9 Posts authored by: jamieh

By Daniela Martinez Berrios

Knowledge Exchange Intern, Feed the Future Partnering for Innovation

This is the first in a series of examples of companies successfully overcoming challenges to find profitability in smallholder markets. This week, we are looking at Musoni, a digital-based microfinance institution in Kenya that has gained smallholder farmers’ loyalty through its high-touch customer service, easy processes, and transparency.

In Kenya, smallholder farmers lack access to financial services and face high barriers to accessing commercial banks and community lending institutions. These institutions rarely approve loans to smallholder farmers or have a slow turnaround time for approval, preventing farmers from getting capital when they need it in the agricultural cycle. Smallholder farmers not only face the improbability of loan approvals, but even if they are approved, they often encounter hidden fees on top of already-high interest rates.

Musoni has developed a model that enables it to reach high volumes of often remote smallholder customers with its agriculture-specific Kilimo Booster loan, despite having interest rates that are as high as many commercial banks. Musoni is able to be competitive in the microfinance sector because of its high-touch, transparent, efficient approach, which treats loan recipients as valued customers, builds relationships of trust, and takes advantage of digital technology. Customers are willing to pay relatively high interest rates in exchange for easy processes, expert and trustworthy customer service, and transparency.

At many Kenyan banks, customers usually need personal or family connections in order to schedule appointments, making it difficult to inquire about loan or repayment details. In contrast, at Musoni, customers can receive walk-in appointments for any issue. Musoni loan agents also visit farmer customers at their homes, building relationships that make lending easier for farmers and loan agents. Unlike many traditional Kenyan banks, Musoni wants to see its customers grow, and the relationships it builds help Musoni determine if and when customers are able to increase their loan amount. Also unlike many traditional Kenyan banks, Musoni is transparent about the cost of a loan. Although its interest rates remain high, it doesn’t have the hidden fees often associated with loans in Kenya, further building customer trust.

Musoni is able to reach rural, remote customers thanks to its new cash flow software and its practice of placing loan agents in every village where it works. Village loan agents visit farmers in person, and use the new cash flow analysis software the Grameen Foundation, with support from Feed the Future Partnering for Innovation, helped it develop. With this new software, Musoni loan agents are able to wirelessly submit farmers’ loan applications and track customer information, including repayment information and changes in income, making loan processing more efficient. In addition, this also means that farmers do not have to travel to the bank or complete a complicated loan application with considerable documentation requirements. If a Kilimo Booster loan is approved, it is deposited into the customer’s mobile money account within 72 hours. This client-focused approach benefits customers as well as Musoni, which profits from the decrease in time needed to complete each application. In addition to the software used by loan agents, Musoni also offers customers a mobile platform from which they can receive payment reminders and obtain other information about their loans, reducing the need to make visits to physical banking locations. Michael Chege, a Kenyan farmer, also points out that “Musoni is also flexible in case of disaster and willing to work with farmers to get payments in.” 


Musoni has successfully disbursed 16,826 Kilimo Booster loans valued at $6,425,457 to date, proof that its high-touch approach, simplified loan application process, and transparency makes it a strong competitor against other financial institutions despite comparable interest rates and a difficult-to-reach customer base.

Next week, we will highlight another successful company and its work in tapping into smallholder markets. How are you making yourself competitive in smallholder markets? Tell us about it in the comments below!

Lack of access to information is one of the largest factors constraining growth in smallholder markets. For smallholder farmers, this knowledge gap prevents them from using the inputs, applying the data, acquiring the credit, and reaching the markets needed to increase their productivity and contribute to improving food security in their communities. For companies and financial institutions, it is often difficult to access reliable, timely, useful, and comprehensive data about rural, low-density smallholder markets. For these organizations, this knowledge gap heightens perceived risks, limits their customer base, and increases operating costs – reducing the incentive to expand into smallholder markets.

Fortunately, rapid advances in geographical data technologies (geodata) and information and communications technologies (ICTs) are closing this knowledge gap, helping smallholder farmers and financial and agricultural companies work better together. Geodata and ICT applications, such as real time weather, market, and pest data can help farmers increase their productivity and access markets and finance. In turn, these ICT platforms can provide financial institutions with information about these farmers, lowering farmers’ risk profile and making them more attractive potential loan recipients. Additionally, these technologies can also decrease financial institutions’ operating costs by making it easier to keep records of farmers’ performance, better understand farming, and bring down transaction and monitoring costs, making these institutions more efficient and enabling them to reach more customers. Grameen Foundation Kenya Office and Musoni, a microfinance institution in Kenya, recently started using a new SMS-based ICT platform for its customers, allowing them to access and manage their accounts from their phones. At the same time, the company fully digitized its loan operations with a tablet-based platform, reducing the amount of time and effort required for loan officers to manage clients and enabling them to dramatically increase the number of smallholder customers it could reach.


For companies, integrating geodata and ICT platforms into a business model can offer a number of benefits. First, young farmers are more attracted to agriculture when new technologies are involved, and are often willing to act as early adopters in their communities. Second, improved data plays an invaluable role in tailoring marketing campaigns, such as through segmenting, marketing, and positioning. These technologies can also distinguish a company from its competitors, making it more attractive to potential customers by offering an informational service along with its other products. These technologies also lower the cost of providing extension services. When properly packaged and paired with in-person interaction, these platforms can improve farmers’ productivity and incomes. Finally, ICT platforms can help companies integrate smallholder farmers into formal markets. For example, in Haiti, SOLUTIONS S.A. and GeoNova are using the AgroTracking platform for farmer group registration and to formalize produce collection points and facilitate transportation between farmer groups and exporters’ packaging plants. The platform’s traceability system enables exporters to meet traceability requirements in US and European export markets.

However, companies should also be aware of a number of challenges. First, smallholder farmers are very risk adverse and may not have access to certain technologies, such as smartphones, or may be digitally illiterate. As a result, technologies should be built with smallholders in mind, packaged to their needs and abilities and paired with in-person contact. Simple SMS platforms or voice messaging services for illiterate farmers can be useful. Second, geodata and ICT platforms advance rapidly, so companies must work hard to stay up to date and modern. Third, the policy and regulatory environment also has a significant impact on using these types of technologies. The personal data gathered by these platforms can be considered sensitive and thus may be regulated by the government. ICTs raise important questions about data ownership and privacy. Finally, many of these new technologies may require significant initial investment and have low early uptake in low-density rural markets. Outside funding or subsidies may be necessary for long-term sustainability.

Geodata and ICT platforms have a huge potential to change agriculture for farmers and for companies. Do you have experience working with geodata and ICT? If yes, tell your story below!

Learn more about how geodata and ICT platforms can help both smallholder farmers and the companies that work with them: ‘Geodata and ICT Solutions for Inclusive Finance and Food Security’ report).

Smallholder farmers represent a huge and largely untapped market segment for agricultural companies. Despite there being 500 million smallholders in the world, most of these farmers lack commercial access to inputs, storage, loans, and other products and services that would increase their productivity and incomes, and build strong agricultural sectors in countries across the world. But smallholder markets are risky to enter, being poorly understood and producing small margins, so even companies that want to expand into these markets are hesitant. Donor funding, such as United States Agency for International Development (USAID) funding through Feed the Future Partnering for Innovation, can help offset the initial risk of entering or expanding in those markets, providing companies with the ability and confidence to invest their own money in new products, services, and strategies in smallholder markets.


Many of Partnering for Innovation’s partnerships help companies implement new distribution and marketing activities targeted at smallholder farmers, unlocking this massive market segment for these companies. Once companies are established in smallholder markets, they serve as a sustainable, long-term presence (unlike most development projects), providing access to agricultural products and services that are essential for smallholders to produce at a commercial level, increasing the amount and quality of food available as well as incomes for farmers and others working in agriculture like input suppliers and aggregators.


With a program investment of $25.8 million, Partnering for Innovation has generated $42.2 in private sector investment through its partnerships. For example, Partnering for Innovation’s $6.4 million investment in commodities trader Export Marketing Company Limited (EMCL) in Mozambique spurred EMCL to invest $13.6 in building 23 new agricultural hubs in underserved rural areas, providing smallholder farmers with access to inputs, mechanization, and storage, and greatly expanding EMCL’s commodities sourcing. With Partnering for Innovation’s support, EMCL is both expanding its business and providing smallholder farmers with the products and services they need to build productive and profitable farms.


Donor funding can be key in enabling companies to expand in emerging and developing markets. By helping offset the risk of entering these market, donors like USAID are spurring sustainable, private sector-led development that puts US taxpayer dollars to good use building markets and increasing incomes across the world.

Although most rural families keep chickens in Ethiopia, the most common breeds are highly susceptible to disease and have low weight gain and egg-laying productivity. Because of low productivity and high demand, farmers have been missing a key opportunity to improve nutrition and generate income. One Ethiopian poultry company, however, is changing that.


EthioChicken is addressing this market gap by commercializing improved chicken breeds and expanding its network of sales agents to reach rural farmers. Agents raise chicks for the first 40 days and receive a commission for each sale thereafter. In addition to training its sales agents and providing last mile access to more productive chickens, the company also expanded its sale of high-quality poultry feed.


In two years, with support from Feed the Future Partnering for Innovation, EthioChicken sold 3,073 MT of feed and more than 3 million day-old chicks, well over its goal of 2.2 million, to almost 350,000 rural households, and employed an agent network of 1,500 entrepreneurs.


A few keys to EthioChicken's success were:

  • Developing a strong training program for its sales agents that included both proper poultry raising strategies and savvy business practices. This program enabled EthioChicken to reduce losses and increase productivity.
  • A strictly for-profit business model that allowed it to effectively attract investors in addition to donors.
  • Working in close partnership with the Ethiopian government and Ministry of Agriculture, which helped EthioChicken market its products to rural customers.
  • Flexibility in its marketing model. In addition to focusing on economic benefits, it advertised the nutritional benefits of poultry, especially for women and children, making chicken more attractive for smallholder consumers.

  In addition, EthioChicken also noted a couple of trends: 

  • It found that smallholder farmers care a lot about value for money, and thus are willing to pay more for a high quality product.
  • Because of the limits of working in a developing country, EthioChicken had to take on more of the value chain operation - producing both chickens and chicken feed - than it might have in a different country. Companies operating in similar circumstances should be prepared to expand operations vertically.


Have you found that these are important factors to consider when working in smallholder markets? What are some of the lessons you've learned for commercializing a new product aimed at smallholder customers?

Andrew Bracken David Ellis Ethio Chicken

Last week, we examined how to read, understand, and respond to funding opportunities. In this final blog post on applying to funding opportunities, we explore how doing research and outreach can help your proposal succeed!

Research and outreach is a critical component of acquiring funding that should be done at every stage of the process. Research and outreach can help you identify future funding opportunities, build relationships with partners and donors, and strengthen your proposal.

While identifying funding opportunities, research your competitors and similar projects to see who they have acquired funding from in the past. Their donors can be potential sources of funding for your organization as well. You should also pay attention to trends in funding, but be careful not to go beyond the scope of your organization. If you notice that donors have a tendency to fund projects focusing on women farmers, than you may want to consider incorporating a stronger gender strategy into your organization in the long term.

Once you have identified a particular funding opportunity, research other successful projects and competitors that the donor has funded. You can even contact these projects or organizations with questions. Use these examples to identify what the strengths and weaknesses of the projects were, what parts of their structure the donor liked, and what the donor’s funding trends are. These insights can make your proposal more appealing to the donor.

You should use outreach to build a relationship with the donor by attending events, question and answer sessions, contacting the donor’s local office, and contacting the point of contact for funding proposals directly with questions. In addition to strengthening the relationship, you may also be able to acquire additional information. This networking should be an ongoing process, not just when a funding opportunity is released.

It is also important to make partnerships with other organizations early. If it is your first time seeking funding, it is especially valuable to make partnerships with organizations that have received funding in the past. For smaller business, these partnerships can also help solve problems of limited scope and capabilities.

Before you write the proposal, take field trips to the target country so you can meet with stakeholders and understand the unique context you will be working in. An important quality that donors look for is that your solution is tailored to meet the specific needs of the country and community you will be working with.

Finally, if you do not win a funding opportunity, you can still contact the donor to ask for connections or technical expertise. In many cases, the donor will refer you to other organizations or have experts on staff that can give you additional support. You should also apply multiple times to the same donor organization!

Now that you’ve finished our series on understanding funding opportunities, you can apply your new skills and find funding on the AgTechXChange!

Last week, we looked at how to identify an appropriate funding opportunity. Now, we will learn how to read, understand, and respond to funding opportunities.

When donors review proposals, the two most important qualities they look for are: compliance, or how well the applicant follows the requirements; and responsiveness, or how well the applicant understands what the donor wants and how to effectively address the problem. Given this, it is critical to understand what all the requirements and details of the funding opportunity are and, in writing the proposal, completely meet them. 

Once you have identified your funding opportunity, the first step is to read the document thoroughly and highlight all of the requirements. Different types of funding opportunities have different documents: grants usually have requests for applications (RFAs), and contracts usually have requests for proposals (RFPs).Their requirements are often indicated by command words, such as “must, will, shall, and should.” In addition to content requirements, make note of any formatting requirements such as font size, length, or margins. Other examples of common requirements include technical specifications, program management qualifications, or commitments from any partners.

Once you have marked all the requirements, the second step is to look through the donor’s scope of work, objectives, and evaluation criteria for the proposal. The evaluation criteria will vary by donor, but scoring is typically done by section and may be numerical (e.g. out of 100) or descriptive (e.g. good or excellent). Use these requirements and the evaluation criteria to build your outline and shape your proposal. Indeed, it is recommended to have your proposal mirror the structure of the evaluation criteria.

The third step is to tackle each section of your proposal in turn. It is helpful to first write the scope of work, which can double as a work plan. In this section, it is important to include your timeframe, staff, scheduling, resources, and objectives. Then, you can build your budget based on your scope of work/work plan.

Be very careful when writing a budget, as you will be stuck with the budget that you propose. If you low-ball or try to tackle too much without accounting for it financially, you could end up in trouble in the long-run. Also keep in mind that donors generally look for the best value proposal, not necessarily the cheapest.

Throughout the proposal writing process, be sure that you are completely following the evaluation criteria and meeting all the requirements. Go through the original document and mark which requirements you have met. Writing proposals is not the time for creativity; if your donor specifically requests size 12 font and one inch margins, then your proposal should be in size 12 font with one inch margins. Make the proposal as clear and easy to follow as possible by using headers, sub headers, and the donor’s language, although also avoid jargon when possible. Finally, be timely, as most donors will not consider an application once the deadline has passed.

Next week, we will be exploring how doing additional research and outreach can boost the strength of your proposal and open up new opportunities.

The first important step in applying for a funding opportunity is to have a strong understanding of your own organization: its capabilities, needs, and long-term objectives. This understanding ensures that the funding opportunity is a good fit and benefits your organization, instead of overwhelming your abilities. Here are three things that are important to know about your organization before you apply for funding:


First, winning a donor’s contract means that you are subject to all the policies, regulations, and requirements of that donor. Especially for large donors like USAID, the requirements and reporting duties of the contract can be very demanding. To manage them, your organization must have its internal infrastructure in place, including robust financial, data collection, and human resource systems. If your organization does not have these capabilities, you will not be able to successfully manage the contract and could burden your business.


For this reason, smaller companies seeking to work in emerging markets should consider applying to grants from family foundations, leveraging connections with wealthy individuals, using online kick starters, or winning a subaward. A multi-million dollar contract with USAID could overwhelm your capacities and cause the contract to be canceled, instead of benefiting your organization. In contrast, family foundations offer a more flexible, manageable source of funding. Often times, they will be more willing to work with you and to tailor their grants to your proposed project. Do not hesitate to reach out to them with a proposal!


Second, ensure that the funding opportunity meets your needs and goals. In general, you want to find a funding opportunity that plays to your organization’s strengths and fits into its scope. The funding should be strategic and help to achieve your future goals. Be careful of chasing funding for the sake of money; doing so could force you to reshape your organization or add unwanted new areas.


For example, if your organization specializes in commercializing a type of fertilizer, then you should find funding opportunities that focus on fertilizer. If there is a funding opportunity that is trying to promote nutrition through improved varieties of potatoes, then that funding opportunity would not be a good fit for your organization. Unless your long term goal is to eventually expand into nutrition, pursuing the funding would force your organization into a mold in which it ultimately would not be successful. 


Finally, it is also important to understand the type of funding opportunity and how it affects your organization. In general, funding opportunities fall into two categories - grants and contracts – with each determining what regulations must be followed and who owns the final project. Grants tend to be the most open and flexible, and the recipient owns the final product. Organizations with a specific project idea in mind should look for grants. In contrast, contracts tend be stricter and have more demanding regulations. The donor owns the final project, and specifies a project they would like to have done through the contract. As a result, larger organizations or organizations seeking to take on new projects should apply to contracts.


Now that we’ve discussed how to identify the appropriate funding opportunity, the next step is to understand the request for proposals itself! Next week, we’ll be exploring how to read and respond to funding opportunities.


Marketing Poultry for Nutrition

Posted by jamieh Jan 23, 2017

In Ethiopia, few families have access to sufficient protein sources. Poultry, an important source of protein and other essential nutrients, is common across the country, but most farmers raise local breeds that do not produce as many eggs or grow as quickly as improved, imported breeds. To address this gap, Ethio Chicken is expanding commercial access to improved poultry breeds through a network of rural sales agents and a multi-pronged marketing campaign that focuses on how eggs and chicken can help improve nutrition.


EthioChicken began operations in Ethiopia in 2010, with the acquisition of a government-run poultry farm. Within several years, the company had become the largest poultry producer in Ethiopia, and through a partnership with Feed the Future Partnering for Innovation, sold more than 3 million improved breed day-old chicks and more than 3,000 MT of high quality feed through a network of 1,000 sales agents.


EthioChicken’s successful entry into the Ethiopian poultry market required hard work, flexibility, and responsiveness to its target customers. EthioChicken initially thought customers would want to purchase chickens for the economic opportunity of egg and meat sales. However, EthioChicken later adopted a multifaceted marketing approach, one that also emphasized the nutritional aspect of its chickens and their eggs. EthioChicken worked with a local marketing firm to develop brochures, banners, billboards, and a radio advertisement, depicting Ethiopian women with chickens and eggs, with messages like, “Chicken meat makes my baby grow up strong!” and “My children’s health improved from eating eggs!” These resonated with families that typically lack quality protein in their diets.


EthioChicken’s multipronged approach to marketing provides important lessons to other companies that wish to expand into emerging markets. Through various marketing channels and the use of several simple and powerful messages, EthioChicken reached a broader group of customers, and gave them multiple reasons to purchase its chickens. By engaging a local marketing firm attuned to the Ethiopian consumer, EthioChicken could focus on its core business, the production of day-old chicks and feed. Perhaps most important of all, EthioChicken recognized that smallholder customers demand high quality products, and will spend their limited resources accordingly.


Learn more from EthioChicken’s CEO, David Ellis, in this interview with Voice of America-Africa.

Private sector companies play a significant role in creating a food system that helps people access nutritious food, yet the connection between nutrition and commercial agriculture is rarely discussed. As sellers of food and the inputs that are used to grow food, companies can have a major impact on the availability and accessibility of nutritious food. It is therefore important for development practitioners working in agriculture, nutrition, and public private partnerships to understand how commercialization and nutrition can intersect, and how incorporating nutrition in public private partnerships can increase nutrition in vulnerable populations.


The attached overview demonstrates the important role the private sector can have in improving nutrition, using several examples from Feed the Future Partnering for Innovation, a USAID program that commercializes agricultural innovations in smallholder farmer markets. From improved poultry breeds to legume inoculants to orange-fleshed sweet potato snacks, Partnering for Innovation's partners are showing that nutrition and commercialization can be a great mix.


What are your experiences incorporating social goals with business goals? Do you consider nutrition when developing new products or marketing strategies? Let us know in the comments section below!

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