Twiga Foods, a Kenyan mobile phone platform that sells bananas and other produce from small-scale farmers to local vendors and markets is offering local farmers access to a transparent marketplace. Through the platform, the farmers are earning more and selling to vendors for less, thereby bringing a winning formula with ripple effects across the entire supply chain.
Farmers who sell produce to Twiga now have access to a fair, transparent, mobile marketplace that offers higher prices for their goods. In the past, they often deliver money, time, and products because of their sales to wholesale markets and wholesale vendors. Each middleman took a cut that ate into their family’s income.
“Before working with Twiga I used to be a broker, but I would not pay for it,” says Anderson Kivuti, a 54-year-old farmer in the town of Embu who’s selling banana and bald to Twiga for the past six months. “Twiga is more organized and gives me stability.”
Besides earning more for their crops, farmers can increase their farms’ productivity as they receive technical advice and financial offers geared to their specific needs. On the other end of the supply chain, vendors benefit from fast, free delivery or production.
Since Twiga’s founding in 2014, the company has sold 200 million bananas through its mobile-based supply platform. It now offers a variety of food and beverage products from 2019. IFC co-led Twiga Food’s recent financing of $ 10.3 million to help the company expand operations and offer new services to smallholder farmers.
Better access to markets
Kenya is well-positioned for such progress; it has the largest GDP in East and Central Africa and one of the most conducive environments for private sector expansion in sub-Saharan Africa. But the country still faces challenges related to accelerating growth and boosting shared prosperity.
Poverty among rural farmers is a difficult problem to solve. That’s where Twiga’s mobile platform can make a difference in both ends of the retail value chain.
Traditionally, lack of reliable market access for smallholder farmers has impeded the economic development of rural areas due to the fact that there is no possibility of producing their produce directly. Highly fragmented systems encourage farmers to navigate through farmer groups or brokers to get their produce to markets. Fluctuating, non-transparent prices are often the result.
One of Twiga’s most important achievements is to increase vendors’ access to markets, a process that has transformed business. Traditionally, fresh-fruit and vegetables are delivered by brokers to four Nairobi wholesale markets overnight. Informal vendors will arrive before the source is generated before paying for a manual cart-pusher to deliver them to their stall.
The process is inefficient, time-consuming, and expensive for informal vendors. But because Twiga delivers production directly to the vendors’ stalls, vendors save time and money.