Kenya has the largest GDP in East and Central Africa and one the most conducive environments for private sector expansion in sub-Saharan Africa. But the country still faces challenges related to accelerating growth and boosting shared prosperity. Poverty among rural farmers has been a particularly difficult problem to solve. Traditionally, a lack of reliable market access for smallholder farmers has impeded the economic development of rural areas because farmers often live far from the wholesale markets, and it is not feasible for them to deliver their produce directly. Highly fragmented systems encourage smallholders to navigate through farmer groups or brokers to get their produce to markets. Fluctuating, non-transparent prices are often the result.
Twiga Foods, a Kenyan mobile phone platform that sells bananas and other produce from small-scale farmers to local vendors and markets, pays farmers more and sells to vendors for less—with ripple effects across the entire supply chain. Farmers who sell produce to Twiga now have access to a fair, transparent, mobile marketplace that offers higher prices for their goods. Besides earning more for their crops, farmers can also increase their farms’ productivity as they receive technical advice and financial offerings geared to their specific needs. On the other end of the supply chain, vendors benefit from fast, free delivery of produce.
More than 17,000 farmers and 8,000 vendors in Kenya now work with Twiga—which pays 20 to 40 percent more than brokers and farmer groups and delivers payment in full within 48 hours through mobile money transactions. This helps farmers anticipate income and aids in financial planning.
Twiga also plays a critical role in helping Kenya achieve its sustainable development goals to achieve food security and promote sustainable agriculture. Its robust logistics and distribution system—including 13 collection centers, a distribution center with cold storage facilities, 12 depots, and trucks and vans for collecting and distributing produce—reduce food waste. The smooth logistics system limits Twiga’s post-harvest losses to under 5 percent, compared with 30 percent at informal markets, where farmers typically sell produce.