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  • Writer's pictureConnar Stratton

Startup Idea #15: E-KYC for rural farmers

Updated: Dec 21, 2022

Idea: An e-KYC startup for farmers in rural developing countries. Using community agents to verify farmer identity and credibility in order for them to get registered for banking services.

Problem: In Africa 57% of the population remains unbanked, not because of their lack of interest in banks, but banks lack of interest in them. Due to poor credit scoring infrastructure in developing countries, banks don't have visibility on their risk profile and consequently have limited interest in engaging with them. Farmers and other small businesses either don't have credit available, or need to approach loan sharks to get the capital required to support their business. The first step to getting them loans is eKYC (Know Your Customer)- proving that they are who they say they are. Without reliable government databases, it's not always easy to prove your identity.

Insight: Not yet. This idea is still very early

Validation method: This is a two-sided business. You need farmers who are willing to get their identity verified, and enterprises who need eKYC for their customers (usually banks). I would start by getting validation from the banks and regulators. This will be a slow validation process. LinkedIn still has low penetration in Africa, and it's not very clear what the best customer acquisition channels are. So you may need to do sales to these banks through referrals.

Notes: The business model itself is one that has already been used with some success in parts of India. For the KYC itself, you would have two stages. Stage 1 involves verifying their identity card, home address, electricity bill or social security bill. You should eventually be able to create infrastructure to automate this. Stage 2 would involve peer granters. Each customer should have at least two peer granters who can verify the individual's identity in person, but also peer pressure the individual to make repayments. More developed countries could do this over video.

Why am I doing this? I’m an innovation consultant who helps businesses build new products, and ventures. And I want people to see how easy it is to build, and validate an initial business idea. Hopefully inspiring them to start their own business.

Am I worried that people will take the ideas? I hope they do. These ideas will hopefully make the world a better place. Just remember, “Ideas are cheap. Execution is everything”. What’s most likely is that within a month of testing the idea, the idea would have completely pivoted, but this is a starting point.


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