Smallholder farmers and lenders with smallholder lending portfolios ( which according to CGAP currently account for about USD 50 billion globally) are highly vulnerable to climate change impacts. mfarmPay, a novel parametric lending solution driving financing to African farmers, offers innovative data-driven solution to reducing climate risk in lending portfolios and incentivising the adoption of climate-smart farming approaches by smallholder food producers.
mfarmPay model is aiming to stimulate climate-smart capital for rural smallholder African farmers from climate-focus lenders and impact investors. Through this, achieving a two-prong approach to addressing financial inclusion of close to 150 million underserved African farmers, improving environmental performance and climate resilience.
Smooth integration of Climate-Smart Agriculture (CSA) metric into mfarmPay proprietary alternative credit scoring systems, would enable simultaneous management of credit and the environmental risk faced by providers of smallholder credit and climate-driven financial institutions.
Partnership is Key
mfarmPay, as a value-driven solution, is strongly focused on scalability and having a robust sustainability model. For this to scale to the desired level and achieve the needed impact, impact investors, financial institutions, and agribusinesses engaged in smallholder supply chains need to partner with mfarmPay. mfarmPay will reach 3 million African farmers within 5 years streamlining loan origination processes, assessing bankability of rural farmers located in environmentally suitable areas, and providing access to a plug-and-play AI-driven credit-scoring tool.
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