For over 30 years, Michael has been involved in sorghum cultivation on a 5-acre land in Talensi, a rural farming community in Northern Region. Michael’s livelihood revolves around finding a good market to sell his commodities right after harvest. Being in the informal sector, Michael has no access to a bank account or any financial footprint and rely on cash based transactions only. He has no financial records so can barely remember how much money he has made over the years. No financial record keeping. If Michael needs a loan from the bank, he will have to provide to the bank a financial trail of earnings, of which he has none. He cannot access loans and other forms of credit facilities and the cycle of poverty continues.
LendIt’s digital payment platform now allows Michael and millions of other smallholder farmers in Ghana receive payments in real time, for commodities sold, via mobile money. By transacting digitally, Michael now has a financial record of which he can use to access financial related services from any financial institution across the country.
Access to inputs such as certified seeds, fertilizers, pesticides, weedicides and other agricultural inputs remain a critical problem for many smallholder farmers in Ghana. Why? Because more than 90% of smallholder farmers are not in the financial position to acquire the much needed agricultural inputs. What happens? Farmers rely on grains from previous farming season to replant, do not apply the right fertilizers and other chemicals and this results in poor yield; threatening food security and financial livelihood of these farmers.
The Input Financing and Microlending service allows Fuseina to apply for input financing through a certified agent at a very low (2% or less) interest rate and pay back after a successful harvest. Fuseina is now assured of a good farming season which translates into better yield and more money to take care of herself and her family.
Awurabena cultivates a 4 acre maize and plantain farm in Kasei, a farming community in Ashanti Region. Every year, she relies on the “mercy of God” to enable her go through a successful farming season. If there’s an outbreak of drought, pest invasion or disease, she has no option than to pray and count her losses. Why? Because she has no form of insurance to protect her crop in bad times.
With LendIt’s crop insurance, Awurabena can now pay an insurance premium as low as $10 that will give her coverage for a year. When bad times come, she no longer has to pray because she’s fully insured.
Pension schemes are non-existent in the informal sector. Many farmers during old age retire from active farming and retire to their various homes; with no hope of getting any financial rewards during these times of rest. They become a burden onto their immediate families. It's a common occurence to see smallholder farmers over 70 years, still in active service, because they know a little rest or slumber and poverty will come knocking. This has adverse effects on productivity and output since many of these farmers are aged and do not have the physical strength needed for cultivation.
LendIt’s Pension Scheme, through its pension underwriters, will allow farmers to lay away some funds on a monthly basis as their pension contributions. Once these farmers attain the age for rest, they are assured that monthly pension benefits will be paid to enable them take care of themselves and their families.