Animal business just gone digital
Using technology to enable farmers access to capital

As featured by People Daily,

Growing up, Bernard Njathi saw his parents, uncles, aunties and family friends sell off their livestock just to afford school fees, pay medical bills and support their livelihoods. He noticed the animals were sold at a lower price and the farmers would in the end make a loss. Worse, the farmer would lose his livestock, an income earner and be unable to replace the herd they’d sold off.

“I felt that this was a problem and it kept on promoting poverty. It was not a sustainable way of doing the livestock business,” he says.

Years later, in the late 2020s, the experiences drove him to start Lofte Kesho Technology, a web-based software and hardware to assist farmers access capital against their livestock. It also offers collaboration between farmers on the one hand and veterinary and financial services such as insurance and loans on the other.

“Lofte Kesho Technology assists farmers to identify and know the worth of their livestock, and this in turn creates a farmer-animal profile, which is insurable and lendable to by financial services providers. Our technology also collects and updates records such as production, health and nutrition of the animal. In phase two of this project, we are targeting an advanced solution that will allow tracking and tracing of the herd in real time. We will also support the ability to read the animals bodily activities, such as temperature and when on heat,” he explains.

Unlocking dead capital

Bernard observes that smallholder livestock farmers are not necessarily poor, but they lack the ability to unlock the dead capital trapped in their assets, which in this case are the livestock. The Movable Property Security’s Rights Act of 2017 states that animals are an asset and can be used as collateral to secure a loan. With this in mind, he has been able to create an ecosystem through the mobile app that will unlock capital for farmers thus fighting poverty.

“We also created an ecosystem that promotes livestock best keeping practices, so as to keep the farmer going in the business of livestock. Our smallholder livestock farmers are challenged with information and best practices of sustaining the business such as best practices towards artificial insemination, milk production, beef fattening and animal health. Not only do we unlock dead capital, but also train and support the farmer to have a sustainable business. All the programmes and initiatives contribute to the United Nations sustainable development goals of no poverty, zero hunger and decent work and economic growth,” he says.

Tamper proof tags

In partnership with veterinary associations, insurance companies and financial institutions, they first approach farmers in an organised group set up and carry out extensive and thorough farmer education programmes. With the farmer’s consent, they tag the livestock with a tamper proof and laser printed ear tags, value the livestock and provide a health and valuation certificate. They are also available on phone to provide these services.

Explains Bernard: “At this stage we have done a thorough ‘know your cow’ and ‘know your animal’, and our financial experts and risk experts have ascertained that the profile (farmer and livestock) is insurable and lendable. We then provide the financial services, which are livestock insurance for mortality risks and 50 per cent loan of the value of the cow. Later on, we progressively visit the farms and update production, health and nutrition data into our software for analysis and for risk mitigation as this animal is an asset. Our health, nutrition and production officers provide in-depth analysis of the animals pattern and create recommendations.”

Starting out was tough since Bernard had it rough looking for capital. They began first with his personal savings then later on, began utilising his partner’s funds before family and friends started chipping in. Also, learning all the complexities that come with a new and highly untapped sector was another challenge.

“Creating multi-lateral engagements across various partners was also an uphill task and the new concept being a new thing also made it difficult for our many partners to understand what really we wanted to achieve. The Covid-19 pandemic also slowed down all aspects of scaling up as our actual business involves being at the farms across the country and talking to farmers,” he adds. 

Despite of this challenge, he is glad that the business is up and running with various partnerships across Narok, Kiambu, Murang’a and Nyeri. Since it’s a “near-new” business model, farmer education is key and this also is time consuming and capital intensive. Other challenges are weak livestock policies as far as animal identity and government support are concerned.

He says, “Some of the weak policies includes the absence of a national and county animal registry, which makes it challenging to administer our Lofte Kesho Technology services. A practical animal registry would be important in determining livestock population, diseases, breeds and promoting a standardised animal valuation template for all animals across the country.”

Lofte Kesho is addressing this issue in it’s own small way. Using technology and strategic partners, they have also approached county governments and strategic livestock stakeholders in an effort to address this policy and animal identification challenge. Recently, Lofte Kesho won a European tech-based competition that was organised by Glovo, Boston Consulting Group, Ashoka and Esade Business School from Spain.

Third eye analysis

“We were optimistic that our social impact and use of technology to solve a core issue would win us this competition. This will help us analyse the business from a third eye and put firmer structures that will contribute to its growth and more so add realistic impact to smallholder livestock farmers,” says Bernard. “We are excited to compare notes with experienced business leaders who have a deeper understanding of the complexities of running a start up in a unique under developed sector”.