It all started with a dream: to increase access to credit and contribute to securing the livelihoods of the rural poor in Uganda – mainly farmers. It was unfamiliar terrain. Typically, smallholder farmers lacked a credit history, and in the case of women, lacked both a credit history and acceptable forms of collateral such as land that could be used to secure a commercial loan from a bank. Where farmers could access informal loans, the money lenders charged them exorbitant interest rates. This discouraged farmers from using these loans to buy farm inputs such as quality seed that could dramatically raise the productivity of their farms. Determined to make a difference in this landscape by leveraging the power of alternative credit scoring, the team at Emata set to work; using machine learning to create a picture of a farmer’s true creditworthiness. Emata  is a licensed Ugandan microfinance institution seeks to offer simple, available and affordable farmer financing.

By digitizing the entire process of collecting farmer information, alternative credit scoring and disbursing the requested loans, Emata aimed to generate a solution that was effective and efficient. It also aimed to make the loans more affordable for farmers and lenders alike. Emata applied for a lender’s license from the Government of Uganda in December 2020 and after approval became a recognized lender in February 2021 allowing them to reach thousands of farmers with more affordable financing. Emata’s technology solution can be used by enterprises such as aggregators and cooperatives to digitize their operations.  So far, Emata is operating in the dairy, maize, coffee and oilseed value chains with the goal to catalyze on-farm investments to drive agricultural productivity and increase farmers’ revenues. To scale faster, Emata is also working with cooperatives and aggregators to reach more farmers and build trust in the innovation.

Recently, Emata concluded their participation in a three-month business acceleration initiative organized jointly GIIF and Intellecap following the Africa Agtech and Inclusive Insurance Innovation Challenge. The objectives of the accelerator initiative were to build start-ups’ capabilities in business process optimizations, marketing, revenue generation and insurance product development. 

During the accelerator, Intellecap provided Emata with a clear overview of the insurance industry in East Africa: including connections with APA Insurance – a Kenyan-based insurer – to explore market expansion, while an introduction to Acre Africa is underway. Thanks to the insurance product development module, Emata gained insights that have enabled it to collaborate with AIC Uganda to offer insurance to smallholder farmers in Uganda. AIC leverages Emata's aggregated farmers’ data to provide crop insurance.

What were some of the key takeaways for Emata from the business accelerator experience? 

Strategic partnerships and peer-to-peer learning are vital for successful insurtech ventures.  Government agencies, private sector firms and other industry players can promote insurtech awareness and deployment at scale. From the peer learning sessions, the Emata team appreciated the similarities with other start-ups’ experiences in trying to develop agricultural insurtech products. These sessions also fostered an exchange of ideas and learnings in insurtech. 

According to Bram van den Bosch, the Emata CEO: “Understanding experiences from the enterprises in Nigeria and Ethiopia has helped us borrow what is working well, identify what we need to improve on. Different markets being at different stages of maturity has been a source of great learnings.”

Currently, Emata has budget committed to investments in equity and debt  and they are in the process of evaluating term sheets issued by potential investors through support from Intellecap.

For agtech and insurtech start-ups, the true value of initiatives such as the just-ended GIIF-Intellecap business accelerator is in improving their capabilities not just in business operations and product development, but in also giving them access to expertise, peers and networks of investors. Through this exposure, the goal for these enterprises is also to gain perspective on the ecosystem’s big picture and how to take their innovations to the next level. These companies like Emata are replicating the learnings from the GIIF-Intellecap accelerator initiative for a ripple effect in their communities. 

Photo by: www.emata.ug