From Hype to Harvest: Exploring the potential of digital solutions for agricultural finance in East and Southern Africa

The Smallholder and Agri-SME Finance and Investment Network (SAFIN), the International Fund for Agricultural Development (IFAD) and Palladium, jointly conducted a landscape assessment of agritech and fintech providers that influence access to finance in East and Southern Africa.  


The explosion of agritech and fintech solutions in Africa comes with the promise of contributing to economic advancement across various sectors, including agriculture. Over recent years, there has been a shift from government-led in person service provision to new digital platforms offering ways to reach people even in the most remote locations. A wide range of services is now available to small-scale farmers and agricultural enterprises, including digital marketplaces, input supply, climate and agronomic information, investment platforms, e-payments and mobile money. Although new solutions continue to enter the market each year, there is limited evidence about their ability to become commercially viable and achieve significant scale. In fact, many digital innovators in the sector rely on concessional funding to spur their growth. 

©IFAD/ Bernard Kalu.  Lami Mohammed uses the Innovative Smart Climate Reader to advise farmers about the weather.


SAFIN joined forces with IFAD and Palladium to assess the universe of tech providers in East and Southern Africa, aiming to identify the key drivers and business models of digital innovations that have achieved commercial viability and scale. The study also sought to understand the role of concessional capital in the growth trajectory of tech providers in the region.  

Five key points emerged from the landscaping exercise:  

1. Access to suitable capital is a crucial growth driver

 Agritech and fintech solutions require working capital for input purchases and on-lending to client farmers or businesses, while they use growth capital for market expansion or product improvements. Since investors often view agriculture-focused digital solutions as risky investments, deploying targeted concessional capital can help innovators meet their financing needs by mitigating risks and incentivizing financial institutions to embrace digital innovations and finance the sector.  

2. Bundled services are becoming a necessity for digital innovators to achieve scale

By offering a broad range of farmer-centric services that address agricultural and financial needs, tech providers can enhance their competitiveness, better serve their clients, reduce business model risks and achieve commercial viability. The growing volume of funding provided for such bundled solutions, primarily in the form of equity investments, shows that they present a considerable investment opportunity in this sector. 

3. Digital solutions cannot scale without the appropriate digital and physical infrastructure

Companies operating in countries with robust local infrastructure and technology penetration, such as Kenya and South Africa, are more likely to achieve scale. Furthermore, creating centralized databases, incentivizing data sharing, and implementing mechanisms for data collaboration can attract increased investment and support the growth of tech providers. 

4. Low awareness and adoption of climate adaptation solutions is a key challenge

 Only one-third of the tech companies in the assessment had developed climate change adaptation (CCA) offerings as part of their services. Despite the growing need for adaptation services to build resilience among small-scale farmers and agricultural SMEs, the lack of education and training in the sector is a critical barrier to increased adoption of CCA platforms and sustainable practices.  

5. Other factors influence the commercial viability and scalability of tech providers

These include access to a large addressable market, favourable unit economics, the ability to adapt to external shocks, replicability in new markets, and the ability to unlock finance for customers. 

Findings from the landscape report will shed light on the range of agritech and fintech solutions available in East and Southern Africa. Additionally, it will help guide potential funders in their investment decision processes to support scalable solutions, whether through the disbursement of debt, equity or concessional capital. SAFIN will collaborate with its members to build on these findings and develop concrete solutions to promote investment in scalable digital solutions that increase resilience and access to finance for agricultural SMEs.   

Read the report