A Transparent, Easy Way for Smallholder Farmers to Save | Anushka Ratnayake | TED

In West Africa, where I live,

there are 60 million smallholder farmers.

Smallholder farmers are the largest group

of people living on less than two dollars a day.

Many go hungry each year because they don't grow enough to eat.

Government subsidies,

which could be as much as 90 million in a single year for a country,

don’t meet full demand

and are often driven to large farms and male farmers,

even though women are the backbone of farming in Africa.

Despite these investments,

yields per hectare haven’t increased significantly in over four decades.

So smallholder farmers earn the bulk of their cash at harvest time,

but then, fast-forward nine months later, at planting time, they're cash-poor again.

The prevailing assumption is that farmers need grants,

subsidies or credit

in order to be able to invest in their farms.

But we found a surprising insight.

The fundamental problem isn't that farmers have no cash.

It's that they don't have it when they need it.

I first came across this paradox in 2008,

when I was working in microcredit.

Farmers would ask me things like,

“Can I over-repay my loan for next year’s loan?”

or, “Hey, could I repay my loan a year in advance?”

Even though they were using the language of credit,

what they were actually describing was a need to save.

But do farmers have any money to save?

Do people living on less than two dollars a day

have any money to save?

Well, it turns out that they do,

just in very small increments.

At a local market, they might sell a few eggs for a dollar,

or sell a goat for 10,

work on someone else's farm,

and over time, you can imagine how that money could add up.

But many farmers live far away from banks,

so they hold that money on them, or they hide it at home,

where it's at risk of theft, fire, even flood.

And hey, even without those risks, money at home is tempting.

It's hard to hold on to cash.

And sometimes, the smartest thing to do might be to spend it.

So the real problem that farmers face is that they lack a safe place to save.

And if they could save,

they could afford to buy what they need to make their farms more productive

and resilient to climate change.

This is a 100-billion-dollar problem in sub-Saharan Africa each year.

Setou, a peanut farmer in Mali, was facing a similar challenge.

When we met in 2014, she was feeling overwhelmed.

Climate change was hurting her harvest,

and at planting time,

she didn't even have money to rent a cow to plow her farm,

let alone money for improved seeds and fertilizer.

But we realized she could have saved for what she needed

if she had a safe place to do so.

Our nonprofit, myAgro, helps farmers in Mali, Senegal and Tanzania

save up, little by little,

for the improved seeds and fertilizer they need.

Together, these help improve harvests

and generate a 3x return on their investment.

Here's how the program works.

We start with a young entrepreneur like Demba.

We equip him with a smartphone and our app, myAgro Connect,

so that he can manage his sales territory.

At harvest time, Demba visits farmers in his village

and asks them if they want to sign up for a myAgro package

to improve their harvest and income.

After a farmer signs up,

they can pay slowly, over the course of nine months.

To collect their savings payments,

we replicate the way people buy prepaid minutes for their phone.

It's really simple --

you buy a scratch card, scratch off the back,

and a unique code appears,

which you text in to validate your payment.

We use the same technology to help farmers save up for the planting period,

and because farmers are familiar with how it works,

they trust it and use it correctly.

It's also so much more transparent than traditional methods,

which is usually, you hand over your cash to an agent, without any receipt.

With our platform,

we know exactly who has made a payment

and when and how much the village entrepreneur needs to transfer to us.

A farmer can also pay directly via mobile money, if they have it.

Farmers are able to save up in a way that's joyful.

They often hold on to their scratch cards,

and they look at them with awe and pride

of how much they've been able to save over time.

It's transparent, convenient and stress-free.

Tell me, when was the last time your bank made you that happy?

(Laughter)

(Applause)

Designing --

(Applause)

Designing a savings plan this way has made it particularly easy for women.

They value the democratic access to seeds and fertilizer,

and the savings cadence matches the small amounts of money

they earn each week at local markets.

In a region where 20 percent of women own a bank account,

60 percent of myAgro farmers are women.

In 2021, the average myAgro farmer grew two times more food

than non-myAgro farmers in the same area.

This translates to 200 dollars of additional net income.

For context, for a farmer living on 1.50 per day,

that's a 35 percent increase.

And by expanding the purchasing power for smallholder farmers,

the financial prospects of young entrepreneurs like Dembe

are also improving.

Before myAgro, he was doing OK selling goods on his own,

but now, selling seeds and fertilizer to his community via our model,

he is thriving.

He bought two freezers to expand his business,

and he dreams of building a home for his family.

Last year, Dembe served 400 farmers in his village.

Using a savings-led model has many benefits.

For the farmers, it's reliable and low-stress.

For the organization,

it means we don't need to raise large amounts of working capital each year.

Instead, we're unlocking capital from farmers directly.

And by offering farmers a trusted and transparent way

to save their own money,

they are breaking the cycle of poverty for their families

and entering a cycle of investment and growth.

Meanwhile,

Setou has transformed her life,

all with the power of her own savings and farming.

In 2014, she decided to try us

and planted a quarter of her peanut farm with us.

Each year, with her increased profits,

she reinvested a portion in building her assets.

Today, she owns ten cows,

which she rents out to her neighbors to earn additional income.

(Applause)

Last year, she planted her entire one-hectare peanut farm with myAgro.

And with her profit,

she proudly moved her family from their one-bedroom home ...

to this.

(Cheers and applause)

And now, the next generation is benefiting from Setou’s smart farm investments.

When we get this model to scale, it will be transformational.

Today, we serve over 100,000 farmers,

and with investments in data and technology,

our audacious vision is to reach one million farmers

in the next five years.

(Cheers and applause)

We believe we can harness the power of farmers' own savings

to greatly reduce poverty and hunger in West Africa.

Now is the time to use a savings-led approach

to ending poverty for farmers.

Thank you.

(Cheers and applause)