Zamokuhle Thwala quit farming in 2017, frustrated by the lack of financial support and access to market. Yet he has turned this negative experience into something positive for him and other South African farmers.
“I felt that I could only grow crops, but not myself or an agri-business,” he told Disrupt Africa. “I tried to apply for funding with various financial institutions, but had no luck.”
Yet his experiences gave him an idea for a new business, which though it didn’t involve farming himself was directly related.
“When I was still a farmer, I would sometimes lend money from my close friends to purchase agricultural inputs, and pay them later after selling the products to market. This is how the peer-to-peer lending type of crowdfunding concept was conceived,” Thwala said.
From his base in Pietermaritzburg in South Africa’s KwaZulu-Natal (KZN) province, he built AgriCool Finance. Launched in July 2019, the startup empowers smallholder farmers deprived of access to finance by traditional financial institutions by linking them with investors and markets.
“Our platform is a crowdfunding platform that enables ordinary people to invest in agricultural projects and later harvest up to 25 per cent of their contribution as a reward,” said Thwala.
So far, AgriCool has raised more than ZAR1.5 million (US$104,000) in funds for 24 farmers in KZN. It then sells the produce from these farmers to the informal market, saving farmers visits to the Fresh Produce Market, which Thwala said exploits them and charges “exorbitant” prices.
“By eliminating the Fresh Produce Market in the value chain, it means more profit margins for informal traders and this also eradicates unnecessary factors that drive food prices high,” he said.
AgriCool, which is looking to partner with big retailers in order to create new markets for this produce, is currently bootstrapping, with Thwala using a part-time job to part-fund the company. He is looking for funding, however, and would use any investment to expand beyond KZN to other provinces.
The startup takes a percentage of the margin made once produce is sold at market, and Thwala said its main challenge thus far had been convincing participants in its sector that it could add real value.
“It’s always a big challenge entering a virgin and informal market. It’s even more challenging when you introducing technology, as there are still technophobic people,” he said.
Yet Thwala himself knows the value of applying tech to agriculture, and with further application he believes AgriCool can be the solution to a problem he and thousands of other farmers have had to grapple with.