“People can save for cellphones or an upcoming wedding and it’s a matter of behavior,” says Ahmed Umar, co-founder of Nigerian agrifintech startup FoodInsure. “Why not create something that allows people to save strictly for food?”
This is exactly what FoodInsure aims to do by officially launching its digital food savings platform in a few months. The platform, accessible with a mobile device, secures users’ savings for food and connects these people to smallholder farmers and cheaper food prices. The system also benefits Nigerian farmers, who often struggle with a lack of market access. So far, FoodInsure has sourced food from 100 smallholder farmers.
Umar himself has a background that spans building construction technology, project management and the non-profit world. His work includes piloting agri-food startup incubation programs in the West African region, notably in Benin, Togo and Nigeria. Project management has also allowed him to touch access to credit for startups by working with non-profit organizations.
Below, Umar (AU) recount APN learn more about the original inspiration behind the platform and how it’s already helping consumers save for food.
APN: What problem in the food industry is FoodInsure trying to solve?
AU: Around September 2020, my co-founder Femi Oluwagbemi and I were returning to work after the [Covid-19] blockages. We were colleagues at the time and we were just curious to know what was going on, like the impact of Covid on the economy and people.
We realized that food was a critical thing that people struggled with. [During lockdowns] people lost their livelihoods and many people could not go to work.
We knew people were already saving in Nigeria – there are some great apps for people to save, but people still aren’t saving for food. People are saving for cell phones or an upcoming wedding and it’s a matter of behavior.
So we thought, why not create something that allows people to save strictly for food? And when there’s an emergency, can they count on it? That’s when we decided to create a product that could help improve food safety.
We also found that access to finance for food producers was limited and there was a mismatch between supply and demand, which caused many post-harvest problems.
APN: How does FoodInsure work?
AU: An individual can make a deposit on the platform, as they would in a bank, but it is strictly a deposit for food. They cannot cash it or transfer the money.
The deposit is then insured by the Nigeria Deposit Insurance Corporation (NDIC), which is a body that administers Nigeria’s deposit insurance system.
Beyond insurance, FoodInsure offers an online marketplace for smallholder farmers. Users who deposit on the platform can then purchase those food items like rice and corn, which they are saving for, for a designated period of time which is six or nine months.
It’s basically a pre-order of food and the users have a guaranteed supply and that’s our value proposition, where they can even get the food at cheaper rates.
We also have demand data that we don’t want to sit idle. We want to take this data to the banks and show them the guaranteed demand for rice or corn so that they can use it to extend credit to farmers.
APN: How will you be able to provide food at a lower cost to users?
AU: Our plan is to launch in Lagos, an urban setting where people generally don’t have access to farms and much of what is consumed comes from other parts of the country. And that means surcharges for food.
We say we guarantee the food at a price slightly below the market price, because we have enough time to stock up between the time of deposit and the time of delivery. Meanwhile, we are also building relationships with large buyers and existing regional food banks or just wholesalers who can give massive discounts.
APN: Most city dwellers would have access to smartphones. What about those who don’t or those who don’t live in cities like Lagos?
AU: We are mindful that not everyone, even in urban areas, would bond with this solution.
So to include rural unbanked people, we want to create a USSD platform which is the natural approach to fintech. We also plan to work with locally placed agents and roll out our product and make it accessible to users there.
NFA: Where are you in your journey to create FoodInsure?
AU: We are in the process of finalizing our real product which will be ready in about two months. At this point, we’re tidying things up, mostly reaching out to friends and colleagues to let people know what we’re doing and what’s coming and getting feedback from them.
NFA: Now that you are testing, what is the level of acceptance from potential consumers?
AU: I was on TV a few weeks ago talking about FoodInsure and before I even left the studio I had received several messages and emails asking me where they could sign up.
If you take a survey or a sample of people, especially in Nigeria, you will see that many people are not even interested in traditional banks because fintechs offer better services. They are constantly innovating and solving problems.
We think people want to see how [FoodInsure] will work and how they can be part of it. Now we want to finalize our product and even host physical events where people can check out FoodInsure, sign up, and give us feedback.
NFA: What impact would you like FoodInsure to have on the Nigerian food ecosystem?
AU: What we want is for there to be guaranteed access to food supply for people. But while we’re solving that, we’re also solving some fundamental problems with the lack of food-only savings.
The key for us is to see that we raise enough capital and finance for food production.
NFA: What kind of support would you like to see in your industry?
AU: I would like to see patient capital or research funding enter this space.
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