“Scaling the adoption of digital innovations in agri-finance remains a challenge in Africa”, Sanne Steemers, President, Rest of Africa at AFEX

Focus Topic:
Capacity Development, Information Technologies

In the latest rendition of SAFIN’s Perspectives series, Sanne Steemers, President, Rest of Africa at AFEX, tells us about how addressing the adoption challenge facing digital innovators across Africa can strengthen agricultural value chains and improve entry or financing opportunities for agricultural SMEs and farmers in the region. AFEX is a platform that enables efficient commodities trade in Africa. AFEX solutions start at producer level, ensuring improvement in productivity and livelihoods while building up commodity volumes of the right quality and quantity for local and regional trade.

Photo: IFAD/Bernard Kalu


AFEX has experienced significant growth since it first joined SAFIN in 2018. What would you say have been the main levers of growth in AFEX’s efforts to help Africa feed itself?

At AFEX, we like to look at our work as being at the intersection of agriculture, finance and technology. This outlook, which we adopted early on, has been pivotal to our successes, allowing us to create solutions that are both inclusive and efficient. Understanding the fundamentals of agriculture and directing our early investments to infrastructure, such as warehouses across Nigeria, has been an important lever of growth. Securitizing and layering on financial market structures to unlock capital from different sources has also been vital. For example, our spot contracts are backed by physical commodities and then traded on our exchange platform by retail and institutional investors. Technology has also been fundamental to our process. It has allowed us to introduce traceability and transparency that improves risk management, while also enabling us to connect the supply and demand side of the market seamlessly.


You recently joined AFEX as its President for the Rest of Africa. What plans do you have to scale operations across the continent?

The model that AFEX has deployed worked well in Nigeria, and the first part of our strategy is to replicate the key learnings from those operations as we expand across Africa, such as deploying storage infrastructure close to key agricultural production locations. As we expand into new markets, we will start by offering end to end solutions to farmers, as well as supplying traceable and quality-controlled commodities to processors and international buyers.

We have entered two East African markets – Kenya and Uganda – and have plans to enter Benin, Côte d’Ivoire, Ethiopia, Ghana, Tanzania, Togo and Zambia within the next few years. We expect to create regional markets, where we can balance demand and supply through intra-African trade. For example, the harvest season for maize is different in Uganda and in Kenya. By facilitating cross-border trade, we can supply commodities throughout the year in both countries. We will also expand to new commodities sectors. We are entering into the coffee value chain in East Africa over the next few months. We will continue to adapt our model to fit local contexts.


What is the role of digitization in AFEX’s operations and how do you see it evolving? How do you see the broader landscape of digital innovations in agri-finance across Africa evolving over the next few years?

Digitization has been central to AFEX’s model. Our technology systems, WorkBench and ComX, underlie our work, enabling value chain management and access to capital and markets respectively. As we scale, we think about WorkBench as a tool not only for our own operations but a ‘software as a service’ that other agricultural SMEs can access to manage their own operations. This, in turn, contributes to a growing database that can give value chain players a better picture of the food system on the continent. Digitization also enables us to provide an increasingly important level of traceability and transparency being required in trade, allowing us to trace each bag of commodity to farm and farmer, and complying with international regulations for due diligence.

In the broader digitization landscape in Africa, the question of adoption continues to be essential. Increasing the adoption of digital innovations can strengthen existing interventions in various agricultural value chains as well as improve entry opportunities to new agricultural SMEs that can leverage these innovations to drive and deliver their own services. Digital innovations can also strengthen financing where we are able to better onboard and identify individual farmers and generate their credit profiles.


AFEX recently launched operations in East Africa. What elements of your work with agri-service providers (ASPs) do you hope to replicate in the region?

With the ASP model, we identify small and medium-sized agribusinesses that receive financing and process support from AFEX to provide input financing bundles to their own farmer network. They then pay back the loan amounts to AFEX at the end of the contract period. Today, we have a few large-scale farmers in Kenya with whom we work the same way that we work with ASPs. In Uganda, we have identified several farmer groups – cooperatives, micro-finance institutions, SMEs and others – that we can provide with the same tools and services that we offer ASPs. We also aim to support them with market access and storage at the end of each season, which is an area that poses a significant challenge in East Africa.


Do you see a role for mobile money solutions in AFEX’s digital operations in East Africa? How would this impact agricultural SMEs and farmers’ organizations?

Put very simply, yes. In each country, we will select payment solutions that fit the market. For example, in Kenya most of our farmer payments are made using mobile money. The goal is to build trust while establishing relationships with farmers and farmers’ organizations. We have seen great benefits in doing this in Nigeria, having the farmers grow with us and become more embedded in the country’s financial ecosystem, and thus truly financially included.


Sanne Steemers, President, Rest of Africa, AFEX

Sanne Steemers is the President, Rest of Africa at AFEX. Building on the impact of AFEX in Nigeria, she is responsible for rolling out infrastructure, markets, and capital to smallholders and processors across Africa, starting from Kenya and Uganda. Having twenty years of experience in corporates and as an entrepreneur, Sanne has worked with many organizations in over fifty countries.

This interview is originally produced by Safin