Why We Invested in Simusolar: Climate-Smart Agriculture for Smallholder Farmers
Small-scale farmers are the backbone of Africa’s agriculture, with nearly 33 million farmers producing about 70% of the continent’s food supply.
However, their reliance on rain-fed agriculture and limited access to resources and technology leave them vulnerable to climate change and unpredictable growing conditions.
Simusolar provides solar-powered irrigation equipment and custom-designed irrigation systems to address these challenges. This empowers small-scale farmers to adapt to changing climate, increase their yields, and reduce reliance on expensive and environmentally harmful fossil fuels.
Prior to Simusolar, farmers relied on petrol-powered irrigation systems, but these proved increasingly unreliable due to the rising cost and inconsistent availability of fuel.
Additionally, their planting schedules were often dictated by the unpredictable rainy seasons.
Recognizing many farmers’ financial constraints, Simusolar finances agricultural equipment with flexible payment plans tailored to individual needs. This innovative approach removes barriers to accessing essential farming equipment like their solar irrigation systems.
Simusolar is expanding across East Africa, aiming to transform agribusiness and food systems throughout the region.
Impact with Simusolar
Founded in 2014, Simusolar has served over 1,500 families in Tanzania alone. Customers using Simusolar’s solar-powered irrigation systems spend on average of 42% less than they did on petrol-powered systems, and 72% report increased incomes due to higher yields and lower operational costs.
Simusolar’s impact extends beyond cost saving:
- Financial Inclusion: Pay-as-you-go financing options and cashless payment systems provide small-scale farmers with access to asset financing for essential farming equipment, such as solar pumps.
- Increasing incomes: With Simusolar, farmers can break their dependence on seasonal rains by growing and harvesting crops year-round, transforming their farms into profitable enterprises. Farmers can invest in other high-quality inputs with the additional income, creating a cycle of increasing profits and yields.
- Climate change adaptation: By reducing farmers’ reliance on unpredictable rain patterns, Simusolar helps rural communities adapt to climate change and enhances food security in emerging markets.
- Improved yield: Solar pumps provide consistent crop irrigation, allowing farmers to boost their yields all year round.
Smart Asset Financing™: Accelerating Growth
Untapped Global is scaling Simusolar’s operations by financing their solar pumps through our Smart Asset Financing model. “Simusolar is excited to partner with Untapped to drive growth,” says Michael Kuntz, Co-Founder of Simusolar. “We share a data-driven approach and provide Smart Asset Financing, albeit at different levels of the value chain. Our focus is on serving smallholder farmers in Tanzania and Uganda, where credit options are limited due to the nascent financial services sector.”
Michael adds, “By investing in a platform that offers granular insights into customer usage and payments, we can provide flexible financing options, diverse payment plans, and customized equipment packages to smallholder farmers at scale.”
How does Smart Asset Financing work?
- Data-driven due diligence: We finance smart assets that generate real-time data and digital revenue streams, which we capture through payments and data integration. By integrating with partners like Simusolar, we track asset usage, location, and revenue data. This data allows us to assess the financial and operational performance of each asset and asset class, enabling us to monitor the health of our portfolio in real-time.
- Measuring impact: We measure impact as the revenue generated by the assets’ end users, such as small-scale farmers. Real-time revenue data allows us to track how much each asset generates for local entrepreneurs across different asset types and countries.
- On-demand capital for scale: Over time, this data-driven approach, known as ‘rolling data-driven due diligence,’ enables us to provide local businesses with faster access to on-demand capital to scale their operations.
About Untapped Global
Untapped Global creates shared prosperity by unlocking economic opportunity where it’s needed most.
We play a catalytic role in financing tech-enabled companies in emerging markets. Our financing approach delivers competitive returns, and measurable impact for global investors.
For more information, reach out to our team at info@untapped-global.com
