Hot startup of the month: Kenya's Ketha Africa

The rise of agricultural technology (agritech) solutions on the African continent has been transforming food systems and tackling long-standing obstacles to smallholder productivity.

According to the Agritech Market Report for 2024-2030, the global agritech industry was valued at US$21.9 billion in 2021, with growth projection of 12.14% over the forecast period, reaching US$43.5 billion by 2027.

Furthermore, the sector is crucial in providing employment to the working population, economic growth, and food security in Africa.

However, according to the "African Development Bank Group Report 2023," sluggish economic growth, a global food crisis and climate-driven extreme weather events threaten to slow the continent's post-COVID-19 pandemic recovery efforts, undercutting or even reversing hard-won development gains.

Be that as it may, agritech is gaining traction as a means of promoting food security and protecting farmer incomes, as well as supporting the sustainable development of a rapidly expanding continent. African agritech startups are leveraging technology to address key challenges in African agriculture, such as market inefficiencies, low productivity, and lack of access to information and finance.

Enter Ketha Africa

One such startup is Kenya's Ketha Africa, an agrifin platform. Founded in 2022, it seeks to automate agriculture ecosystems by connecting the value chain actors and providing a robust network to ensure the security of transactions.

"At the core of Ketha is a system that empowers actors within the agriculture ecosystem with financial products that support their operations – including small-holder farmers, agro-dealers, transporters, and casual workers – to access payments in near real-time and financing through instant digital loans," said Ketha Africa Executive Director and Founder Munyi Nthigah in an interview with Connecting Africa.

He added that this is made possible through a range of payment intervals, including advance payments for produce; immediate settlement through aggregation; daily, weekly, and monthly payments for casual workers; subsidies; and grants.

Ketha Africa Executive Director and Founder Munyi Nthigah. (Source: Ketha Africa)

"Moreover, we facilitate payments for processors (factories/cooperatives) and aggregators by automating their end-to-end payment processes, from farmer enumeration to quality checks, traceability, invoicing and settlement through multiple channels, including mobile and bank payments," he continued.

Ketha Africa's workings

According to Nthigah, the Ketha platform works by simply digitalizing the whole value chain including collections, quality checks, batching and tracing, as well as assigning value to farmers based on the produce delivered.

"Farmers are on boarded by our field officers using the Ketha Field App which captures their KYC and geo-location," he explained.

Additionally, Nthigah said farmers can then access financing through a USSD service or Ketha's mobile app and request for spot payments or payments advances.

The Ketha Executive Director believes that regulation on the continent is a necessity, and that startups need to ensure the platforms they build are secure and address customer concerns such as data privacy and reliability.

The Ketha platform digitizes the value chain from collections, quality checks, batching and tracing as well as assigning value to farmers based on the produce delivered. (Source: Ketha Africa)

"The implementation of the Data Protection Act has helped in streamlining how customer data is collected, stored, and used. These standards give confidence to the customers that their data is secure and is being used to their benefit," he said.

"Regulations around payments and lending such as the National Payments Act and Digital Credit Providers Act also serve to protect customer's deposits in mobile wallets and against predatory lending," Nthigah continued.

He said these regulations also ensure that the market is devoid of malpractices such as money laundering, which builds confidence in the Kenyan market.

"At Ketha, we implement regulations in our product design and user flows to ensure that compliance is a core part of the business," he said.

Ketha's competitive advantage and expansion plans

"Ketha Africa was established through sweat equity, using our savings – along the way we had friends, professional colleagues who believe in the dream and family as well chip in," the founder explained.

"Right now, we are in the market for seed funding and are also raising debt to support our balance sheet requirements to help us service more small-holder farmers," he continued.

He added that the company makes money by charging processors to manage their collections, quality checks, tracing and payments to farmers and laborers.

"We also make money by charging a facilitation fee to farmers for advance payments for collections and also financing of wages and inputs," Nthigah highlighted.

Moreover, Nthigah mentioned that because the agritech challenges in Sub-Saharan Africa are similar, there is an opportunity to leverage on the high mobile penetration in Africa to drive access to finance for small-holder farmers through digital wallets.

*Top image source: Image by freepik.

— Matshepo Sehloho, Associate Editor, Connecting Africa