Founder and CEO of myAgro, Anushka Ratnayake, talking to a smallholder farmer.
Any entrepreneur who’s tried to reach customers in the most remote, rural parts of Africa, Latin America, and Asia knows that it’s inherently costly. It requires hours of travel down dusty dirt roads to communities often lacking basic infrastructure. And once you’re there, it requires long-term partnership building—to understand the community’s unique needs, establish mutual trust, and develop new solutions for an overlooked segment of the market.
For those of us who serve the needs of the 2.5 billion people dependent on smallholder farming for their livelihoods, this cost—and the related risk—is a key obstacle to scaling up solutions. In recent years, an emerging number of fintechs and other organizations have begun leveraging SMS and mobile technology to reduce costs and reach previously inaccessible customer segments. One such organization is myAgro, which increases the harvests, and therefore incomes, of African farmers by enabling them to obtain seeds and other inputs using a savings-based layaway platform. Fellow Skoll Awardee Anushka Ratnayake founded myAgro to fill a market gap for smallholder farmers—and she did it by using SMS and mobile technology that was already a big part of her customers’ lives.
I recently spoke with Anushka about her mobile-based solution for smallholder farmers, the power of technology to advance financial inclusion, and her plans to reach 1 million remote rural customers by 2025.
Willy Foote: Tell us about your journey as a social entrepreneur. What prompted you to found myAgro?
Anushka Ratnayake: I founded myAgro in 2011 with the belief that those who feed us should not go hungry themselves. Smallholder farmers make up 80% of the world’s poorest people, and this is what the myAgro team strives to change. Before starting myAgro, I was living in rural Kenya, working with an organization that was developing a repayment process for smallholder farmers on their microloans. I heard many farmers speak about wanting to pre-pay their loans in advance, and realized that they were really describing their need for a savings program.
I left Kenya to travel and research alternatives to credit for smallholder farmers and could not find any organization that offered a savings program. One day, while buying phone credit from a local shop in rural Rwanda, I realized that we could sell agricultural inputs through this same method: Buy a card, pay a bit for seeds.
In 2011, I moved to Mali to test this savings-based payment model for seeds, fertilizer, and training with 240 farmers. Since then, we have led myAgro to become a multi-country program in Mali, Senegal, and Tanzania with over 60,000 farmers.
A myAgro customer checking their balance on a mobile phone.
WF: You’ve stated that “We’re not asking farmers to change their behavior to match an outdated financial system – we’re changing the system to match them.” myAgro is able to provide a bank-less savings scheme to customers at the base of the pyramid by leveraging mobile technology that they already use in their daily lives. What role do you see technology playing in getting us to real financial inclusion? What are the challenges?
AR: The most challenging part of serving smallholder farmers is that they live in rural, remote areas that are very expensive to manage with traditional extension or financial services. Seventy percent of the cost of lending to a farmer comes from field visits to determine creditworthiness. With technology, myAgro has been able to reach over 60,000 farmers without needing thousands of staff members. Our layaway model—run through SMS and data networks on cellphones—further disrupts the system: instead of us choosing farmers, farmers decide if they want to work with us. This is really powerful and transformative.
Technology helps us to connect to farmers and provide services at a much lower cost per farmer than ever before. And it turns out farmers have increased trust in us because of the transparency technology can provide. For example, previously, to check their balance might have cost a farmer $2-5 in transport, as well as lost time to physically visit a financial branch or attend a meeting. When all you have is $2, that cost is too high. Now they can just send an SMS to get that information without leaving home.
myAgro has been successful in replicating technology that farmers already use, thus removing the need to introduce new technology to our clients. When we introduced prepayment for seeds and fertilizer, we replicated how people in these areas buy prepaid minutes for their phone through purchasing scratch cards. Now, we know that people are accustomed to watching YouTube, so we are providing trainings on YouTube. I think the challenges are usually introducing new technology and building trust with a customer, but it helps if you leverage a technology that they are already familiar with and simply adapt it to do a new activity.
WF: Two months before myAgro’s first planting season, Mali underwent a military coup, the government shut down, and foreign donors pulled out of the country. We’ve seen this happen more recently in Nicaragua—a lot of hard decisions need to be made when the place you’re working in becomes even more risky and unstable. Tell me about your decision to stay in Mali during that period of volatility, and about the challenges your organization faced.
AR: I never had a doubt about staying in Mali. My biggest concern in that first year was whether farmers would trust us with their money. The first 24 hours of the coup were nerve-wracking and I was worried that farmers would assume that we were leaving the country, as many other organizations were doing. I thought they would decide to pull their money out and leave our program altogether. As I sat at home, while the whole city was quiet waiting for events to unfold, I started hearing the ding on myAgro’s phone, indicating that mobile payments were coming in! Farmers still trusted us and continued to make payments. We delivered to 240 farmers that first year, far above our initial 30-farmer target!
One of our biggest challenges at that time was scaling so quickly. We knew that we needed funders to support our operations and offset our costs—for example, because of the coup, we had to buy fertilizer earlier. We had to prove to funders that, as a new organization, we had the capacity (organizational, financial, and people) to scale up in an environment that, for almost a year, didn’t have a legitimate government. In order to allay some of those fears, we diversified our program risk by expanding to Senegal sooner than planned. In the end, we demonstrated that we can operate in a difficult environment.
I’m also someone who loves to focus more on the work and less on talking about it. But I learned early on that we need to communicate even more during challenging times to balance out news reports of doom and gloom.
Anushka Ratnayake with female farmers.
WF: Women make up as much as 80% of the agricultural labor force in some countries, yet they tend to earn lower wages. Meanwhile, in Africa, 60% of the population is under the age of 25—yet the average farmer is 60 years old. It’s clear that rural women and youth are marginalized from the rural economy. How can we ensure that financial inclusion is truly inclusive of these groups?
AR: Generally, the ecosystem overlooks women and youth as people who have money, and who can actively purchase inputs and improve their own situation in life. In reality, women and young people can buy financial products or purchase seeds and fertilizer if they have a financial tool that matches their needs. In Mali, for example, women make up 80% of myAgro’s farmers. But when I first started, we had many doubters who said women wouldn’t have enough money to purchase inputs. Now those same doubters are convinced our layaway model is the key to unlocking capital to invest in the local seed market, and have replicated that model—which is great!
Ultimately, we have always believed that women have the same goals as men: to increase productivity and to support their families. From the beginning, we created marketing initiatives geared specifically toward women; and we develop products, like sorghum, that women want to grow. We also use data to help us improve our services for women and youth—from how we design marketing to what frequency famers prefer to meet in person vs. receiving a phone call. For example, we tested three different marketing campaigns to increase the sale of sorghum—a climate-resilient crop. It turns out that running a nutrition campaign, including cooking classes on sorghum, helped increase enrollment by 30%. So, after a pilot, this was scaled across the entire organization and now women purchase the majority of sorghum packages.
For young people, their biggest challenge is knowing when they will earn income. It makes financial planning very challenging. Roughly one-third of our farmers and nearly all of our 2,000 village entrepreneurs are under the age of 35. What we’ve found is that setting a long-term goal of what they want to achieve—for example, purchase a motorcycle, pay for nursing school fees, or build a house—helps guide their agricultural and entrepreneurial activities to be more focused over a long period of time. They then have intrinsic motivation to increase the activities they do to earn money.
On the other side, though, one organization can’t solve these problems on their own. Women, youth, and farmers in general, also need to be supported by an environment that make it easier to do business—whether that’s better roads to reduce the time it takes to get goods to market, policies that improve competitiveness in the local seed industry, or stable electricity so more manufacturers can operate locally and compete with imports.
WF: myAgro has an ambitious goal: To increase the income of 1 million smallholder farmers by 2025, moving them above the poverty line and into the middle class. How do you plan on getting there?
AR: In the last few years, we have developed a streamlined, cost-efficient, and technology-focused version of our model. Now, we are ready to hit the accelerator. A key way that we are going to do this is through partnerships. This includes government partnerships—we just signed a Memorandum of Understanding with the Malian government—as well as with savings groups to expand myAgro’s model. There are over 18 million savings groups globally—made up mostly of rural women, two-thirds of whom are smallholder farmers—who will benefit from working with us.