It quickly becomes evident when talking to Ad Rietberg, founder of fintech firm Agri-Wallet, that he has a real drive to encourage more sustainable and environmentally friendly behaviour in farming and agriculture.

He expects his passion for sustainability to be reflected throughout his company – a start-up that uses mobile technology to improve access to affordable financing for small farmers in Kenya, Tanzania and Rwanda.

“I really want people on my team who believe in climate resilience and sustainable food production and are aligned with what we are doing as a company,” he tells SCF Briefing.

“[Agri-Wallet] must make a positive impact in the food and agri-industry. Having people that come in with that drive is super important,” he explains.

He set up Agri-Wallet in 2017 with the assistance of Rabobank and its partner banks in Africa. It now comprises an office of 25 people in Nairobi and a five-person team in Amsterdam.

The emergence of Agri-Wallet has come as the global conversation and political dialogue around the environment are becoming more prevalent and increasingly urgent.

“Now at parties we are talking about this, how we may need a different method of food production, how we need to stop deforestation or eat less meat. There is more interest in vegetarian diets and discussions about the greenhouse gases released in food production. These are big topics and we are in a period of transition that will change much more rapidly than people expect,” he says.

Rietberg hopes that Agri-Wallet could be part of the change, helping combat unsustainable practices in agriculture as well as increasing the resilience of small farmers to cope with the impact of climate change. Severe droughts, forest fires or flooding are just some of the immense challenges facing today’s smallholder farms.

Banking the unbanked

Agri-Wallet was born out of Rietberg’s professional background in IT and his experience in developing financial services for banking and insurance companies.

He found himself working with Vodafone in Kenya developing a mobile money-based product for healthcare. In 2007 Vodafone had set up the now widely used ‘M-Pesa’ mobile money service which provides financial services such as the ability to pay bills or receive salaries to people with limited access to bank accounts. This additional healthcare-related mobile ‘wallet’ provided a means of paying for doctors and medical costs.

Before the introduction of Vodafone’s M-Pesa, many people in Kenya were unbanked, with those working in cities unable to send money to their families in rural areas. Without a bank account, people often resorted to giving envelopes of money to bus drivers on their way to their home villages in the countryside, and predictably this was not always a safe way to transfer money, Rietberg explains.

Agri-Wallet is born 

Following the rapid take-up of M-Pesa – which according to Vodafone carried out 11 billion transactions across 37 million active customers in its fiscal year 2019 – Rietberg wondered whether the same format could be applied to the agricultural sector.

“I was so fascinated by how this grew so quickly,” he says.

“In agriculture, we saw a big need. Only 5 per cent of smallholder farmers had access to easy and affordable financing. You often need the money upfront to pay for fertilisers – for instance – and then wait six or seven months to grow and sell your produce,” he says.

Most farmers can’t afford funding to pay for those agricultural inputs – or at least not the more effective high-grade products – which results in yields from farms often being only 10 or 20 per cent of those in Europe, Rietberg says.

A mobile money solution would help meet this demand for financing, he explains, with his ideas attracting the interest of Mastercard, which provided $1 million of funding to kickstart the launch of what became Agri-Wallet.

The main hurdle for Agri-Wallet to overcome was to de-risk the financing of small farmers. Most banks refused to lend to them, arguing they were highly risky and would often use any loans provided for other purposes rather than to invest in the business via the purchase of fertilizers or seeds.

“If loans are used for consumption, you create debt,” Rietberg explains, “But if it is used for the farm, you create income generation,” he says.

To overcome this issue, Agri-Wallet looked to blockchain technology and uses the M-Pesa or digital tokens which act as a form of cryptocurrency that only has value within this agricultural supply chain and can solely be used for farm-related purchases.

The use of these tokens avoids the diversion of funds and reduces risk for banks participating in the programme. Farmers can now receive funding in the form of a digital currency to buy seeds, fertilizer or other inputs needed to grow their next crop. Having the necessary funds to buy higher quality inputs can help farmers grow higher quality crops with better yields.

The continued success of Agri-Wallet is reliant on forming close partnerships with large corporations such as Unilever – so-called “anchors” within an agricultural supply chain – that buy produce from the small farmers, says Rietberg. By doing this, Agri-Wallet can effectively identify which parts of the supply chain are underfunded, whether that be the small tea producer, coffee farmer or vegetable supplier.

The fintech also works with “anchor” companies at the other end of the supply chain – those firms that sell essential items such as fertiliser, seeds or irrigation systems to the small farmers.

Working with these large, established – and often global – companies made it easier to win the trust of the smaller farmers, Rietberg adds.

Encouraging sustainability 

As well as providing access to funding, Rietberg wants the product to improve sustainability and environmentally friendly practices within the supply chain.

Agri-Wallet aims to achieve this by providing funding linked to sustainability goals. If a farmer meets a certain KPI, they can receive even more attractively priced financing.

Rietberg gives the example of where a small poultry farmer would purchase chicks and would see up to 50 percent die within a month before they became chickens and were ready to sell on. This high death rate was often due to a lack of training or awareness around sanitation issues, required vaccinations or access to clean water. With some training, the farmer could work towards a KPI that called for a significant decrease in the death rate.

The technology behind Agri-Wallet means it can monitor whether the KPIs are being met by maintaining a record of what the farmer has purchased – in this case, chicks – and what the farmer then sells – in this case, fully-grown chickens. If the KPI is met, all parties benefit – both the farmers and the chicks, Rietberg explains.

Big Dreams 

Agri-Wallet is still in its early days, having completed its validation phase at the end of 2019, and is now processing $1.1 million payments. Yet its initial success has already won the SCF Innovation of the Year at the SCF Awards in November.

Rietberg is now looking to expand the product further into other African countries including Uganda, Ghana and Nigeria, as well as into Latin America and Asia.

“My dream is to reach 10 million farmers in the next five years – to really make a big impact,” he says, arguing that the fintech business model is highly scalable and the company is already in discussions with banks, including Rabobank, about what funding they have available for which sectors and countries.

Agri-Wallet is also attracting attention from global organisations, having won the prize for Disruptive Agricultural Technology from the World Bank last April. The company has started to work with the UN World Food Programme.

Agri-Wallet’s Amsterdam and Nairobi offices are expected to grow in the coming year as well, and the planned Asia office is due to open later this year or early 2021.

Rietberg is a determined character, yet as much as he wants to improve the sustainability of farming, he is also aware that his business and personal life needs to be sustainable too.

He keeps work-related travel comparatively low, visiting his Nairobi team around four times a year and making good use of Skype when he can’t be there in person – and as a result keeping his carbon footprint lower.

He also recognises the importance of taking a break from work. “I love my work and I love the challenge and the goal of what we are trying to do. But to have energy, I need to look after my health and spend time with my wife and family, see friends, read a book or go to the movies. A work-life balance is really important to make sure I have enough energy to make a big impact,” he says.

Having set ambitious growth targets for Agri-Wallet, Rietberg is no doubt wise to relish his moments of rest and relaxation while he can.