Kenyan fintech FarmDrive has gotten a new round of investment from Engineers Without Borders Canada (EWB Canada); coming after a $50,000 investment it received from EWB Canada and others in 2016 and an undisclosed investment by Safaricom’s Spark Venture Fund in 2017.
The announcement was made in a statement by EWB Canada late last month. AK Impact Investors, 1 to 4, the ADAP Seed Fund 2, Sunu Capital and The Lakes Charitable Foundation also participated in the new round.
While EWB Canada did not disclose the size of the latest investment in FarmDrive, the startup’s co-founder Peris Bosire told Ventureburn in an email today (4 February) that FarmDrive had raised “$500 000 in convertible notes from investors so far”.
EWB Canada said the startup — founded by Bosire and Rita Kimani in 2014 — is positioned to reach three million smallholder farmers in Kenya in the next five years.
The startup aim to deliver productive digital loans and lay away savings products to smallholder farmers and EWB Canada said the investment will allow the startup to scale to $13 million of loan originations this year
using, RiPe, a customisable lending engine.
RiPE will allow lenders to plug in and access low-cost loan origination channels such as USSD, credit scoring, identity verification and a portfolio management suite that includes recovery and collections, payments, customer support and advanced real time data analytics, it said.
Using a combination of agriculturally relevant data, Know Your Customer data, and advanced behavioural analytics, FarmDrive has developed a proprietary lending engine to extend loans to these farmers.
EWB Canada’s acting director of investments Elena Haba said the startup has the potential to fill the credit gap between creditors and underserved small business owners like smallholder farmers.
“We believe that addressing this credit accessibility issue is a seminal first step towards building more inclusive and sustainable economies.”
EWB Canada said the startup has built credit histories for smallholder farmers who didn’t have financial identities before, and has approved input loans to more than 53 000 farmers since 2014, from as little as $5 to $500.
FarmDrive’s Bosire said the startup intends to create shared value by increasing agriculture portfolios in Africa from its current four percent of total lending to 25% and onwards.
Said Bosire: “We are going where banks haven’t reached and are creating a trust ecosystem in the most unstructured sector in sub Saharan Africa – Agriculture”.