Farm Aid: MIT tech startup brings credit access to rural farmers
New company offers farmers direct access to supplies and credit
By Amy MacMillan Bankson |
May 19, 2016
A new MIT Sloan startup plans to give the world’s poorest farmers direct access to credit and supplies through a mobile platform.
Ricult, which launched in February in Pakistan, has already registered over 400 farmers, generating more than $10,000 in revenue, said co-founders Aukrit Unahalekhaka, a System Design and Management student, and Usman Javaid, who graduated from the MIT Sloan Fellows program in 2015. In April, Ricult won $7,500 in cash at the MIT IDEAS Global Challenge. The team also recently won third place at the Big Ideas@Berkeley competition, a University of California social entrepreneurship event.
Unahalekhaka and Javaid met in an MIT Development Ventures class and became business partners once they realized that they had both pitched a similar idea—the use of mobile phones to help farmers.
Seventy-five percent of the world’s poorest farmers have access to mobile phones, Javaid said. However, many don’t have reliable health care, education or technology. And, they often can’t afford seed, pesticide, and fertilizer. Local middlemen frequently offer loans that charge exorbitant interest fees, Javaid said.
“[Taking loans] forced farmers into a debt cycle which they could not get out of,” Javaid said. “Financial exclusion is the core of the issue, and that’s what we are trying to address with our platform.”
After receiving a grant from the MIT Legatum Center for Development and Entrepreneurship, Ricult built its mobile platform. The company also partnered with multiple microfinance institutions to provide loans. A farmer can register for free with Ricult by phone, where he can order supplies and be referred to a credit partner if he needs a loan. The money is then transferred to Ricult, which manages delivery of the products to the farmers. Ricult earns a small percentage of each transaction.
“The agriculture market is extremely huge,” Unahalekhaka said. “In Pakistan alone, the market size is [estimated to be] billions of dollars. And there are no other players in this area that use technology to disrupt the industry [the way Ricult does].” The platform also uses an algorithm that combines data such as weather and real-time market prices to make recommendations to improve farms’ productivity.
The other members of Ricult are Jiang Xu, SF ’15; Jonathan Stoller, SB ’16, an MIT master’s degree student in computer science; and Philip Huppe, a graduate of the Harvard Kennedy School. There are also seven operations employees in Pakistan.
Ricult was just accepted into the MIT Global Founders’ Skills Accelerator and received $20,000 in funding. The company plans to expand to China, India, and Thailand.