Safaricom Limited is a leading mobile network operator in Kenya. Established in 1997 as a fully owned subsidiary of Telkom Kenya, Safaricom is now part of a small group of about 400 companies across Africa whose annual revenues are more than $1 billion.
Safaricom is committed to investing in a unique way of doing business through their adopted purpose to ‘Transform Lives’. The company is active in increasingly diverse sectors and aims to empower Kenyans with the necessary tools for economic growth. Safaricom aims to continually integrate the Sustainable Development Goals (SDGs) into the core of their business and believes that the role of business extends far beyond making profits.
The company views mobile telecommunications, and its related products and services, as a unique opportunity to improve the quality of life and contribute to sustainable livelihoods for people throughout Kenya.
Opportunity for Creating Shared Value
Agriculture is the largest single employer in Kenya, with some estimating that it accounts for over 60% of total employment in the country – but, as a sector, it only contributes 30% to the country’s GDP.
This is because the average smallholder farmer in Kenya rarely makes a surplus that he can profit significantly from, even though he spends his money on what he believes are high quality inputs. There are many challenges facing Kenya’s agriculture sector, from a lack of quality statistical data on farms and farming activities, farmers do not have access to resources that are available to help them to improve their farming activities, to a lack of financing options and access to quality and affordable agricultural inputs.
As a result, Kenyan farmers are at a distinct disadvantage compared to their counterparts in the Americas, Europe or Asia, despite enjoying some of the best climate and soils in the world. Many smallholder farmers in Kenya remain smallholder farmers forever, with no quantum leap in income to allow them to grow.
Data collected on these farmers showed that 90% of smallholder farmers in Kenya use mobile phones and as a telecommunications service provider Safaricom was ideally positioned to leverage mobile technology to innovate to empower these smallholder farmers and give them the right tools for economic growth.
A partnership with a company called Mezzanine, which delivers mobile-enabled solutions to companies doing business in Africa, resulted in DigiFarm, a platform that provides smallholder farmers with convenient access to a variety of services, including discounted inputs, financing and advice on best farming practice, all from a 2G enabled mobile phone.
DigiFarm offers an easy-to-use, text-based service to Kenya’s smallholder farmers. Farmers register on the platform and record details about the size of their farms and the nature of their farming activities This information is used to ensure that farmers receive support relevant to their specific farming activities. Once registered on the platform, farmers have access via mobile phone to a host of agricultural and financial services that the ecosystem offers.
Using DigiFarm’s loan module, farmers can also apply for small loans particularly for farming inputs such as fertilizers and livestock feed. Users are able to pay for their goods using M-Pesa, a mobile bank account and payments network, and are able to top up their own money with loans from DigiFarm, which are typically in the $10 to $15 range. The loans are backed by Mercy Corps, Mastercard, and Financial Sector Deepening Kenya, a trust dedicated to improving financial inclusion.
The platform also serves to build a national database of farming activities in Kenya that can be used for long-term planning and other projects. For government, data collected can help them in planning and resource allocation, as well help officials reach more farmers at just the click of a button.
700 000 farmers have registered on the DigiFarm platform during the first year, with over 200 using the service daily and 7000 successfully taking out loans to assist with purchasing high-quality seeds, fertilisers and pesticides (Safaricom 2018 Sustainable Business Report) .
Kenya’s smallholder farmer segment consists of an estimated 7 million farmers, with each farming household consisting of around 5 to 6 family members, and are among the most underserved group by financial and information services. DigiFarm can directly affect the lives of around 42 million people once fully functional and deployed nationally.
Challenges and Lessons Learned
Launched in March 2017, with 700 000 farmers registered on the platform, a target of 1.8 million farmers by December 2018 has been set. The project was awarded a Fast Company 2018 World Changing Idea Award and Gold at the 2018 Africa & the Middle East Loeries Awards, and the company plans to replicate DigiFarm in other markets including Egypt, Tanzania and India.