Nigerian agricultural technology startup UfarmX has facilitated more than $6.8 million in commercial transactions across Nigeria, Senegal and Liberia, using blockchain-based records to connect smallholder farmers with supply markets and financial services.
The platform currently supports more than 17,000 farmers who have been assessed through its credit-scoring system, alongside a network of retail partners. UfarmX provides farmers with operational data that can help them manage agricultural activities, access farming inputs and obtain credit without relying on conventional collateral requirements.
The company has developed a model that seeks to address limited access to formal agricultural financing in African markets. Rather than relying primarily on traditional banks, UfarmX works through insured retailers that extend credit to farmers based on data generated through the platform.
The retailer-based lending system has recorded a net default rate of 1.17%, according to the company. UfarmX initially used direct lending as a test of its underwriting technology before moving toward the current model, in which local retailers serve as the direct providers of credit.
UfarmX Builds Data-Based Lending Infrastructure
The company’s chief executive, Alexander Zanders, said the initial lending experience demonstrated that farmers were capable of repaying financing while improving yields and increasing revenues. However, he indicated that the traditional banking system was too slow and cumbersome for UfarmX’s intended business model.
The startup subsequently shifted toward working with local retailers, allowing them to use UfarmX’s data and credit assessments when providing financing to farmers. This structure reduces the need for a bank to participate directly in individual transactions while maintaining a data-driven approach to assessing borrowers.
UfarmX plans to launch a credit-scoring API by the end of the year, allowing banks and other financial institutions to use its agricultural underwriting infrastructure when evaluating farm loan applications.
The planned API is expected to broaden the company’s role beyond direct agricultural commerce and retail-based lending. UfarmX has compared the proposed system with the role played by major US credit bureaus, including Equifax and Experian, although its focus will be specifically on agricultural borrowers and the data required to assess their financing needs.
The company is already engaging with financial institutions and agricultural input producers ahead of the API’s release. Selected partners are expected to receive early access as UfarmX prepares the infrastructure for broader commercial use.
Expansion Into East Africa
UfarmX is also preparing to enter Kenya during the fourth quarter, marking its first expansion into East Africa. The company previously expanded outside Nigeria by entering Senegal in 2023, while Liberia is also part of its current commercial footprint.
The Kenya launch would extend the company’s agricultural credit and data infrastructure into another major African farming market. The expansion comes as financial technology companies increasingly seek to use alternative data to serve customers who have limited access to conventional banking services.
UfarmX’s approach centers on converting transaction and farming data into credit information that can support lending decisions. The model could potentially give financial institutions greater visibility into smallholder farmers whose financial histories may not be adequately captured by conventional credit systems.
Agriculture Viewed as Commercial Opportunity
Zanders has positioned UfarmX’s data infrastructure as a tool for attracting commercial investment into African agriculture rather than depending primarily on philanthropic funding.
The company argues that agriculture across the continent represents a substantial, underdeveloped credit market. Its strategy is therefore based on demonstrating that agricultural financing can be assessed, managed and scaled as a commercial activity when lenders have access to more detailed information about farmers and their operations.
By combining farmer credit scores, retailer networks and transaction data, UfarmX aims to create an infrastructure that can connect agricultural borrowers with commercial capital while giving lenders additional tools to evaluate credit risk.
The planned API represents the next stage of that strategy, potentially allowing UfarmX’s underwriting technology to be integrated directly into financial institutions’ agricultural lending processes.
As per reports, the startup’s expansion and technology development reflect a broader effort to formalize agricultural credit markets in Africa, where smallholder farmers often face significant barriers to obtaining financing. UfarmX‘s ability to maintain low reported defaults while expanding its network will likely be central to determining whether the model can scale across additional markets.
