It may sound contrarian, but Benjamin Njenga believes that Africa’s smallholder farmers are among the richest people in society.
“They are the people who own land,” says Njenga, co-founder and chief customer officer at Nairobi and Amsterdam-based Apollo Agriculture. And because of that, he tells AFN, smallholder farmers have both a valuable asset for themselves, and one that is essential to feeding the continent.
But Africa’s smallholder farmers are also low-income earners, which makes them “poor” by most international economic standards. Apollo Agriculture exists to ensure that farmers can unlock the economic value of their land, and in turn, boost their incomes while feeding a growing continent.
Since 2016, Apollo has been equipping farmers in Kenya with appropriate technology, tools and financing to help them transform small-scale farming operations into profitable enterprises, setting smallholder farmers on a path to economic empowerment.
“We support farmers in producing more and thus making more money and transforming their livelihoods,” Njenga tells AFN.
The majority of Kenya’s farms range between 0.25 and three hectares in size. These small-scale operations account for most of the country’s food production.
But most of Kenya’s farmers operate well below capacity. For example, Kenya’s farmers harvest only about 1.7 metric tons of maize per hectare of land, according to the United Nations Food and Agriculture Organization. That’s 20% less than farmers globally, and five times less than a typical harvest in North America. It’s even below several other producers in the region, including Zambia and Rwanda.
Apollo, which functions as an agribusiness marketplace, strives to help farmers overcome productive barriers by serving as a one-stop-shop for all of their farming needs. It sells farm inputs like fertilizer, high-quality seeds and pesticides; it offers financing and insurance, as well as training and capacity building; and it helps farmers find reliable and fair markets for their goods.
“We are seeing farmers posting 200% to 300% increase in terms of production,” Njenga says.
Apollo supported about 1,000 farmers in during its first growing season in operation in 2017. It started in Nakuru, about 170 kilometers northwest of Nairobi, focusing mainly on maize farmers. Apollo has since expanded to eight of Kenya’s 47 counties and worked with 70,000 active customers last year. Cumulatively, Apollo has financed around 100,000 farmers and aims to double the number to 200,000 farmers in 18 counties next year.
Apollo has grown quickly because it early on discarded a conventional assumption that farmers in rural areas are hard to reach, Njenga says. The startup has invested in automated operations, creating a seamless system for customer acquisition, lending decision-making, last-mile distribution, and payments and collections. Farmers interact with Apollo via simple SMS and USSD technology, but the network’s backend us built on machine learning, remote sensing, satellite imagery and sensors.
The use of machine learning, for instance enables, Apollo to build a credit profile of its customers and process large amounts of customer data. Satellite imagery enables the company to monitor farms and crops remotely.
“Use of technology has reduced the costs of servicing customers and made us build a business model that is truly scalable and profitable,” explains Njenga.
To onboard customers, Apollo enables farmers to apply for inputs and financing via SMS, after which it dispatches an agent assess the farm in person.
“We link the loan to the size of the farm,” Njenga says, adding that once a loan is approved, the farmer gets a voucher for the nearest agro-dealer where he or she can pick up their supplies. Apollo has partnerships with several agro-dealers in Kenya. The dealers use Apollo’s app to see what inputs have been approved for each farmer. Apollo then processes payments to the dealer instantly via mobile payment service.
“The farmer does not get cash,” says Njenga; they get inputs instead and coordinate payments with Apollo directly. Farmers must put down a deposit of 10% of the total amount for the inputs they buy and repay the remainder once they sell their produce.
Pathway to growth
Instead of approaching commercial banks as financial partners, for now Apollo has opted to fundraise and lend off of its own books. Last year, the startup raised a small debt round from the Agri-Business Capital Fund, or ABC Fund, which is managed by impact investment firm Bamboo Capital. In 2020, it raised a $6 million Series A equity round from Anthemis Group, Bayer’s venture arm Leaps by Bayer, Accion Venture Lab and Flourish Ventures.
Long-term, Apollo’s goal going into the future is helping farmers to transition to commercial farming by diversifying from maize to high-value crops like tomatoes, potatoes, onions, French beans, tea, cabbage, sunflowers and soybeans. Because of an influx of imports and exploitation by middlemen, it is becoming increasingly difficult for maize farmers to get a good price for their produce, says Njenga.
Apollo also wants to improve farmers’ climate resilience by helping them secure crop insurance and transition from rain-fed agriculture to smart irrigation, he adds.