End to End Biometric Solution for Africa’s Smallholder Farmer Financing

Africa’s agricultural sector has long been regarded as the key to unlocking the continent’s potential for economic development. With millions of families relying on farming as their primary source of income. However, smallholder farmers often face numerous barriers that prevent them from accessing the tools, knowledge, and financing necessary to increase crop yields and improve their livelihoods. However, in recent years, many microfinance institutions have begun offering loans to farmers to help them grow their businesses. While this has been a welcome development, loan companies often face challenges tracking the farmers who take out these loans. In this blog post, we will explore how M2SYS helps one of the microfinancing institutes with an end-to-end biometric solution.

Difficulty in tracking loanees and defaulters

Farmers have the option to obtain loans either as individuals or as a group. Alternatively, they can opt for asset-based financing, which involves receiving essential farming assets, such as high-quality seeds, fertilizers, and planting tools, without paying for them upfront with cash. The financing company then allows the farmers to repay the costs of these assets over monthly cash payment. However, failure to repay the loan on time can result in farmers or groups being able to secure further loans. This is where the problem comes in.  

A microfinance company has approached M2SYS technology to help them overcome the challenges they are encountering in tracking loan defaulters using their manual pen-and-paper system. The company is experiencing difficulties due to the frequent transfer of loan officers to various locations, which makes it challenging to maintain an accurate record of farmers who have taken out loans and to ensure that repayments are made on time. Without a centralized database, the loan company struggles to track the loans and the defaulters effectively. Additionally, the company faces identity fraud, where farmers use fake identities or the identities of other farmers to obtain loans. This can result in losses for loan companies and make it difficult for farmers to access financing in the future.

Identifying farmers with a multimodal biometric solution 

M2SYS technology offers identity management software and hardware for government and enterprises. Our multimodal biometric matching engine supports  fingerprint, palm vein, iris, and facial recognition technologies. These technologies are used to create unique identifiers for individuals with a single API call. Our solutions can be configured to meet any government agency’s or enterprise requirements! In this case, Our solution team provided a fingerprint and facial recognition-based identification system to help track farmers who have taken out loans. Farmer’s fingers often get disrupted while working, so even if the finger gets disrupted, they can use facial recognition to identify the farmers. Our team also developed a client application with dashboard features. This application will allow loan officers to access the biometric database and view information about the farmers who have taken out loans. The dashboard will provide real-time information on the status of each loan, including whether it has been repaid on time.

How does a biometric solution benefit the microfinancing company?

The biometric solution provided by M2SYS technology offers several benefits to the microfinance company. First and foremost, the solution helps the company track the farmers who have taken out loans and identify those who are defaulting on payments. This is essential in preventing loan fraud and reducing financial losses for the company.

With the client application and dashboard features, the loan officers can easily access the application to view the loan status of each farmer. The real-time information provided by the dashboard helps the loan officers to take quick actions and make timely decisions to prevent loan defaults. This, in turn, ensures that farmers are held accountable for their loan repayments and can secure future loans, ultimately improving their farming businesses and livelihoods.

Moreover, the biometric identification system offers a more accurate and efficient way of identifying farmers than traditional methods, such as relying on IDs and signatures, which can be forged or easily misplaced. The use of multimodal biometrics, such as fingerprint and facial recognition technologies, ensures that the farmer’s identity is verified accurately and securely. This reduces the risk of identity fraud, which is a significant challenge for microfinance companies.

The biometric solution also helps loan officers to keep track of the progress made by farmers who have received asset-based financing. With real-time updates on repayments, the loan officers can monitor the progress made by farmers in using the assets they have received to increase their crop yields and improve their businesses. This helps the loan officers to provide timely support and advice to farmers, ultimately improving the sustainability and profitability of their farming operations.

Take away

The use of biometric identification systems in the microfinance industry has the potential to revolutionize how loans are managed. The biometric solution provided by M2SYS technology offers numerous benefits to microfinance companies that provide loans to smallholder farmers in Africa. The solution helps to track loan defaulters accurately, prevent identity fraud, and provide real-time updates on the progress made by farmers. It is ultimately enabling the microfinancing company to provide better support to smallholder farmers and promote economic development in Africa. If you are looking for a biometric solution, contact us with your requirements. We will deliver the ready-to-deploy solutions within 24-48 hours!