Farm working capital without the cost and risk

Congratulations! This Entry has been selected as a semifinalist.

Farm working capital without the cost and risk

Utrecht, NetherlandsIndonesia
Organization type: 
Project Stage:
$10,000 - $50,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

We help SME get better access to finance using the supply chain

About Project

Problem: What problem is this project trying to address?

Micro farmers need working capital to finance seeds, fertilizers and land preparation but do not have the funding. Micro farmers are informal and as such difficulty to access finance. Micro farmers only sell to limited buyers due to credit concerns with clients.

Solution: What is the proposed solution? Please be specific!

We have developed a mobile farmer working capital solution integrated into the TREFI platform (see The solution provides financing for - purchases to improve productivity of the land - the farmers invoices - the invoices up the chain without the risk and cost. The credit risk is avoided by - Synergies with the farmers supplier<b><i>s</i></b> to have better information and control on the farmers - Ability to use the farmers sales to pay for purchases - Approval of invoices by buyers through the mobile phone network The security risk is avoided by - Reducing the need for farmers to hold cash The cost is avoided by synergies with the supply chain.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

The system works as follows: <i>At the start of the cycle</i> - Fertilizers, seeds, land preparation etc are invoiced to farmer by supplier connected to TREFI platform at the duration of the growing cycle <i>During harvest</i> - Buyer visits farm to buy harvest or farmer takes his product to sell in the market - At transfer of the product the farmer sends SMS to system with following content - id number buyer, amount, product code - Buyer instantaneously receives SMS with request to approve invoice - Replies to SMS with OK - If OK is received - System generates tax compliant confirmed invoice to buyer, accessible through web - System pays the farmer the invoice in his account (net of VAT) - if applicable system uses funds received to pay farmers suppliers - System pays VAT to authorities - Collection companies work on the platform to collect funds from the Buyers - System prepares accounting report for farmer The same process is applicable for the buyer. The buyer may finance his invoices to supermarkets etc. The key advantages of this process are: - Farmer can receive suitable finance from suppliers, enabling to increase productivity of his land - Farmer and Buyer do not need to hold cash, improved security - Farmer operates (partly) formal (while he only needs to be able to send an SMS) - Farmer can sell to more Buyers as trust is brought to farmer by system for other buyers - Farmer gets better credit standing at Micro Bank through the availability of credit history

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

Peers are Micro Finance institutions and suppliers to farms. Competition may come from a technology provider that combines: - Strong development skills - Risk technology - Structured finance technology - Collection tools

Founding Story

Formalisation should happen without the micro entrepreneur knowing he is formal.
About You
Capital Tool Company
About You
First Name


Last Name


About Your Organization
Organization Name

Capital Tool Company

Organization Country

, UT, Utrecht

Country where this project is creating social impact

, BA

How long has your organization been operating?

More than 5 years

Has the organization received awards or honors? Please tell us about them

Winner G20 SME finance challenge

How long have you been in operation?

Operating for less than a year

Which of the following best describes the barrier(s) your innovation addresses? Choose up to two

Access, Cost, Transparency, Quality.

Social Impact
Please describe the goal of your initiative; outline what you are trying to achieve

Increased productivity of farms
Improved sales prices of products
Safety for farmers

Which barrier(s) to financial inclusion does your solution seek to address? (select all applicable)

Physical and other accessibility obstacles that prevent communities from reaching financial services, The lack of affordable financial products tailored to the needs of underserved and excluded communities,, Other (Please describe below).

If you selected 'other' above, please specify which other barriers to financial inclusion you solution seeks to address:

Lack of ability in farmers to formalize

For which underserved or excluded communities will your solution create access to valuable, affordable, secure and comprehensive financial services?

Micro farmers in Peru, Indonesia

Could your solution work in other geographies or regions? If so, where?

Yes. All emerging markets with mobile phone infrastructure, collection companies and appropriate legal framework.

If your solution is dramatically successful, how will things be different in 10 years?

Micro farmer land return rate up 300% and gross income of the farms up 500% due to better pricing on their sales.

What will have had to have changed to make this happen?

Funding available on the platform to use to finance invoices to and from farmers and funds to implement the solution.

What has been the impact of your solution to date?

The solution is in development.

What is your projected impact over the next five years?

At least 50,000 farmers with improved access to finance.

What barriers might hinder the success of your project? How do you plan to overcome them?

Barrier => solution
Ability to create confirmed invoices over the SMS network => work in jurisdictions that allow this
Need to set-up farmers on the platform needs farmer to visit branch or representative to visit farm => work in collaboration with microfinance institutions
Lack of mobile phone connectivity in rural areas => work in places with mobile phone coverage

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact

Pilot with a number of farmers

Identify three major tasks you will have to complete to reach your six-month milestone
Task 1

Identify pilot farmers

Task 2

Finalise system

Task 3

Identify pilot suppliers

Now think bigger! Identify your 12-month impact milestone

1000 farmers connected

Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1

Collaboration with micro finance institution

Task 2

Funding for financing the farmers

Task 3

Project funding

Tell us about your partnerships

World Bank collaboration to ensure local government approval and participation

Are you currently targeting other specific populations, locations, or markets for your innovation? If so, where and why?

We are interested in farmer communities / farmers micro banks to join the pilot.

What type of operating environment and internal organizational factors make your innovation successful?

The operating environment preferably has
- strong mobile phone infrastructure
- ability to create a confirmed invoice through SMS
- mobile payments available
- partner micro bank focusing on micro farmers

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list

We invite micro finance institution to participate