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Why does Jiva provide financing to farmers?

Jiva provides financing to farmers because many factors that hold smallholder farmers below the poverty line derive from a lack of access to fair, low-cost financing. Provision of capital to a farmer allows them to reinvest in the farm through the purchase of high-quality supplies, branded chemicals, and critical fertilisers.

We found through our research in many rural farming communities, from India to Indonesia to West Africa, that the problems begin when the farmer does not have the cash they need to purchase supplies for their farm. Between payment from the previous cycle and the beginning of the next, earnings have been spent supporting family and community needs. Now, the farmer must rely on traditional banks, who are unlikely to be present in the community and unlikely to lend without proper documentation, or on local traders, who often charge exorbitant rates.

The farmer is then forced to go with the local trader. They elect to buy low-quality supplies in order to spend as little as possible to avoid more charges. The low-quality supplies yield a meager harvest and damage the soil, reducing the farmers' profit. In order to make ends meet, the farmer takes out another loan. They unknowingly enter a cycle of debt.

At Jiva, we aim to break this cycle by providing financing, in the form of digital “advances” to our farmers. Once a farmer signs up and is verified through Jiva’s app-based approval system, Jiva adds an advance amount to the farmer’s profile. The farmer can then only use that advance at Jiva’s e-commerce store, which stocks and delivers trusted, brand-name seeds and other supplies. The low- or no-cost advances allow the farmer to “buy now, pay later” without the exorbitant rates. At harvest, the Jiva Agent simply deducts the amount used for inputs from the total price of the harvest.

Our system of digital, non-fungible financing ensures that funds meant for the farm are used only for farm supplies, that those supplies are trusted, and that farmers avoid exorbitant rates that can quickly lead to financial hardship.

What’s next?

Jiva is constantly reviewing the designs, features, and delivery methods of our products. As we continue to extend advances to farmers across South Sulawesi, we remain committed to speaking directly with our users and Jiva Agents, improving our products and services, and creating value for millions of farmers around the world.

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