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A mobile app extends much-needed credit to smallholders

In 2021, Mlimi Pay, a fintech startup developed Mlimi Digital Wallet, a mobile solution designed exclusively to meet the financial needs of smallholder farmers in Malawi. The word Mlimi means “farmer” in the Chichewa language.

Despite a successful maize harvest last season, Patrick Thimisoni, a smallholder farmer on the outskirts of Lilongwe, is struggling to buy seeds and fertiliser for the new planting season. Thimisoni’s predicament is not unique. Many smallholder farmers across Malawi face similar challenges. Social pressure, self-control or spending needs make it difficult for farmers to save for future purchases. These habits keep them in a vicious cycle of poverty.

The Mlimi Pay team conducted research with smallholder farmers and found several barriers to farmers’ financial inclusion. Many of them admitted to lacking knowledge about existing investment opportunities. Illiteracy was also a major factor. Many farmers admitted that they did not understand the intricacies of the banking sector.

Malawi’s economy largely depends on agriculture. The sector is said to employ an estimated 64 % of the population, many of whom are smallholders. Helping farmers is therefore a matter of urgency for the country.

Mlimi Pay’s innovation seeks to leverage digital technology to extend credit, payments and savings services to farmers. The startup’s credit solutions are tailored to fit farmers’ unique needs, considering the seasonal nature of their income. They ensure that farmers have funds available when they are most needed – during planting season. 

Since its inception, the mobile wallet has brought significant change to farmers. For instance, Thimisoni has now been able to save money on quality farm inputs. “In the 2021/22 season, I was able to buy a lot of seeds, fertiliser and equipment which significantly increased my yields,” he says. “In the process, I have been able to build a house for my family and we are food secure unlike before.”

Stanislaus Sakwiya, the co-founder and managing director of Mlimi Pay, says that the inspiration behind their Mlimi Pay app comes from understanding the difficulties farmers face in accessing mainstream financing systems. Even microfinance often falls short since loans typically require regular instalments that can be challenging to honour due to the unpredictable nature of farming.

“Using existing technologies, like Airtel Money, which the majority of smallholder farmers are familiar with, our app delivers a solution that is affordable, easily accessible and user-friendly,” Sakwiya says. 

According to Sakwiya, MlimiPay began with just 14 farmers with a total deposit of 13,685 Kwacha ($ 13) in the first month in Mkangamira Village, situated on the outskirts of Lilongwe. Today, over 300 farmers have Mlimi digital accounts. Mlimi Pay intends to expand by also setting up a microfinance loan programme for smallholder farmers and expanding its services outside of Lilongwe.

Rabson Kondowe is a journalist in Blantyre, Malawi.

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