings lies in the process of providing financing. As demonstrated above in the description of the problem of lack of funding for agricultural activity, traditional financial institutions open up to farmers because they consist of customers with a high risk profile for their business model. Our innovation comes from proposing a new technique for evaluating the solvency of these players based on criteria other than the financial history which is often used to acess solvency. Another important innovation that should be noted is that instead of granting loans in cash as it is the case for banking and microcredit institutions. We lend which are made up of two parts: a part in physical capital and another in cash to serve the cash flow needs of the borrower. Another innovation is that  we give the possibility to the borrower to choose between two means of reimbursement: reimbursement by agricultural products and reimbursement in cash while also noting that we will be there to accompany them throughout through

As a goal, we hope that once launched, our program can offer financing to 50 small farmers and that our program can make agricultural work less arduous. and considerably contribute to the improvement of the well-being of these farmers. Our ultimate objective would be to position ourselves as an alternative source of financing for agriculture through which the small will be included in the financial system to also benefit from the funding.

The new approaches to credit scoring we are adopting call for technologies such as artificial intelligence and machine learning.
In addition, the provision of our solution to farmers will be thanks to a mobile application that will allow the farmer to subscribe and follow the progress of his loan application for reimbursement as well as to have an account that enables him to acquire physical capital such as inputs and services such as plowing by tractor and harvester

As mentionned earlier we are expecting to serve at least 50 famers in the first year of our solution

We are currently facing a lack of funding and technical assistance from an expert who could help us. But for the financial problem, we have not had the opportunity to present our project to a financial backer. Therefore,  we do not know the potential attractiveness of the project. The biggest obstacle is  that we cannot devote all our time to the project since we are students.
Although the project has not yet been implemented, we have identified potential barriers such as the low internet penetration of rural populations, the problem of legitimacy and trust of a new structure like ours.

we do not have any partner yet