Former British minister delivers FinTech boost to African farmers
Former UK government minister Mark Simmonds (pictured) has teamed up with FinTech veteran Hirander Misra on a venture that aims to help African smallholder farmers boost their earnings by connecting them with local commodity exchanges. The Financial and Commodities Ecosystem (FinComEco) says it wants to improve food security, economic diversity and financial inclusion by connecting farmers with exchanges, financial infrastructure and national economies.
Specifically, the operation plans to either establish or reinvigorate local commodity exchanges underpinned by trading technology, electronic warehouse receipts and a complete mobile banking system.
To do this, FinComEco will work with Gmex Group, the trading technology company founded by Misra, and Saescada, a digital banking platform vendor set up by FinComEco director Steve Round. This combination, says the group, will ensure that farmers get price discovery and transparency, electronic warehouse receipts, risk management and hedging, and an integrated e-banking and payments platform.
By creating a supply-to-demand chain that includes small-scale traders, brokers, storage, transportation, shipping, banks and buyers, FinComEco aims to help smallholder farmers get better prices for their produce, and open up alternative added-value opportunities including e-commerce-enabled enterprise.
FinComEco says that it has already proven that its model works in Malawi at the Agricultural Commodity Exchange for Africa through the Gmex Group. During 2016, 47 000 people registered to receive the latest market prices on their mobile phones, with farmers seeing an average 31% increase in income from use of warehouse receipts and better price transparency.
However, the new group stresses that it will tailor its work to suit each country it enters, initially concentrating on African markets. This will be done through syndication to strategic investors, with news on this promised "in due course".
Says co-founder and chairman Simmonds, a former Foreign and Commonwealth minister: "It is important to recognise each African country is unique with individual economic, political and social drivers. With FinComEco I believe we have a detailed strategy to support, improve and facilitate the full agricultural value chain improving lives, creating jobs and alleviating poverty."