Pollen

70% of smallholder farmers and women in Zambia struggle to access affordable financial services. Lack of digital identity, high cost of borrowing, limited tools for interest bearing savings nor payment solutions are some of the issues women, farmers and small businesses face today, thereby hindering their potential to grow. Without credit, smallholder farmers are unable to purchase the equipment and tools they need to mitigate the impacts of climate change, increase yields, and ultimately improve their income and livelihood. Existing solutions that are trying to bridge this gap are either expensive, un accessible, not tailored to the poor or in the case of village banking, have hurdles such as KYC, minimum investments, high service fees, punitive penalties, scams and theft. Therefore, lack of tools for interest bearing, investing, borrowing, and saving by small-scale farmer results in failure to optimize crop productivity

Pollen empowers women and farmers to bank themselves by providing a

simple USSD service to conduct secure, cheap and transparent cross-telecom
digital village banking. With Pollen, we decentralize the entire access to
finance process through village banking model, whilst providing impactful
opportunities for users to conduct cross border payments, accessing global
lines of credits (decentralized money markets) and markets for their products. We aim to provide a simple—but effective—ecosystem for peer-to-peer lending in order to service the unbanked, promote saving, and generate data to offer affordable microloans anywhere and everywhere without internet. The overall goal of Pollen is to provide a platform for women and

farmers to access information, agriculture capital/inputs, and financial
services--all via USSD. 

The purpose is to bank the unbanked through a digitized and decentralized village banking model. The innovation seeks to achieve this through the following outputs: increased access to financial services, reduced financial exclusion among farmers, increased individual savings on the platform, and increase household incomes. 

We are focusing on a specific, high-impact target market (village banking and small-scale cross boarder). Focusing on village banking and small-scale cross boarder enables us to have a direct impact on women as well, given that 78% of saving group members in Zambia are females (SAVIX) and 70 to 80% of small-scale cross border traders are women (TRALAC, May 2020)

We have a dedicated team of founders that are driven by the goal of helping farmers reach prosperity using financial innovations. Given our background as an agribusiness and social enterprise, we believe we are uniquely positioned to not only design the best system that mitigates issues for this specific target market, but also to work with them through potential future challenges. The founders of Fourth Line Limited, are financial inclusion experts with a track record of developing digital solution that have had social & economic impact on several fronts. They also have extensive experience working with farmers that participate in savings circles and women who are in cross boarder trading business. The team has proven experience of developing and managing relationships with various stakeholders and collaborated with different organizations in the past to design and implemented financial literacy, digital financial product and beekeeping empowerment projects.

The product has been in development for 12 months and is ready for live testing. We have already signed agreements with key partners (MTN and Zamtel Mobile Money) and have a pilot partner lined up (We Effect) that is prepared to test the innovation on the existing village banking groups in their network. We have thoroughly tested our system in a sandbox environment where important components and functionalities of our product have been tested and are now ready to launch a live USSD code via Africa's Talking and push our product into production.

We are pre-launch but have 1000+ farmers on a waiting list to join the platform. Fourth line Limited directly contracts 800+ farmers and we have 5000+ in our close family network.

We are applying to Solve in order to be linked to potential partners in NGOs that work with thousands of smallholder farmers and producers who we can serve with this solution. The other issue we hope to be assisted with is liquidity challenge. Establishing a saving and payment system for small-scale farmers is very challenging because they usually require cash to pay for agricultural inputs (e.g., seeds, fertilizer, equipment, etc.). Cash is not only untraceable, but it is difficult to transact if mobile money agents are facing liquidity issues. When farmers receive money via mobile money transfer, they typically need to find a mobile booth to withdraw their funds, which is cumbersome and not transparent. Therefore, we are looking for an experience payment exchange company that help us with on and off ramp liquidity issue we are faced with.

Pollen is one of the most innovative and impactful USSD services since the dawn of mobile money, as it’s one of the first village banking services on blockchain and the first ever-decentralized application to run on USSD. On the front-end, we are a typical USSD interface with numerical and text-based inputs and outputs. On the backend, we have an innovative bridge from USSD to the Celo blockchain that enables fast, global, immutable, and stable payments.  Our middleware interface allows users to manage village banks, while their funds are held in Dollar/Euro stable coins and their actions are recorded to a blockchain. 

Our current business already works with 620 of farmers in cooperatives and 5000+ in our close network that are looking for a product like this. We estimate that our solution will impact 50,000 people over the next five years in Zambia. We project our innovation to impact farmers in the following:

1) Increase financial literacy and education: The financial literacy education and training program will help farmers and users to understand a lot about money. This is important as financial literacy levels are still low among farmers. Increased adoption of our digital solution will improve financial literacy in most farming communities.

2) Agricultural Output: We expect farming communities that will have access to digital financial services through our innovation to record an increase in their agricultural output by 30%. We expect the impact on agricultural output to increase as years goes because farmers will be able to access more loans and other agriculture bundled services.

3) Increase incomes and savings: We expect farmers to increase their household incomes and savings as results of access to soft credits. Imagine a farming cooperative being able to pool their funds to purchase a water well or solar powered irrigation without having to trust other members to act honestly and not steal the money. By promoting community-saving schemes among women smallholder and livestock farmers, we enable them to fund equipment and Agri-input purchase without the need for a bank to give them a loan.

Our key performance indicators are as follows:

• Total number of village banks on the platform
• Weekly active users
• Total assets under management
• Total volume
• Utilization ratio (debt:collateral)
• User satisfaction
• User perceived sense of security
• Growth in users’ net worth

We will also be tracking the total number of women taking loan and successfully repaying the loans. Total number of loans that are take-out for starting or expanding a business. 

Pollen theory of change is premised on the assumption that while village banks have been put on a blockchain before, they were only proof of concepts to show how the programming logic could function autonomously and securely via smart contracts. However, they have never been leveraged in real world use cases / groups. By putting village banks on blockchain, it makes them far more decentralized, secure, transparent, and democratic. Likewise, by taking away the abstracting complexity of blockchain technology so people can read/write to it from a flip phone via USSD, we make it easy for the unbanked farmers to save in village banks plugged into money markets to earn risk-free yield on USD and EUR stablecoins held in villages. There is strong evidence that blockchain opens a realm of new financial possibilities. One such option is the ability to earn interest on stable assets. Currently, users of decentralized finance applications can earn 15% on fiat pegged digital assets, which would be a game changer for smallholder farmers and farming cooperatives. However, there is limited evidence on the applicability of blockchain powered villages banks in rural areas where there is limited access to reliable internet and/or electricity, and many do not even have a smartphone. This is exactly what this innovation is trying to achieve and resolve. We are wary of some of the barriers to the effective implementation of this innovation. We also recognize accessibility and remote location of smallholders as potential issues in terms of effectively rolling out the innovation. Using USSD allows us to reach users regardless of their device type. By providing a non-custodial on-ramp to stable digital-currency lending, we can lower user-onboarding costs and simplify the setup process.

The technology we are using is Celo blockchain: an open, permissionless DLT with Ethereum Virtual Machine compatible smart contracts. In this environment, transactions are settled within five seconds with complete immutability.

Our team is very diverse. We are comprised of people from different background, ethnic grouping, religion and race. Our approach to ensure inclusivity, equity and diversity involves recruiting people without racial or gender discrimination. To ensure equality, we focus on hiring competent and skilled people including women and youth.

Our solution is specifically designed for the underserved and marginalized communities, farmers, youth, women, and people living with disabilities. The targeted users in the rural areas are within a kilometer radius of mobile money cash-out stations. We chose the targeted beneficiary for two reasons: (1) Smallholder farmers tend to be unbanked, and (2) we already work with a vast network of farming cooperatives for our honey business. 

We are starting by digitizing the decentralized finance they already conduct, and if we are able to prove the robustness of connecting USSD to the Celo blockchain, we will be able to aggressively expand our offerings. Given the lego-style composability of applications on the Celo blockchain, we will be able to offer this, zero-loss lotteries, high-interest savings on stable assets, and much more. 

We will be generating revenue from 3 streams:

• 1)Stackings (savings):  we will charge 15>#/i### on interest earned on users’ funds pooled together and invested in DeFi protocols (Decentralized Money Markets).
• 2)Micro loans: We will charge 10>#/i### on loans provided/disbursed via our platform. Loans will be capped at 50% of total saved by users so we can avoid credit risks whilst minimizing loan defaults to 5%.
• 3)Transaction fees: We will charge 1.5>#/i### on international remittances and global payments from individuals and NGOs. 

Village banking is our bread and butter, but we believe we will achieve full scale by continuing to offer more innovative financial services. We are starting by digitizing the decentralized finance they already conduct, and if we are able to prove the robustness of connecting USSD to the Celo blockchain, we will be able to aggressively expand our offerings. Given the lego-style composability of applications on the Celo blockchain, we will be able to offer high-interest savings on stable assets, digital loans and much more. Our market research has revealed that over 30,000 saving groups exist in Zambia with a total group membership of 600,000. Total annual savings across the saving groups is estimated to be over $12 million and return on saving is 20% (The Savix). We project to capture and service 30% of the village banking market in our first 3 years of operation. 

Our market research has revealed that over 30,000 saving groups exist in Zambia with a total group membership of 600,000. Total annual savings across the saving groups is estimated to be over $12 million and return on saving is 20% (The Savix). We project to capture and service 30% of the village banking market in our first 3 years of operation. Our target is having 250+ saving groups and 5,000 active users on the platform. Our projections are based on the assumptions that 80% of registered users will; (i) at least transact an average of $500+ per annum, (ii) each saving group will save at least $4,500+ per annum, (iii) and at least 25% of the users to get loans. This will see us generating $102,500 in revenue. We project a loss in year 1 of operating due to high start-up costs, cost of technology and operational expenses. Overall, after a year of operation, we expect to see a revenue growth in the range of 20-30% as result of increased product adoption and expansion.