There is quite some interest in geodata applications for inclusive finance for smallholder farmers. The idea is that financial institutions can make their operations more effective and more efficient. Geodata companies are looking for a combination of new markets and solving societal problems. Applications are credit scoring, assessment of repayment rate and time, geo-location of farms and plots, agricultural advice, and risk management. The Platform for Inclusive Finance (NpM) and the Geodata for Agriculture and Water Facility (G4AW) funded a number of pilots. The results of the pilots are very promising. However, there are a number of considerations to take into account:
Challenges encountered in the implementation of geodata applications were:
- Building trust and confidence between partners takes more time than anticipated;
- Receiving organisations need to digitalise their whole business process, not just geodata; and
- Capacity development and staff time input are needed for working successfully with geodata.
Two factors are especially important from an investor’s perspective:
- Testing and validation with more growing seasons are needed to assess the real added value of geodata (i.e. more use cases);
- The application of geodata should be considered in the general framework of digitalisation for streamlining operations and not as stand-alone.
The following technical, organizational, and cross-cutting factors play a role in future developments:
- Technical: availability of more free and open satellite data, increased application of machine learning and artificial intelligence, more integration of different data sources and methodologies, new ways of data collection, expansion of local networks for in situ observation;
- Organisational: improved partnerships to reach the farmers effectively, increased cooperation with government, more capacity building and involvement of local geodata specialists;
- Cross-cutting: increased combination with impact investment (for inclusive green growth, climate adaptation, circular economy, commodity flows, tenure security, and energy transition) and stricter regulations on data protection and privacy.
If you want to have a look at the full report, go to: here
RELATED TWIGA PLATFORM: DIGITAL PLATFORM
Written by Mark Noort