Sofol

iFarmer Limited

Sofol

Sofol builds farmers' socio-economic profiles, which banks use to approve their loans.

Dhaka, Bangladesh

BGD

For-profit, including B-Corp or similar models

The World Bank estimates that 500 million small farms are excluded from the formal financial sector. In Bangladesh alone, about 16.5 million farmers struggle to get credit from banks. Without low-cost credit facilities from Banks, their ability to grow more food and improve their income remains limited. Credit from informal sources are much costlier than formal credit. Most smallholder farmers can't get loans from banks or formal financial institutions because they don't have records of their financial activities. Financial institutions need collateral or transaction history to decide if someone qualifies for credit. But most farmers work in cash-based systems that don’t generate any record of their financial activities. As a result, banks can’t provide credit to these farmers.

iFarmer has a solution called Sofol. It is an app. We collect and record socioeconomic data of farmers to create their profile. When farmers get loans through us, Sofol updates their profiles with financial transaction records. We also record when they purchase an agricultural input, or when they sell their produce to us. This information helps banks better understand the farmers' creditworthiness. It makes it easier for banks to approve loans. We use an assistive model. Our field operation staff capture and record data as most farmers do not have knowledge required for using the app.

iFarmer’s target customers are the 16.5 million smallholder farmers residing across Bangladesh. Almost 80% are these farmers unbanked and rely on informal sources for credit. These informal sources are costlier than formal credit. *Smallholder - Smallholders refer to those farmers who hold small sizes of land. In Bangladesh, farm households owning or operating farm sizes of 5 decimals to 249 decimals are called smallholders (Smallholders need intensive care, 2020). iFarmer’s solution creates a digital consolidated database of farmers. By doing this, iFarmer connects farmers to the financial inclusion ecosystem. In the long run, iFarmer’s solution improves farmers’ farming business and makes them more resilient.