Project Everest

Experiment Results

[Experiment Results]: Agricultural Financing in Fiji December 2018 (1/2)

[Experimental Results]: SoCon Fiji - Agricultural Financing in Fiji December 2018 (½)

Reference the Experiment Design Post

The experiment was focused on validating the assumption that farmers were the appropriate customer segment for the social consulting team to aid with micro-finance. The long-term goal was to discover the pain points of farmers regarding their daily life and access to loans.

 

Reassert Lean Phase:

In Fiji, empathising has focused on famers from the Sigatoka region to determine the appropriate customer segment. The SoCon group in July successfully found that the variable income and lack of finances and financial documents of these farmers were concerned about their ability to repay loans.

 

Assumption:

Fijian Farmers face difficulties managing year-long cash flow

This could be a result of seasonal harvesting, or unpredictable weather, lack of ability to diversify their crops, lack of high yields, lack of savings and equipment.

 

Through empathising with 31 farmers, SoCon should identify specific ‘pain points’ for farmers, including inconsistent cash flow. If this assumption is proven true SoCon can proceed into the following parts of the experiment which involves giving farmers tailored access to microfinance.

 

Results:

Of the 31 farmers it was found that,

 

89% faced issues with managing savings, and have a large range in incomes in the wet season especially.

 

Issues

92.9% specified that a lack of access to finances was a relevant issue;

71.4% said a lack of government support is an issue; and

64.3% stated the weather disrupted farm output.

It is important to note for experiment 2, that the lack of knowledge on farming was not a notable factor.

 

Primary Purpose and Objectives of Loans

50% of farmers stated this would be for equipment and supplies;

21.4% for growing their business; and

21.4% for overheads.

 

These statistics show that theses pain points are because of instability, inconsistent income and fluctuating demand for produce. However, easier access to capital and finance could compensate for the varying nature of an agricultural income by allowing them to increase consistency and quality of outputs, through the use of better machinery and tools.

The success metric or green light has been achieved with over 65% of farmers facing volatile incomes for the above reasons.

 

Validated Learning:

Over the past two weeks SoCon could validate some points with the farmers.

Another struggle was that between the July and December SoCon groups the questions may have varied.

By only using quantitative rather than qualitative data is a limitation and will need to be addressed to further the project.

 

We validated that:

1.  Fijian farmers face difficulties in managing cash flow year long. This is due to   seasonal harvesting, and changing weather conditions.

2.  Inconsistent yearly cash flow can be caused by a lack of government support, pesticides, and lack of access to capital eg. Improved machinery.

Next move:

Things which need to be validated next includes,

1.  Specific barriers to farmers when accessing capital and finance to improve  outputs (competitor analysis of other banks and MFIs operating in the Fiji space)

2.     If farmers received loans

a.     how much would they need?

b.     what would they use them for?

c.     what is their preferred method of payment and loan structure?


By answering these questions, we then would be able to validate the problem and our value proposition within the Fijian environment.

edited on 6th December 2018, 20:12 by Lauren Gallaway

William Lee 11 months ago

Awesome stuff Lauren - would also be great to find out what particular equipment and supplies they would purchase, how much it costs, how it will improve yield, and where they would go buy it from.

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Jess Riley 11 months ago

Status label added: Experiment Results

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Rose Martin 11 months ago

Lauren this is so lush !!!!

Loving the next move points, and think they are all interesting things to progress onto in the future. Are you planning to look at any of these things in your next week and a half ish of project?

I did have a thought around this. I think an interesting next move to potentially add to that list, or something to validate, would be to zone in on what we really mean by 'farmers'. To me this is quite a broad description of a customer segment, and could mean various different things. For example are we looking at subsistence, smallholder, industrial farmers, or even trying to classify them by their specialty e.g. lifestock farmers, vegetable etc. etc. also looking at where they operate and things.

We may find that 'farmers' as a description is too broad, and there are specific issues pertaining to certain fractions of these segments that could better help us understand the problem around this. You could probably make a decent hypothesis by what you've seen out empathising in the past few weeks.

Just a thought anyways. I've tagged Liv because I think she'd be a good person to have a look at this too.

Hope you are well

xx

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