“A​ccess to credit should be a basic right for everyone,” states 26-year-old Peris Bosire, co-founder of FarmDrive in Kenya.

“The problem we are addressing is the lack of access to finance for smallholder farmers from the formal financial ecosystem… They are left with a hole in their pocket because they just don’t have any access to working capital.”

Bosire experienced this first hand growing up in a farming community in Kisii, situated in south-west Kenya. She watched her family battle day-to-day challenges such as poor yields and post-harvest losses. It was hard work, and many of their troubles could have been eased through quality farming inputs and ​modern equipment. But financial institutions were unwilling to provide them with the financing to do so, which left them in a catch-22 situation: they needed capital to help grow their farm beyond the ​subsistence level, yet banks would only provide loans to larger established commercial farmers with credit histories and collateral. This left them financially “stuck”.

Today Bosire is tackling this challenge with her fintech company FarmDrive – which has recently been named an Innovation Prize for Africa finalist.

Launched in 2014, the start-up has developed an innovative alternative credit-scoring model that can be used by financial service providers, such as banks, to assess the creditworthiness of farmers and ultimately allow more smallholders to access financing, while still protecting banks from defaults.

Building risk profiles for small-scale farmers

“Financial institutions know that agriculture is a big, untapped market… The only problem is that the traditional risk assessment models just don’t work for them. So there needs to be better ways of assessing risk profiles of farmers,” says Bosire.

Through FarmDrive, farmers can apply, receive and repay their loans using their mobile phones. ​Its​ interface is ​available on simple feature phones through SMS shortcodes or USSD. Farmers simply send ​their ID number and name to a shortcode, and FarmDrive’s technology instantly connects with various know-your-customer (KYC) databases, including those belonging to mobile network operators and government entities. Farmers can also share their location, the types of crops they cultivate, and any financial history.

FarmDrive’s algorithms then crunch this information – along with other existing data like soil type, weather patterns and mobile phone usage. Once a farmer’s risk profile has been determined, loans are distributed through and repaid via mobile money.

“Farmers don’t get loans because banks don’t know who farmers are. They are not able to assess the risk of smallholder farmers – they don’t have the tools to do that. But at the same time there is a lot of information about farmers that can be utilised,” Bosire explains.

“The KYC information already exists in government databases… But that information is not being utilised to deliver a service to people that need it. So FarmDrive’s role is bringing in all these details together – basically bringing in alternative data sets that will help us understand the ability of the farmer to hold credit and their willingness to repay… And we use machine-learning algorithms that evaluate and analyse all these sets of data.”

Initially, FarmDrive operated in partnership with a single microfinance organisation, but has since positioned itself as a data analytics company targeting its software at financial service providers keen on lending to smallholder farmers.

​FarmDrive ​has also partnered with a large telco in Kenya​ – growing its network of smallholder farmers from 3,000 to more than 100,000​ overnight.

Entrepreneurship – a “series of steps”

Bosire’s interest in technology began as a child, when her mother insisted she take extra lessons after a large tech multinational donated nine outdated desktops to her primary school. By the time she entered high school, her computer knowledge far outweighed her classmates’ – and she quickly became the go-to person for all computer-related queries.

“Because of my exposure to computers, I found myself helping students who had never used computers and therefore did not know how to use them. I did that during my high school journey,” she recalls.

“During that time, I managed to improve my skills and then learnt to write some basic programmes here and there.”

In her final year of high school, she proposed a project to detect when public transport vehicles were overloaded using special sensors. The idea was presented at a national competition in Kenya – and was selected as a winner. Bosire was then accepted to study computer science at the University of Nairobi, where she met her soon-to-be business partner and co-founder, Rita Kimani.

“It was a series of steps that led me to entrepreneurship,” says Bosire, citing key factors such as her upbringing and the determination of her parents to provide her with various opportunities.

Her advice to others who are looking to get an innovative idea off the ground is to stop just talking about it, and take the first step towards doing it.

“You have to just start somewhere. I know it is very cliché, but it is advice I keep repeating because in the last three years since we started, we have learnt so much, gone through ups and downs of starting a business… And the reason we are here now is because we took the first step and started somewhere.

“So my advice is to believe in your idea and know that things will not be ‘neat’ initially – but just start anyway. You will evolve as you move along and become smarter in whatever you are doing.”