As the country went silent during the lockdown, not everyone retreated to their home. Joseph Ogwal, the founder of Agro Supply Limited, an Agritech startup was trying to solve a big puzzle when farmers were struggling to access farm inputs.
The lockdown had disrupted supply chains, and limited movement of goods making it hard for rural farmers to receive supplies.
During the lockdown, Ogwal had secured a working place at Hive Colab, a tech hub based in Kampala to continue helping farmers receive supplies through linkages with agro-processing companies.
Securing a timely supply of agro inputs to farmers, is part of a big problem that Ogwal is trying to solve on Ugandan farms especially for small holder farmers. This journey started in 2017.
His shields small holder farmers from falling into a debt trap as they secure farm inputs to continue with their operations.
Before starting Agro Supply, Ogwal lived in northern Uganda, working with an organisation that was developing a repayment process for smallholder farmers on their microloans.
He had heard many farmers wishing to pre-pay their loans. From this, he realised that they wanted a savings programme.
During a field trip while buying phone credit from a local shop in Barr Barr Sub-county Lira district, Ogwal realised he could sell agricultural inputs through this method: Buy a card, pay for inputs in bits, without necessarily using credit.
“In 2017, I quit my job and started Agro Supply. collected a team of developers and gave them a task to build a mobile Layaway payment system,” he says, adding, “This helped farmers pay for seeds off season in small increments to get them when rain comes back without taking them on credit,” he explains.
The Mobile Layaway system is a cell phone-based savings programme that helps smallholder farmers pay for seeds, fertilisers and other inputs without necessarily taking them on credit.
“Smallholder farmers no longer have to struggle to save lump sums to purchase seeds and fertiliser for their farms,” he says.
Ogwal says Agro Supply has pioneered a new bank-less savings model that enables farmers to invest their own funds in high-quality seed, fertiliser, tools, and training to significantly increase their harvests and income.
The system works using a prepaid scratch card model and mobile money similar to buying prepaid mobile minutes— here, farmers can pay in advance for seeds, fertiliser, tools, and training.
Farmers buy Agro Supply cards from a local Village entrepreneur or commission-based sales person, depositing their money into a layaway account by texting the scratch-off code or layaway fund into their layaway account through mobile money.
After three months of laying away funds, Agro Supply delivers the fertilisers, seeds, tools and training that the farmers have paid for in time for planting season.
“We do not charge farmers on using our Layaway payment system, we take a certain mark up on every input we sell to them,” he says.
Ogwal also believes statistics from Uganda Bureau of Statistics (UBOS) give enough evidence for the need of good quality inputs especially to smallholder farmers.
Currently, UBOS statistics show that 70 percent of the Ugandan population is employed in agriculture, yet over 84 percent of whom are small holder farmers in rural areas continue to struggle to have access to quality inputs.
Uganda’s population growth rate currently growing at 3.8 percent per annum indicates a proportional growth of small holder farmers to 33 million by 2025.
Ogwal says this implies an increasing need for agricultural inputs to match the increasing volumes of production.
Ogwal says 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.
Yet, 70 percent of the cost of lending to a farmer comes from field visits to determine creditworthiness.
With technology, Agro Supply has been able to reach over 15,000 farmers without having to recruit thousands of staff members.Mobile Layaway is similar to having a savings account at a bank. However, it is on the smallholder’s phone, which makes it easy to save money while buying supplies for their homesteads.
“Our layaway model runs through SMS and data networks on cellphones further disrupting the system instead of us choosing farmers, farmers decide if they want to work with us which is really powerful and transformative,” he boasts.
Ogwal is currently working with over 15,000 smallholder farmers in Uganda with 90 percent of them hailing from Northern Uganda and the rest spread across Eastern and west Nile.
“Our programme has generated a 50-100 per cent increase in yields and an estimated 50 per cent increase in farming income for smallholder farmers, with 50 per cent of which are women,” he says.
Ogwal believes the emerging technological advances, explosive growth in mobile phone ownership and connectivity throughout East Africa is a big blessing.