Boosting lending potential with satellite imagery system GRID

Improving the lending potential of credit providers to small holder farmers in southern Africa through satellite imaging.

Funded by the European Space Agency, this £200,000 project, known as GroWise, paved the way for the implementation of ‘GRID’ technology. GRID is a Crop Growth Index (CGI) service that uses synthetic-aperture radar (SAR) data, optical satellite data and precision weather information to model a variety of common African crops on a crop-specific basis.

GRID is the first tool on the market specifically allowing farmers and financial providers to track crop performance. CGI provides credit providers and insurers with daily updates of the crop’s growth stage, the biomass of the crop and the Leaf Area Index (LAI). Collecting and interpreting these three growth metrics allows credit providers to assess crop performance.

Agri-EPI Centre deployed project managers to assist project partners and allowing those with the technical expertise to focus on delivering results. We are delighted to have contributed to the emerging success of the GRID product, and we are particularly pleased that Agri-EPI Centre’s contribution was valuable in providing up to 1000 jobs shared between the UK and Africa.

This project aimed to give banks and credit providers the confidence to lend money against a patch of land rather than an individual. By having access to information about the predicted crop yield, incoming weather patterns, and land conditions, credit providers can better manage risk. This project also aimed to give small holder farmers access to key funding and legitimate credit so their business can thrive.

The challenge

Previously, there was no tool specifically designed for credit providers to track crop performance and actively engage with their investment.

As a result, many farmers found it difficult to acquire upfront investment at the start of a growing season as most lenders were not willing to take the risk on a blind investment. Agricultural credit providers, contract farming companies and insurers required transparency and confidence that the farmers can grow and sell enough produce to offset their debt.

Credit providers want to see how well crops are performing and have the ability to intervene with agronomic advice to secure their return on investment. This project aimed to address investors’ requirements directly by harnessing satellite imagery and data analysis.

The response

The front-facing response of the GroWise project was to deliver AgSpace Agriculture’s digital platform (GRID) that gives farmers access to data and insights from satellite imagery about their land and crop quality, backed by independent agronomic advice.

The platform also gives the credit lenders and banks transparent access to the data and information, and a separate aggregated portal for each individual smallholder farm client.

Once the GroWise project was launched, over 140,000 hectares of land were entered into the pilot phase which ran from October 2018 to March 2019. Since the pilot started, several new iterations of the crop growth model have been released and are now in commercial use.

For example, wheat, maize and sunflower models are now live on accounts in Africa, and a soya model was due to be released post-project completion. A crop growth model for sugarcane has also been started and will continue once the project ends.

The impact

The GroWise project was successful in partnering with the largest bank in Africa – Standard Bank – who are now confidently using the precision agriculture technology, satellite imagery and aggregate access to the GRID platform to lend financial support to smallholder farmers across Africa.

For smallholder farmers, GroWise and subsequently GRID offer more sustainable financing options compared to other exploitative, unofficial lenders. This has successfully brought and established smallholder farmers in a commercial finance model. It gives confidence and financial insurance to both the farmer and credit lenders and banks.

A major insurer in Zimbabwe has recently employed the use of GRID to monitor their investments. The Final Review meeting of the demonstration project was successfully held on 6th February 2020.

Project duration

The 3-year GroWise project duration started in December 2017 and concluded in November 2019. Today, the GRID product is commercially available across southern Africa.