“Fintech Helping Smallholder Farmers in Asia with AI-Powered Solution”
Ricult is a multidimensional artificial intelligence-powered solution seeking to empower smallholder farmers in Asia, in particular through a digital financial technology solution. Protecting its algorithms with intellectual property proved essential for the company.
Usman Javaid is the CEO of Ricult International and CEO of Ricult Pakistan. After studying engineering in Pakistan, Usman marketed fertilizers for Exxon, before joining Nestle. In this position, he was part of the largest non-smartphone mobile banking service. That experience made him realize how simple technology can be used to serve the underprivileged segment of the population. His exposure to the agricultural sector also gave him a clear idea of the challenges faced by smallholder farmers.
MIT alumns introduce Fintech in Agriculture
In 2014, he resigned from his job and enrolled at the Massachusetts Institute of Technology (MIT) to pursue an MBA in Innovation and Global Business, with the idea to find a way to alleviate smallholder farmers’ challenges. At MIT he met with Aukrit Unahalekhaka, from Thailand, who came from a family of farmers and shared the same goals. Jonathan Stoller, and Gabriel Torres, also MIT Alums, soon joined them.
Their project of creating a fintech for agriculture, using data analytics to help smallholder farmers was selected to be part of the MIT Accelerator Program, and provided the team with initial seed money. The project drew the interest of Asian investors and as the project was finalized, the team started to raise funds from institutional investors.
Ricult comes from the middle syllables of the word “agriculture”. The company, a spin-off from MIT, was established in 2015 and headquartered in Boston. Ricult later branched out in Pakistan, and in Thailand, managed by Aukrit. Jonathan is the Chief Technology Officer, and Gabriel, the Chief Strategy Officer. Ricult will launch its services in Viet Nam in January 2022.
Fintech Solution facilitate farmers’ access to Capital
One of the largest problems that farmers face in the developing world, according to Usman, is access to capital. This lack of access to formal banking channels makes it incredibly difficult for those smallholder farmers to get capital at affordable rates. “They end up being dependent on informal loan sharks, and that maintains them in a perpetual cycle of poverty”, he said. “They keep on borrowing and are unable to repay their debts.
Typically, without access to formal banking, farmers go to intermediaries “middlemen” who provide farm inputs on credit. Those inputs are of sub-quality and charged at a higher price than the market price. When the crops are ready, he explained, the intermediaries would demand the first right to procure the crop. “This is how people get stuck”.
Data Analytics Opens Door to Banking System
If a farmer works with Ricult, the company connects him/her to a bank that will provide a loan. The banks’ trust is based around data analytics, and Ricult’s credit story, Usman said.
Ricult then partners with input companies to make sure that the farmer will get the best quality product available. The company then helps the farmer throughout the crop cycle, monitoring his/her crop remotely, and giving him/her insights on how to improve his/her yield. Once the crop is ready, Ricult facilitates the direct selling of the crop to a couple of mills, without any intermediaries.
The company’s vision, explained Usman, is to make Ricult “the preferred digital financing solution for farmers.” “We are trying to use technology to address the core issues of why banks won’t lend to farmers.” “If we can help the banks to adopt our solution, we open up an alternative for the farmers to actually get mainstream banking, especially for people who are unbanked or excluded from the banking system.”
AI-powered Apps for Farmers
Usman described Ricult as a data analytics company. It sources data from multiple stakeholders, such as farmers, remote sensing, partner institutions, and input supplies companies. Ricult then runs that data through algorithms to constantly refine its products.
Ricult X Dashboard - leveraging Data Analytics in Agriculture
Ricult’s main product is Ricult X Dashboard. This is where the company visualizes and presents its entire analytics for the users of banks and agribusinesses. The Dashboard includes state-of-the-art analytics rooted in Machine Learning and AI that helps in generating both predictive and diagnostic insights, Usman explained.
Ricult Farmer App – harnessing Big Data in Agriculture
Another product is the “Farmer App”, which helps farmers improve their productivity and profitability, by providing them with information through a mobile app. Ricult also commercializes the “Field Agent App”, which helps field agents of different organizations like banks and mills, to collect data and use those insights at the local level.
According to Usman, some 300,000 farmers are currently using the Farmer App in Thailand, and 200,000 in Pakistan. “Our ultimate goal is that every farmer who has a smartphone uses the app.” Usman is quite hopeful that Ricult will hit the million farmers' mark in 2022.
IP Essential to protect Frontier Technologies
Ricult owns intellectual property on all of its key algorithms as well as its name and logo. All are protected in the U.S. Usman underlined the crucial importance of IP. “It is extremely important to protect your IP since investors can get wary of startups that cannot protect proprietary technology.”
Resolving Challenges in Agriculture with Ricult
“We feel the biggest problem to solve is access to finance for smallholder farmers, and if this issue is not addressed we won’t be able to address any other problems in agriculture,” said Usman, adding “we want to keep building products which can facilitate this, and branch off to other countries in Asia”.
The Ricult products are only available to farmers equipped with mobile phones. According to Usman, in Thailand, the smartphone penetration for farmers is about 50 percent and growing every year. In Pakistan, only 25 percent of farmers have a smartphone but it is growing very fast. With 12 million farmers in Pakistan, if those 25 percent adopted Ricult App, it would touch some 3 million farmers, he said, remarking that the younger generation of farmers are Internet users, with TikTok and YouTube and inclined to have smartphones.
