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Partnership with Provati Insurance Company Ltd.
A Memorandum of Understanding (MoU) was signed between iFarmer and Provati Insurance Company Ltd. on Wednesday, September 16, 2020.
To ensure a smooth production process and provide maximum support to the farmers Provati Insurance Company Ltd. joined hands with iFarmer. Farmers are constantly facing various problems in getting their hands on various agricultural equipment and production materials and in supplying their produce. iFarmer and Prabhati Insurance Company Ltd. have shook hands to work together to solve this problem.
iFarmer is a technology company based in Bangladesh that helps small-scale farmers maximize their profits. iFarmer bundles financing with farm inputs, farm advisory, insurance, and market access for the smallholder farmers. The financing is facilitated as farm investment from individuals and institutions who earn a profitable return, while iFarmer ensures quality inputs, advisory services using IoT and remote sensing, and helps the farmers to sell their produce directly to institutional buyers without having to deal with multiple middlemen.
The country's farm sector is dominated by smallholders. Lack of formal identification, collateral, and credit histories; difficulties in contract enforcement; and the high cost of serving geographically dispersed smallholder farmers are just a few of the many obstacles standing between smallholders and formal financial inclusion. The inability to access formal financial services affects the efficient functioning of agricultural value chains because farmers may be unable to maximize their yields and buyers may struggle to ensure an adequate supply and ensured quality of agricultural commodities.
More than 70% of rural households in Bangladesh are engaged in livestock-related production and businesses through which smallholders and many landless households earn a livelihood.
Most of the farmers in Bangladesh have little or no access to formal credit, limiting their capacity to invest in technologies and inputs which include livestock farmers. The traditional microfinance support faces a number of challenges, including high interest rates, overlapping loans, insufficient repayment periods, and lack of support services such as advisory and access to appropriate markets.
Formal financial institutions show little interest in financing small farmers because of higher operational costs in rural areas compared to urban areas, and the risks such as untimely repayment of loans by farmers.
Founded in 2018, iFarmer is a technology company that helps small; marginal farmers get the assistance they need for agricultural equipment, consulting services and sell their products at a fair price. iFarmer provides a variety of services for farmers, including financing, agricultural equipment, insurance, consulting services and market access. To date, microfinance financing services have relied on human-driven processes. These processes are costly and slow to expand. iFarmer digitizes and simplifies these processes to help keep the entire agricultural system smoother.
iFarmer connects individuals and institutions with farmers through a sponsorship package to fund farming and agriculture for a share of the returns.It provides easy access to capital for underprivileged farmers by connecting them with potential farm sponsors. Farm Sponsors select the kind of farms they want to sponsor via iFarmer website, and then release the funds to iFarmer to set it up.
iFarmer uses a combination of human agents (iFarmer field agents and agriculture input retailers) , mobile technology and remote sensing and IoT to reduce the cost and complexity of working with smallholder farmers.
iFarmer uses a data driven approach to aggregate farmers produce and then connect them directly to buyers like exporters, wholesale markets, modern trade, thus by passing the middlemen and channeling more income for the farmers and ensuring return for the farm sponsors. In addition to that iFarmer is also working with insurance companies, govt departments and quality agriculture input companies to ensure important services to the farmers.
The initiative is very good as no other NGO gives us loans for rearing cattle on a small scale. And this is also interest free; said Nazmul Haque, a farmer in Kurigram, who has been rearing 18 cattles for the last two months.
iFarmer is now working in Kurigram, Lalmonirhat, Nilphamari, Pabna. They are planning to expand their operation to Jessore soon. The organisation currently works with more than 5,000 farmers who farm various cattles, fishes, vegetables, fruits etc..
Now, iFarmer is aiming to become a platform for agriculture value chain financing, where on one side farmers will be able to create a profile, get credit and performance ratings and on the other side individual sponsors and financial organisations can invest and earn a healthy return.
What makes iFarmer different is that it turns a complex problem into a digital marketplace. They are taking care of access to capital for farmers, training them on smart agricultural practices and providing the market for farmers. In doing so, they intend to create an alternative source of capital for farmers and create an efficient and inclusive supply chain of selected agricultural commodities.
They won the “Startup with the Most Social Impact” award from the Swiss Embassy in Bangladesh in 2018. iFarmer was also one of the top five businesses at the UNDP Youth COLab, a finalist of Echoing Green Social Impact Business 2019, and a winner of UNCDFs Fintech Innovation Fund for Women MSMEs 2019.
iFarmer has been incubated by Toru and has partnerships with Start-up Bangladesh and CARE International.