According to International Trade Administration, investors consider Uganda’s agricultural potential to be among the best in Africa, with low temperature variability, fertile soils, and two rainy seasons over much of the country – leading to multiple crop harvests per year.
According to the UN’s Food and Agriculture Organization, Uganda’s fertile agricultural land has the potential to feed 200 million people. 80% of Uganda’s land is arable but only 35% is being cultivated. In fiscal year 2020/2021, agriculture accounted for about 23.7% of GDP, and 31% of export earnings. The UBOS estimates that about 70% of Uganda’s working population is employed in agriculture.
Challenges
Agriculture plays an important role in providing food security and sustainability for the people in any country. However, lack of funding and limited distribution channels to reach customers are frequent problems faced by farmers to meet the level of sustainability.
Digital marketplace with Fintech enabled might transform agriculture’s business process into more sustainable in terms of funding and distribution. FinTech offers farmers convenient ways of getting sources of funding through crowdfunding and digital payment system. Thus, digital marketplace can act as a platform for FinTech to integrate the innovative financial solution into a broader agricultural ecosystem.
Government and Fintech
In order to boost agricultural production, government of Uganda should find a way to be able to tap into financial technology (FinTech) in linking farmers with financial services. The Fintech industry in Uganda has the potential to enhance agricultural productivity because of its enormous amplitude for financial circuits through making financial services and products accessible even to the marginalized farmers.
Through the use of modern financial technology, we could as well witness improved cost efficiency across the food supply chain in the country.
Access to agricultural financing plays a critical role in enabling the agriculture sector, including smallholder farmers and business enterprises, to adopt productivity-enhancing technologies and practices.
However, agricultural transformation also requires farmers to shift from traditional agricultural payment systems to using available digital money services to reduce their financial risks.
As of now, Yo! Uganda has partnered with United States African Development Foundation (USADF) to roll out Mastercard Farmer Network – a digital agriculture solution that digitizes marketplaces, payments and workflows within the agriculture sector.
The aim of the partnership is to create permanent links between key stakeholders in the agriculture sector, which serves as the largest employer in the Ugandan economy. It will create a one-stop digital marketplace, advancing digital inclusion and fostering wealth creation for both individuals and communities.
The implementation of this digital technology is already helping to bring more visibility to supply chains and help move farmers away from unreliable and risky cash-based interactions. The platform provides a digital marketplace for buyers who are looking for sustainable sources of quality produce at favorable market prices and a place for small-holder farmers to access reliable markets and fair prices.
However to be able to maximize these opportunities, there is a need to increase the awareness and knowledge of farmers on these kinds of platforms.
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