Smallholder farmers remain at the heart of Africa's food systems, yet millions face limited access to the credit, insurance and working capital needed to scale their businesses.
Source: supplied
According to South African agri-fintech company eSusFarm, the financing gap facing smallholder agriculture across the continent is estimated to be $65bnwhich is primarily driven by challenges in risk assessment and access to reliable farm-level data.
In many African countries, agriculture contributes even 40% Yet only a small share of the GDP is received through formal credit. Farmers are often excluded from financial services because lenders and insurers have limited visibility of production, climate risk and recovery potential.
Data gap increases financial challenges
Lack of reliable agricultural data remains one of the biggest obstacles to expanding finance to small farmers.
Unlike large commercial farms, many smallholder operations do not generate formal production records or long-term reporting data, making it difficult for financial institutions to accurately assess risk.
Without adequate information, risk is often priced too high or avoided altogether.
According to eSusFarm, many existing agriculture technology solutions rely on smartphones and reliable internet connectivity, creating additional barriers for farmers working in low-connectivity environments.
Using AI to assess agricultural risk
The company has developed a platform that combines satellite imagery, weather data and historical climate patterns to create risk profiles for smallholder farmers.
Farmers can access the platform through USSD on feature phones, eliminating the need for a smartphone or constant internet access.
Artificial intelligence models analyze environmental and agricultural data to assess crop and yield risk, supporting parametric insurance products designed to respond to predefined weather events.
When agreed season thresholds are met, payments can begin automatically and payments can be made directly to farmers through mobile money channels.
“For too long, smallholder farmers have been invisible to financial systems, not because they lack credit, but because no one has built the infrastructure to prove otherwise,” says Watson Vuyo Matsa, CEO and co-founder of IsaFarm.
“Our role is to transform the data already in the field into a financial identity that opens the door to loans and insurance.”
Expanding access to finance
According to the company, improved risk assessment could help reduce operating costs for insurers, while giving lenders more confidence to extend credit to underserved agricultural markets.
“The biggest impression the platform made on me was its ability to aggregate and collate farming data for smallholder farmers,” comments Nontokozo Davidson, development finance professional and founder of Adopt-a-Farmer.
“If this is harnessed and scaled up, it will be a game changer for the industry.”
The company says insured farmers are generally better placed to recover from adverse weather events, helping to stabilize household incomes and strengthen resilience within farming communities.
Development plans across Africa
eSusFarm currently operates in parts of Southern and Eastern Africa and is expanding into West Africa.
According to the company, the platform has connected more than 380,000 small farmers and more than 20,000 insurance and advisory users.
The business has participated in the Microsoft for Startups program and the Microsoft and NVIDIA GenAI Accelerator, using Microsoft Azure to process satellite, climate and USSD data.
“Our focus is on helping African founders build solutions that can scale securely and reliably,” says Gerald Mathias, Microsoft Africa Transformation Office Lead.
“IsusFarm shows how AI and cloud infrastructure can turn climate and crop data into faster payments and more confidence for insurers and lenders – unlocking credit for smallholders at scale.”
The company says future developments will include expanded satellite crop monitoring, advanced AI-powered risk scoring, and continuously learning models aimed at improving risk assessments over time.
“We're not building another app for farmers. We're building a financial rail that an entire continent of smallholders has never had access to, so that when the next drought comes, or the next opportunity comes, they're not left behind,” says Matsa.