Pathways Technologies unveils AI-powered credit scoring to boost farmer financing
Joel Onditi, CEO Pathway Technologies
Pathways Technologies has unveiled an artificial intelligence (AI)-powered credit scoring solution aimed at increasing access to loans for small-scale farmers. The initiative, which was launched in collaboration with Fortune Sacco, the Kenya Agricultural and Livestock Research Organization (KALRO), and the German development agency GIZ, seeks to address the long-standing challenge of limited financial access within the agricultural sector.
Speaking during the launch, Pathways Technologies CEO Joel Onditi emphasized the need for innovative solutions to help farmers secure funding without facing rigid borrowing requirements.
“We are building solutions that solve real-world problems in Africa today. Currently, farmers can’t easily get loans because all the lenders think that farmers are very risky. We are building a solution that will enable SACCOs and other lenders to drop some stringent requirements like guarantors and collateral,” said Onditi.
By leveraging AI and data analytics, Pathways has developed a credit scoring system that enables lenders to assess farmers’ creditworthiness based on their financial behavior and production patterns. The new system allows financial institutions like Fortune Sacco to extend loans to more farmers by eliminating bureaucratic barriers.
“When we began the project, out of 100,000 farmers, Fortune Sacco was only able to lend to 20 percent due to a lack of data. With our solution, the Sacco now has the opportunity to lend to over 60 percent because we are providing the right data and insights,” Onditi added.
Timothy Muthike, Deputy CEO and Head of Finance at Fortune Sacco, acknowledged the inefficiencies of traditional loan processing methods, which often rely on physical forms and lengthy manual assessments.
“Physical forms, which are very bulky, make decision-making very tedious and lengthy. With the adoption of technology, we are looking to have most of these decisions made by a machine and eliminate some of the unnecessary bureaucracies associated with lending, and also human face and human bias,” he said.
Muthike expressed optimism that the technology would empower small-scale farmers by granting them timely access to credit.
“We hope that over 60 percent of small-scale farmers will be able to access credit, timely, and in the right amount,” he added.
