SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge Bundling Services for Impact The case of eWarehouse in Kenya

SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge Multi-dimensional complexity of agrarian poverty Smallholders face numerous, related challenges, including: limited market options and volatile prices; lack of access to financial services that enable farm investment; low availability of high quality, affordable inputs; and high extension agent-to-farmer ratios that result in limited knowledge about effective technologies, perpetuating low yields, farmers’ position as price takers, and a cycle of underinvestment and low returns. Less than 50% of maize farmers use the correct dosage of fertilizer 63% of poor maize farmers sell within 1 month of harvest versus 42% less poor Only 35% of Kenyan farmers are members of formal financial institutions 15-20% of agro- chemicals in Kenya are counterfeit

 Farm size: 2 acres  Main crops: maize & beans  84% likelihood < $2.50/day  No credit history  Last harvest:  Harvested 8 bags; sold 4  Stored crops in plastic bags at home  Sold bags 1 month after harvest at local market  Has never received training on post harvest handling  Top information needs: post-harvest, market info, pest management Farmer profile: Jenifer Kariuki Muketha

SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge More effective extension Linkage to inputs Linkage to markets Addressing farmer needs through integrated services delivery Linkage to finance

Mobile data services Market and sales facilitation Training and extension Harvest advance loan eWarehouse components SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge 1234

How it works SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge Pre planting, farmers registered via mobile survey 1 2 Throughout production, VKWs conduct training with farmers and questions are answered At harvest, VKW collects crop data, which is sent to FSP Loan advance sent to farmer Farmer loan repaid; balance transferred via mobile money At sale, buyer selected, grain inspected, & bulk purchase executed 3 VKW convenes farmers with loan officer to open accounts 4 5 MFI 6 7

A look at the numbers SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge ~47% price increase from harvest to sale time ~30% net increase in income 50% of market value of grain at harvest available 50% SHF prefer mPayments 4 month loan term 6% interest rate

Key insights: opportunities SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge 1Mobile data flows reduce transaction costs and increase visibility into farmer viability 02 Bundling services increases willingness to pay and linkage to sales transactions increases revenue potential 03 Training and market facilitation increase value to farmer and reduce credit risk Bundling deepens value to farmer and provides new opportunities for sustainability

Key insights: challenges SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge 01 Bundling services increases complexity and compounds risks 02 An agent network is critical to service delivery but most networks reaching farmers cost-effectively are unorganized and “biased” 03 Lack of single business owner requires creative incentives for convening diverse actors Business and operating model innovation is required to deliver integrated services at scale

Learning objective What types of business models exist/can be developed to incent diverse actors to provide integrated services delivery? SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge