How Can Smallholder Farmers Safely Save Money?

TL;DR

Smallholder farmers in West Africa can safely save money through myAgro, a nonprofit that uses a mobile app to help them save small amounts over time for improved seeds and fertilizer. This approach has enabled farmers to double their harvests and significantly increase their incomes, contributing to breaking the cycle of poverty.

Transcript

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 o... Read More

Key Insights

• 🌾 Smallholder farmers in West Africa, who are the largest group living on less than $2 a day, struggle with hunger and lack of cash when they need it most.
• 🌾 Despite government subsidies, yields per hectare have not significantly increased in over four decades, highlighting a need for a new approach.
• 💰 Farmers actually have small amounts of money to save, but lack a safe place to do so, hindering their ability to invest in their farms and improve productivity.
• 📱 myAgro, a nonprofit organization, helps farmers save up gradually for improved seeds and fertilizer using a smartphone app, providing a transparent and convenient savings plan.
• 🚺 Women, who are the backbone of farming in Africa, benefit particularly from this savings-led model, with 60% of myAgro farmers being women.
• 🌽 myAgro farmers grow twice as much food as non-myAgro farmers, resulting in a $200 increase in net income, a significant improvement for those living on $1.50 a day.
• 💡 By unlocking capital directly from farmers, myAgro is able to sustain its operations without the need for large amounts of working capital each year.
• 🌍 The potential impact of this savings-led approach is transformative, with myAgro aiming to reach one million farmers in the next five years and greatly reduce poverty and hunger in West Africa.

Questions & Answers

Q: How many smallholder farmers are there in West Africa?

There are 60 million smallholder farmers in West Africa, making them the largest group of people living on less than two dollars a day.

Q: What is the main reason why smallholder farmers go hungry each year?

Smallholder farmers often go hungry because they don't grow enough food to eat.

Q: What is the prevailing assumption about what farmers need to invest in their farms?

The prevailing assumption is that farmers need grants, subsidies, or credit in order to be able to invest in their farms.

Q: Why do smallholder farmers struggle financially, despite government investments?

Smallholder farmers earn the bulk of their cash at harvest time but are cash-poor again at planting time, leading to financial struggles.

Q: What is the fundamental problem that smallholder farmers face when it comes to saving money?

The fundamental problem is that smallholder farmers lack a safe place to save their money, which often leads to loss or temptation to spend.

Q: How does myAgro help smallholder farmers save money?

myAgro helps farmers save up little by little for improved seeds and fertilizer through their mobile app, myAgro Connect. Farmers can pay slowly over the course of nine months and can save up using scratch cards or direct mobile money payments.

Q: How does myAgro's savings-led approach benefit women farmers?

The savings cadence of myAgro's approach matches the small amounts of money women farmers earn each week at local markets, making it particularly easy for them to save. As a result, 60 percent of myAgro farmers are women.

Q: How has myAgro's savings-led model impacted farmers' income and living conditions?

In 2021, myAgro farmers grew two times more food than non-myAgro farmers, resulting in $200 of additional net income. This translates to a 35 percent increase for a farmer living on $1.50 per day. Farmers are breaking the cycle of poverty, improving their financial prospects, and transforming their lives and the lives of their families.

Summary & Key Takeaways

• In West Africa, smallholder farmers, the largest group living on less than $2 a day, struggle to grow enough food and lack access to safe saving options.

• Traditional government subsidies do not meet the full demand of smallholder farmers, who often rely on cash at harvest time but struggle during planting season.

• myAgro, a nonprofit organization, helps farmers save small amounts of money over time for improved seeds and fertilizer, resulting in increased harvests, higher incomes, and breaking the cycle of poverty.