A feasibility study for the establishment of an aggregated agritech database in Uganda

The digitalization of agricultural value chains in Uganda over the past seven years has shown promise for enabling data-driven financing for farmers and other actors. However, despite investments by AgriTech companies and development partners in data collection and platform development, the lack of a coordinated approach has delayed scalability and sustainability. AgriTech platforms largely operate in isolation, leading to high costs and limited value due to fragmented data. This model has resulted in inefficiencies and reduced benefits for smallholder farmers. Could the establishment of an aggregated database offer a solution to enhance access to innovative financial services for smallholder farmers by leveraging their data?

In response to this challenge, UNCDF, in collaboration with the Uganda Bankers’ Association (UBA) and the Financial Technology Service Providers Association (FITSPA), commissioned a study to evaluate the feasibility of creating an aggregated database for agricultural data. The objective of the study is to explore how to facilitate data-driven financing by consolidating fragmented farmer data into a centralized platform.

The key findings of the study reveal a significant need for an aggregated database from both the supply and demand perspectives. Financial service providers (FSPs) are seeking alternative data sources to tap into a lucrative market segment, while AgriTech and FinTech companies have expressed a willingness to share their data for a fee. Nonetheless, challenges related to data quality, standardization, and varying technologies among these companies were identified. The study proposes the use of Application Programming Interfaces (APIs) as a potential solution to these issues.

The operational feasibility analysis indicates that the success of the database will depend on effective custodianship and management. The study presents several scenarios, highlighting the necessity for the involvement of a commercial entity and regulatory oversight. Additionally, securing financial resources for the initial investment and ongoing operations—including the adaptation of existing IT systems to meet data standards—will be critical.

Ensuring data quality and compliance with Uganda’s data privacy laws will also be paramount. The study recommends the implementation of robust procedures to maintain data quality and protect privacy. From a financial feasibility perspective, the study suggests offering incentives to AgriTech and FinTech firms and proposes a subscription-based model for FSPs.

In conclusion, while the study indicates moderate feasibility, the success of the database will ultimately depend on the willingness of stakeholders to share data and the level of initial participation by AgriTech and FinTech firms.