Started in 2018, Agricultural fintech company iFarmer has been working to connect small farmers with investors. Besides, it also provides advice to the livestock farmers and helps to sell the product by connecting with the wholesale buyers.
The iFarmer begins its journey with the goal to make easy availability of the supply and financing in the agricultural sector of Bangladesh. Currently, Bangladesh has around 20 million small-scale farmers who do not have access to credit or investment. Eighty percent of the money our farmers receive comes from microfinance or unofficial sources. The interest rate on their loans is higher too. Financially, farmers are not interested in investing in high-quality agricultural inputs, which will help them in production, such as seeds, pesticides, etc. In addition, farmers have to sell their products through three or four levels of intermediaries to reach the buyer in the market. As a result, farmers have to lose a large part of the profits. Considering the facts and about these issues, 'iFarmer' started their journey.
Recently iFarmer developed an app for the farmers and farm beneficiaries (different farms including fish, cows, goats are called farm facilitators beneficiaries) to digitize (or digitalize, in Bangladesh the terms tend to be used interchangeably) agriculture and empower the farmers.
What is Sofol App?
Sofol is a pilot program that should be used by the farmers. But since the Bangladeshi farmers have little or no knowledge about the internet and smartphone, it works via a facilitator. The goal of the Sofol app is to collect the farmers' data, collect the financing requirements, distribute the money among the farmers, support and follow up after disbursement, share weather updates, and other relevant issues using the IoT (Internet of Things).
The app was launched on September 15, 2020, by appointing 5 Facilitators from Nilphamari, Kurigram, and Lalmonirhat. Since the beginning of Sofol, more than 5000 farmers have registered on Sofol via the facilitators.
The Sofol app uses human agents, remote sensing, and mobile technology to reduce the farming cost and complexity for smallholder farmers.
How does Sofol Work?
Sofol works in a few steps.
Firstly, the appointed facilitator will collect the data from the farmers and put them in the app. The facilitator will collect the respective farmer's NID to verify in real-time through the Bangladesh Government's Porichoy Database.
After the verification, the facilitator will fill the KYC form for farmers in the Sofol app, and an automated score shows up assessing farmers' financial capability.
After that, the app will look for the finances from the iFarmer's database. Then farmers will produce the product and send it to the marketplace through the iFarmer supply chain process.
And finally, the funders will get the return on their investment. This is a continuous process; the iFarmer will look for the financiers again and continue the process.
iFarmer and Sofol are jointly working towards building a digitalized agriculture in the country. Although Sofol is running a pilot program, it offers some astonishing features. Let's find out the features one by one.
KYC and Loan Application
Through the Sofol app, a farmer can get their identity verified and apply for the loan accordingly. The facilitator will update the farmers' asset information to help them to apply for credit and get approval. The loan application will work based on the data provided by the customer.
Since the Sofol app is farmers-centric, it aims to boost the farmers' productivity and safety. Therefore, iFarmer added weather update features in the app. As a result, the farmer will get updates on any upcoming hostile weather. The app starts geo-mapping the area when the registered farmers live and eventually measures the probability of heavy rainfall or even the flood. The app will then send the updates to the facilitators as well as to the farmers to take precautions.
The Sofol collects a wide range of data. Through the KYC form, it collects around 40 data points from the farmers measuring the socio-economic condition, financial info, personal information, behavioral info, and more. The detailed profile of a farmer is created based on the collected data. Alongside some additional data, the app eventually creates a strong credit scoring model.
The app has already built a detailed credit scoring model using the existing data, which is currently activated in Natore and Pabna as a pilot program. It collaborates with the Mutual Trust Bank and Prime Bank in Pabna and Natore. Further, iFarmer helps these two banks find 200 eligible farmers to offer loans. However, the credit scoring system is nothing but a decision-making tool for financial organizations to find the right farmer.
The follow-up model in the Sofol app will allow the company to get updates on farmers regularly and take proper steps to improve the outcomes. However, the app will advise the farmers about the crop density, fertility, etc., through the follow-up by using the collected data.
Assessing the Land
With the collected data iFarmer can also assess the land and study the expected yield along with the yield history. It helps the financers to take the decision while financing on that particular land. To have the proper measurement, iFarmer also gathers data from the satellite of a certain area about the crop history of the past few years, the density of the crops, soil fertility, etc. Thus, these data can help to identify the high-yielding and profitable crops.
Since the rural farmers don't have the proper education or access to the smartphone and internet, the facilitators always need to stay connected with the farmer. Besides, the app works online, so having no internet or poor internet will not actually make the app working. So, the iFarmer is seeking to make the app work offline.
The Future of Sofol App
In the near future, Sofol will get focused on interacting with farmers and make a good relationship. So that farmer can get instant advice by posting a photo of their crops. Furthermore, the app will seek to work more efficiently with less human intervention. According to the iFarmer, it will launch some new features in the next few months and eventually deploy a full-fledged version at the end of 2021.