This post is written by USAID Private Sector Engagement.

As one of Uganda’s fastest-growing seed companies, Equator Seeds Limited (ESL) nearly doubled its business from 2016 to 2017. With rapid business growth, the complexity of ESL’s cash transactions across several warehouses and processing plants also grew. The company’s accelerated expansion, while promising, required additional business skills in maintaining record keeping and cash payments to its smallholder farmers. Improving the company’s ability to track inventory and payments would help prevent significant financial losses. Managing a widespread network of contract farmers, agro-dealers and sales agents, ESL’s success has a multiplier effect on the Ugandan economy.

Meanwhile, Uganda’s population is doubling in size every 16 years. Robust job creation is essential to absorb youth entering into the job market and to curb an already high rate of youth unemployment. USAID, through the Feed the Future Youth Leadership in Agriculture (YLA) activity, sought to increase economic opportunities for Ugandan youth in agricultural-related fields. The activity aimed to increase their incomes and build entrepreneurship, leadership and workforce readiness skills. 

The company approached YLA and shared their challenges. Together, they co-created a partnership to help ESL transition to digital systems, employ more young workers and establish a child care center for female workers.  

As part of the digital transition, YLA helped ESL select and set up a software platform and digital scales to improve the company’s ability to monitor inventory and seed procurement. The company used this data to accelerate its procurement cycle, increase its demand for seed from its smallholder suppliers and more accurately forecast that demand. 

YLA and ESL selected an additional digital system to establish profiles for the 100,000 smallholder farmers who were now accessible through the software platform. ESL hired 250 community-based facilitators (CBFs) — primarily young women — to create the smallholder farmer profiles and acquire new sellers for the company. The company provided CBFs the opportunity to find new direct markets and receive commissions for the farmer groups they linked to ESL. 

“After I deliver my produce, I receive my money timely on my mobile phone. It is very convenient,” said Atim Sharon, a 30-year-old youth farmer from Ayee sub-county in Kole district who has benefited from the digital payment platform.

ESL used the data from its software system to secure credit and accelerate sales by 20 percent in the second half of 2019. By 2020, ESL began paying its casual laborers who sort seeds at its warehouses with mobile money, producing a cost savings of 32 percent. 

The partnership enabled ESL to reduce the risk of fraud and losses, provide a clear accounting process to harmonize their systems with branch offices, streamline payments and improve trust with farmers. It also allowed the company to create employment opportunities for young people, particularly women, which in turn served YLA’s goals to empower the youth workforce, boost the economy and promote gender equality and social inclusion in the agriculture sector.

Alia Franco, ESL partnership manager, said, "the MobiPay platform helped us to track transactions in real-time. It increased trust between the farmers and our company."

The CBFs continue to benefit as well, with some opening building storage facilities and spraying businesses to earn more income.

While the rollout of digital tools in ESL was not without its challenges — namely, issues with data collection — the company plans to continue iterating and using supply chain management and digital financial services products to continue their journey towards becoming a data-driven organization. With YLA’s support, one of Uganda’s most promising companies has successfully navigated a critical growth phase, and 250 Ugandan youth now have the essential business skills to be employable in the country’s tight job market. 

YLA is an activity of Feed the Future, the U.S. Government’s global hunger and food security initiative.