Research to enable new geomapping technology use in support of smallholder farmers
Palladium works with governments, businesses, and investors to solve the world’s most pressing challenges. Supported by Small Foundation, they have undertaken research into the potential that geo-mapping technology offers financial intermediaries in expanding access to finance for smallholder farmers.
Geo-mapping is the collection of location information to assemble a map, specifically in this context to identify a farm plot’s location, size and topography. With this information, it is possible to gather key information for intermediaries (financial institutions, agri-businesses, cooperatives, insurance providers), to verify farmers’ locations, understanding climate risk, assessing soil health, and projecting harvest dates.
Through its research, Palladium evaluated the viability of geo-mapping as a tool to assess risk for smallholder farmers, aiming to increase the likelihood that intermediaries would provide financial services to them.
Through discussions with intermediaries, geo-mapping providers and subject matter experts, Palladium found a strong business case for geo-mapping’s usefulness. Small Foundation supported Palladium in identifying and forging long-lasting connections with key stakeholders in the agtech space.
Designing a facility to increase uptake of geo-mapping
Building off the research, and working with partners, Palladium designed a finance and technical assistance facility to increase the uptake of geo-mapping and to improve the profitability of agri-lending. This facility will provide technical assistance that includes, but is not limited to, market building activities, conferences and networking opportunities, resource development, and best practice dissemination.
The facility will specifically offer the following services:
- Provide intermediaries with below market rate capital and technical assistance to adopt technology that allows them to implement geo-mapping and related digital services, gather enhanced data for credit analysis and digitise financial transactions.
- Offer financing and technical assistance to technology providers enabling them to expand services and better target customers.
- Facilitate activities where intermediaries can convene with technology providers to learn how to close the small-scale farmer credit analysis gap using technology.
The long-term goal of the facility is to increase smallholder farmer access to financing, allowing farmers to enhance productivity and improve their livelihoods.
Beyond the facility, Palladium seeks to spread awareness about the usefulness of geo-mapping technology in expanding access to finance for smallholder farmers and has hosted webinars for the Global Digital Development Forum and the Smallholder and Agri-SME Finance and Investment Network (SAFIN).
In publishing the report “A Paradigm Shift in Lending to Smallholder Farmers: The Potential of Geomapping Technology, Palladium and Small Foundation have catalysed discussions within the international development sector, which resulted in the design of a finance and technical assistance facility that will ultimately increase smallholder farmers’ access to finance.
For Small Foundation, this research represents a meaningful contribution to the knowledge base on the application of geospatial technology to rural agricultural challenges.