The African agribusiness sector especially small-scale enterprises receive low funding from banks. In most cases, banks feel insecure to offer financial aid to agribusiness entrepreneurs and startups. This is because one cannot be sure with the returns at the end of any given harvest. However, the huge punch of datasets in agribusiness has helped it to source for financing. According to Antois van der Westhuizen, the managing director of John Deere Financial, Sub-Sahara Africa, this has come from various financing institutions apart from banks. The African agribusiness data has gone high within a period of 12 to 18 months. The increase has brought a change in the financing of the sector.
Various companies such as John Deere increase the rate of growth of agribusiness data. These companies collect and process a huge amount of data on many factors. The factors include the type of soil, weather and seed variety. John Deere does that by connecting its pieces of equipment to one another as well as to operators and owners. The company also works with commercial farmers. Furthermore, John Deere is collecting information from small-scale operators. It then uses it to calculate how they can bank and get profit.
The evolution of agricultural sector is attracting much attention from technology entrepreneurs. Such entrepreneurs are keen on developing new big data solutions and platforms. A good example of such companies is Aerobotics based in South Africa. The startup majors in aerial data analytics. The company has an early warning system. The system helps the farmers realize problems early enough. It also provides farmers with a whole assessment of their crops. Moreover, it developed a platform which identifies the data using drone and satellite imagery and then diagnoses it.
The company’s main point of focus has been large-scale farming. This is because of the logistical problems like technology and internet found in rural areas. The company has taken part in many piloting projects with insurance companies. However, it is now working with Nedbank on financing an Agri data-gathering partnership.
Banks prefer to offer financial support through a partnership with agricultural co-operatives and commodity trading companies. But involvement in input farming with small-scale farmers tends to be tiresome and expensive. This due to the size of farms they carry out agriculture in.