What is the name of your solution?
VunaPay
Provide a one-line summary of your solution.
VunaPay provides instant payments to farmers as they deliver their produce to Agricultural Cooperatives, saving them from late payments.
In what city, town, or region is your solution team headquartered?
Nairobi, KenyaIn what country is your solution team headquartered?
What type of organization is your solution team?
For-profit, including B-Corp or similar models
Film your elevator pitch.
What specific problem are you solving?
Agriculture in Africa accounts for ~30% of the GDP. 80% of agriculture in Africa is under smallholder farms. However, according to the UNEP and IFAD, 1 billion of the world's poorest 1.4 Billion people that live on $1.25 a day are actually smallholder farmers. We dug into this and discovered that although 50% of smallholder farmers are registered in Agricultural Cooperatives, more than half of them sell to middlemen at 40-80% below market value. They do this because middlemen pay instantly, as opposed to their Cooperatives societies who pay them 3 to 6 months after delivering their produce. We are therefore solving the problem of delayed payments to these smallholder farmers selling through cooperatives and other farmer collectives.
What is your solution?
VunaPay facilitates instant payment to smallholder farmers for produce delivered to the Agricultural Cooperative or other farmer collective. We work through agricultural cooperatives by offering them an end-to-end produce and farm inputs management solution. When farmers drop off produce at the cooperative, our system instantly calculates their qualified payout amount, less any credit extended. We onboard financial partners who then disburse the payout instantly through our platform, which is repaid by the cooperative once they sell the collected produce. We collect our fee at this stage. We do not provide loans per se, but accelerate payment for produce already delivered.
Who does your solution serve, and in what ways will the solution impact their lives?
As of the current stage of development, VunaPay primarily benefits smallholder farmers within agricultural cooperatives in the operational geographies. The platform aims to empower these farmers by addressing delayed payment challenges and improving transparency in agricultural transactions. This delayed payment creates a severe cash crunch, forcing these farmers to seek immediate financial solutions to cover daily expenses such as food for their families and tuition for their children. The consequences are dire, leading farmers to resort to borrowing money from neighbors and predatory mobile lending apps at exorbitant daily interest rates of around 5%, resulting in a staggering 150% interest rate per month. Alternatively, faced with urgent financial needs, farmers often opt to sell their produce at a meager 20% of the market value, substantially diminishing their potential income. In both scenarios, the farmers experience significant financial losses, emphasizing the urgent need for a solution that provides swift and fair compensation for their hard work and produce.
VunaPay's intervention, offering instant payouts through its cooperative management tool, directly tackles this challenge by breaking the cycle of delayed payments, empowering farmers to cover their immediate expenses without resorting to exploitative borrowing or selling their produce at unreasonably low prices. This not only mitigates the cash crunch but also enhances the economic well-being of smallholder farmers, aligning with the broader goal of fostering equitable access and financial inclusivity in the agricultural sector.
How are you and your team well-positioned to deliver this solution?
Our team at VunaPay is exceptionally well-suited to deliver tailored solutions to smallholder farmers, combining deep personal connections with the farming community and extensive professional expertise.
Our CEO, Judy Njogu-Mokaya, brings a multifaceted background to our mission, combining 5 years of innovation and product management experience at Safaricom with another 5 years in SaaS sales leadership across Africa at Oracle. Beyond her impressive corporate achievements, Judy co-founded a startup with annual revenues exceeding $3 million. More importantly, she grew up in a farming family, providing her with intimate knowledge of the challenges and needs within this community. This personal connection drives her commitment to ensure our solutions are genuinely beneficial and grounded in the real-world experiences of farmers.
Koya Matsuno, our COO, has over 9 years of financial expertise, including a role in investment banking at JP Morgan and as a product manager at Cookpad, a food tech company. He has also established a crowdlending platform in Kenya. Koya’s diverse experience is crucial in understanding and tackling the financial challenges faced by smallholder farmers. His direct work in establishing community banks in regions such as Ghana, Honduras, and Panama, and his initiatives to finance off-grid solar panels, showcase his proactive approach in creating impactful, sustainable financial solutions for these communities.
Our CTO, Ian Wambai, complements the team with a strong technical foundation, having a decade of experience in software development specializing in AI technology. Ian's portfolio includes working on agricultural projects with Heifer International, where he developed technology solutions specifically designed to meet the technical literacy levels of farmers. His expertise ensures that our digital tools are both innovative and accessible, enhancing daily operations and overall productivity for farmers.
Together, our team's unique blend of advanced technical skills, financial acumen, and deep-rooted connections to the agricultural sector enables us to design and implement solutions that are truly informed by and tailored to the needs of the communities we serve. By integrating continuous feedback from these communities into our development process, VunaPay ensures that our solutions are not only effective but also embraced by those they are intended to help. This community-focused approach is central to our mission, fostering trust and ensuring broad adoption of our innovations.
Which dimension of the Challenge does your solution most closely address?
Foster financial and digital inclusion by supporting access to credit, digital identity tools, and insurance while securing privacy and personal data.Which of the UN Sustainable Development Goals does your solution address?
What is your solution’s stage of development?
GrowthWhy are you applying to Solve?
Applying to Solve signifies a strategic move for VunaPay as we navigate the multifaceted challenges inherent in our mission to scale and extend our impact among smallholder farmers. One of our foremost challenges lies in securing affordable debt capital and grants, crucial for offering our instant payment services at rates that remain accessible to our target users. Moreover, substantial funding is required to scale our product and broaden our operational reach, ensuring that we can effectively serve more agricultural communities. In this regard, Solve's network of investors and philanthropic organisations represents a valuable resource that can facilitate sustainable growth while enabling us to uphold our commitment to affordable service fees for our users.
On the technical front, our efforts to digitise agricultural cooperatives are impeded by a lack of essential devices and unreliable access to electricity and internet connectivity, particularly in rural areas. Collaborating with technology providers within Solve's network, who possess expertise in deploying tech solutions in challenging environments, holds promise in overcoming these infrastructural barriers. Such partnerships will play a pivotal role in enhancing our service delivery and operational efficiency, ultimately improving our ability to meet the needs of our users effectively.
Navigating the dynamic regulatory landscape of the agricultural sector poses another significant challenge. Access to legal expertise through Solve would enable us to adapt to regulatory changes more effectively, ensuring ongoing compliance across different regions. Additionally, simplifying our legal contracts to enhance clarity and accessibility for our clients is paramount, and guidance from Solve's legal experts can aid in structuring these documents appropriately.
Furthermore, building trust with cooperatives and farmers is fundamental to our success. This entails providing financial training to elucidate the advantages of our instant payment services over traditional high-interest loans. Solve's capacity to connect us with local experts and advisors will be instrumental in tailoring our approach to meet cultural expectations and penetrate the market effectively.
In leveraging the support of Solve, VunaPay aims to address these barriers comprehensively, enhancing our scalability, sustainability, and overall impact. Through strategic collaboration and access to Solve's diverse network, we are poised to overcome these challenges and realise our vision of empowering smallholder farmers through innovative financial solutions.
In which of the following areas do you most need partners or support?
Who is the Team Lead for your solution?
Judy Njogu
What makes your solution innovative?
VunaPay stands out in its innovative approach to addressing the delayed payment challenges encountered by smallholder farmers within African agricultural cooperatives. Unlike traditional methods, our platform offers a comprehensive solution that encompasses member management, inventory tracking, produce monitoring, and streamlined payout disbursements. However, what truly sets VunaPay apart is its pioneering focus on efficient record-keeping through cooperative digitization, enabling real-time data collection.
This digital foundation is the cornerstone of VunaPay's innovation, as it allows us to calculate instant payment amounts for farmers promptly. By leveraging real-time data, we offer a transparent transaction fee model, ensuring that farmers are aware of the costs involved upfront. Unlike conventional systems that may incur hidden fees or repayment complexities, VunaPay simplifies the process by charging farmers a one-time fee for instant access to their funds.
Furthermore, VunaPay's approach extends beyond providing immediate financial relief to farmers. By collecting fees directly from cooperatives upon market payments, we streamline financial processes and promote transparency throughout the value chain. This not only addresses the immediate issue of delayed payments but also enhances operational efficiency and fosters trust among stakeholders.
The innovative integration of cooperative digitization, real-time payment calculations, and transparent fee structures has the potential to catalyze broader positive impacts within the agricultural finance space. By demonstrating the viability and effectiveness of our solution, we can inspire other players in the industry to adopt similar approaches, leading to greater transparency, efficiency, and empowerment for smallholder farmers across Africa.
Ultimately, VunaPay's innovative solution has the power to transform the market landscape by revolutionizing how financial services are delivered to agricultural cooperatives. By providing farmers with timely access to their earnings and promoting transparency and efficiency throughout the value chain, we are not only empowering individual farmers but also driving broader economic growth and sustainability within rural communities.
Describe in simple terms how and why you expect your solution to have an impact on the problem.
VunaPay's theory of change revolves around its digital platform's ability to streamline cooperative operations, provide instant payments to farmers, and ultimately improve their livelihoods. The core activities of onboarding agricultural cooperatives onto the digital platform and providing instant payments for produce delivery enable financial flexibility among smallholders and enhance the effectiveness of cooperatives as produce aggregators, serving as immediate outputs of our intervention.
Immediate outputs, measured by, for instance, the number of cooperatives onboarded and the percentage of farmers accessing instant payment offerings, directly contribute to our intended short-term outcomes. These outcomes include increased farmer incomes through smaller payment reconciliation times and reduced reliance on predatory credit options, as well as increased operational capacity of collectives The metrics used to measure these outcomes, such as changes in farmer income and cooperative revenue, are directly influenced by the aforementioned outputs of VunaPay's activities.
In the medium to long term, VunaPay expects to see broader positive impacts on the target population. These include improvements in household livelihoods, food and financial security, and access to health and education. Such outcomes are expected to result from the cumulative effects of increased financial flexibility, improved cooperative operations, and strengthened agricultural communities facilitated by VunaPay's digital platform.
This theory of change is supported by evidence gathered through routine management systems, surveys, and interviews with farmers and cooperative staff members. By linking specific activities to immediate outputs, short-term outcomes, and longer-term impacts, VunaPay's theory of change provides a framework for understanding how its intervention can lead to positive changes in the lives of smallholder farmers in Africa.
What are your impact goals for your solution and how are you measuring your progress towards them?
Our impact goal is to empower Africa's agricultural sector by providing efficient financial tech management solutions to farmer collectives, resulting in transparent and timely payouts to farmers. To measure our progress towards this goal, we track several key indicators, disaggregated by gender and youth where relevant, to strengthen our impact positioning and address gender disparities among smallholders, as well as to make farming and agriculture more attractive to youth.
Number of smallholder farmers registered on VunaPay: This indicator reflects the breadth of our impact, demonstrating the reach of our platform among smallholder farmers across Africa.
Number of cooperatives on VunaPay: Similarly, tracking the number of cooperatives using VunaPay provides insight into our platform's adoption and penetration within agricultural communities.
Number of clerks using VunaPay platform: This indicates the extent to which cooperative operations have been digitized, enabling more efficient management and transparent transactions.
Number of smallholders accessing instant payment solution: This output metric measures the immediate impact of our solution on farmers' ability to receive timely payouts, improving their financial flexibility and stability, particularly among women and youth farmers.
Volume of capital deployed to smallholders: This depth metric assesses the magnitude of financial resources facilitated by VunaPay, directly contributing to smallholders' income generation and economic empowerment, with attention to gender and youth disaggregation.
In addition to these activity and output metrics, we also track the following impact metrics on a quarterly basis:
Number of new sign-ups at cooperatives: This measures the additionality of our intervention, indicating the extent to which VunaPay encourages new participation and engagement among smallholder farmers and cooperatives, particularly focusing on gender and youth inclusion.
Percentage growth in income for smallholders: This short-term outcome metric assesses the immediate impact of VunaPay on farmers' income levels, demonstrating the effectiveness of our solution in improving livelihoods and economic well-being, with disaggregation by gender and age.
Furthermore, in the long term, to understand the contribution of VunaPay to farmer livelihoods, we plan to design an in-depth impact validation study. By regularly monitoring these indicators, we can evaluate our progress towards our impact goal, address disparities, and make data-driven decisions to optimise our interventions, ensuring a positive impact on Africa's agricultural sector.
Describe the core technology that powers your solution.
Our solution is powered by a robust technology stack designed to address the needs of our users while prioritizing simplicity, efficiency, and security. At the core of our platform is Firebase, a powerful backend service that facilitates real-time data processing and storage. With Firebase, we can provide instantaneous updates and insights to our users, enhancing their experience and enabling informed decision-making. Additionally, we utilize Flutter for our front-end user interface, leveraging its cross-platform framework to ensure a seamless and consistent experience across devices and platforms. This combination of Firebase and Flutter allows us to create a reliable and scalable platform that meets the evolving demands of our customers while maintaining stringent security measures to protect sensitive data and transactions.
In addition to our robust technology stack, our solution incorporates several innovative features to address specific challenges faced by smallholder farmers. We have implemented an SMS receipt system to notify farmers promptly about the delivery of their produce, increasing transparency in transactions and ensuring real-time updates for farmers without access to smartphones or internet connectivity.
Furthermore, our platform integrates AI technology to differentiate the quality of produce deliveries, enabling fair compensation for farmers with high-quality goods. Through machine learning algorithms, we assess various parameters to accurately evaluate produce quality, incentivizing farmers to maintain high standards in their agricultural practices.
Additionally, we have included a geomapping feature that utilizes GPS technology to assist farmers in complying with EU Deforestation regulations and accessing markets in Europe for export produce such as coffee. This feature enables farmers to map their land and monitor land-use practices, ensuring regulatory compliance and enhancing market access for their produce.
These integrated features not only enhance the functionality of our platform but also empower smallholder farmers to thrive in the global marketplace while promoting sustainable agricultural practices.
Which of the following categories best describes your solution?
A new application of an existing technology
Please select the technologies currently used in your solution:
If your solution has a website or an app, provide the links here:
https://www.vunapay.com/
In which countries do you currently operate?
How many people work on your solution team?
5 full-time staff, 2 part-time staff
How long have you been working on your solution?
About 1 year, since May 2023
Tell us about how you ensure that your team is diverse, minimizes barriers to opportunity for staff, and provides a welcoming and inclusive environment for all team members.
VunaPay prioritizes diversity, equity, and inclusion within our organizational structure and culture. Led by our female CEO, Judy Njogu-Mokaya, we demonstrate our commitment to gender diversity at the highest leadership level. Moreover, we recognize the importance of youth employment in the agricultural sector and actively provide opportunities for younger individuals to contribute to our mission, fostering age diversity within our team. In addition to gender and age diversity, we are dedicated to creating a welcoming and inclusive environment for all team members. We have implemented policies and initiatives aimed at minimizing barriers to opportunity for staff from diverse backgrounds. These efforts include recruiting practices that attract a diverse pool of candidates, employee benefits to minimise gender inequilities, open communication channels for feedback, and continuous evaluation and improvement of our diversity initiatives. Overall, VunaPay is committed to fostering a diverse, equitable, and inclusive workplace where all team members feel valued, respected, and supported. We believe that diversity is a source of strength and innovation, and we are dedicated to creating an environment where everyone has the opportunity to thrive and contribute to our collective success.
What is your business model?
VunaPay's business model centres on providing instant payout services to smallholder farmers, constituting our primary revenue stream. Unlike traditional loans, we generate revenue through transparent transaction fees with fixed rates, ensuring farmers are aware of exact deductions when accessing instant payouts and eliminating unexpected interest expenses. Additionally, we earn revenue by facilitating regular payments made by cooperatives to their farmers, charging them an affordable transaction fee for our streamlined payment process.
Looking forward, we aim to diversify our revenue streams through several avenues. This includes leveraging field data for carbon credit sales, optimizing farm input product sales with real-time sales data, assisting cooperatives in attaining EU deforestation regulation certification through our geo-mapping feature, and developing an AI advisory tool using our unique dataset collected from cooperatives in real-time. These opportunities align with our mission of empowering smallholder farmers, promoting sustainable agricultural practices, and driving growth for our business.
Do you primarily provide products or services directly to individuals, to other organizations, or to the government?
Organizations (B2B)What is your plan for becoming financially sustainable, and what evidence can you provide that this plan has been successful so far?
VunaPay's strategy for financial sustainability is multifaceted, incorporating diverse revenue streams and strategic partnerships. We have successfully implemented several funding strategies to support our work. Firstly, we've partnered with two venture capital funds, one locally based in Nairobi and another global impact fund based in Japan. These partnerships have provided both equity and debt financing to test and scale our core business, enabling us to expand our operations and reach more smallholder farmers.
Additionally, we've secured grant funding from organizations like Heifer International to pilot our business model with select cooperatives. This grant support has allowed us to validate our approach and demonstrate impact, paving the way for future growth and investment. Moreover, our instant payout service has begun generating revenue and gaining traction among cooperatives and farmers. As we scale this business model to more cooperatives and farmers, we anticipate further revenue growth, contributing to our financial sustainability.
In line with our long-term strategy, we are also diversifying our revenue streams. This includes developing additional revenue streams such as financing products for farmers, insurance facilitation, and data analytics services for cooperatives. Diversifying our revenue sources ensures resilience and long-term sustainability for our business. By leveraging a mix of funding sources and continually innovating our revenue streams, we are confident in our ability to achieve financial sustainability while maximizing impact for smallholder farmers and agricultural communities.
Solution Team
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KM
Koya Matsuno Co-Founder, VunaPay
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Our Organization
VunaPay Solutions Limited