Request for Applications: Pacific Agri-MSME Digital Innovation Challenge

Deadline: 12-Jun-23

UNCDF has launched the Pacific Agri-MSME Digital Innovation Challenge that supports the development and expansion of agribusiness models and solutions.

The goal is to support the development and growth of digital agribusiness models and solutions to alleviate financial and other constraints for agribusinesses and smallholder farmers, particularly women and youth, in the region following the disruptions caused by COVID-19 in agricultural value chains.

The Pacific Agri-MSME Digital Innovation Challenge will co-fund private sector innovators to pilot and scale digital solutions in agricultural value chains for the growth and resilience of smallholder farmers, focusing on women and youth.

Focus Areas

• Access to Markets
  • Challenges: Most smallholder farmers and Agri-MSMEs struggle to access markets in a fair and efficient way as they operate in informal value chains with poor access to markets and buyers. Furthermore, they are heavily dependent on intermediaries to sell their produce which leaves them vulnerable to volatile prices and high commission fees. Smallholder farmers and Agri-MSMEs also tend to have limited access to market information, which affects their ability to sell their produce at an optimal price even when they are operating in the formal sector.
  • Objectives: Solutions that promote direct linkages between the farmers and the domestic/ international buyers, access to e-commerce platforms/ digital marketplaces, remove the need for intermediaries, increase quality control measures, and/or digitize last mile procurement and communications of export markets and enterprise services (B2B2C)
• Access to finance/capital
  • Challenges: Most smallholder farmers globally have limited access to capital and formal financial services such as credit, loans, savings, and insurance. This can have considerable implications for the farmers as it can limit their ability to invest to improve their livelihoods and reduce their resilience to external shocks such as economic downturns or climate shocks.
  • Objectives: Investing in digital payment/ finance which improve the accessibility to and usage of financial services amongst the agricultural value chain actors including smallholder farmers and Agri-MSMEs. The solutions should be customized for the local conditions to and deploy innovative ways of leveraging technology, data, and/or existing value chain relationships to plug the gaps that are preventing access to capital and financial services including savings, credit, loans, payments, insurance, and investment to various value chain actors.
• Access to inputs
  • Challenges: Smallholder farmers’ and Agri-MSMEs’ limited access to capital and financial services also leads to other challenges such as the lack of access to quality agricultural inputs (seeds, fertilizers, and pesticides), and assets like machinery, irrigation systems, and cropstorage. The risk of purchasing counterfeit or substandard inputs, such as seeds, fertilizers, and pesticides is high. Poor-quality inputs can lead to reduced yields, lower crop quantity, and increased costs, all of which can undermine the productivity and profitability of the farmers.
  • Objectives: Digital solutions that improve the efficiency and effectiveness of the various value chain stakeholders to trade agriculture inputs and enhance access of smallholder farmers to quality inputs in a competitive price. Some examples of these solutions include precision farming tools, mobile applications for farm management, and digital marketplaces for agricultural inputs.
• Efficient business processes
  • Challenges: Smallholder farmers and Agri-MSMEs in the Pacific Region operate their farm and conduct business through primary production and selling methods. They lack the technical skillset of utilizing computer applications and financial management skills to build forecasting models, logistics management, digital marketing, and skills to forecast cash flow needs and accounting. Often, it is due to the lack of demonstrable financial records that they are unable to qualify for working capital loans and other sources of capital from formal financial institutions.
  • Objectives: Solutions that enhance business process efficiency, build skills, financial literacy, and technical knowledge of production for agriculture value chain actors, particularly those employed in the informal sector.
• Access to information & skills
  • Challenges: Smallholder farmers and Agri-MSMEs tend to rely on outdated farming techniques and lack access to critical information (weather, market, prices, and support services) and skills that could help them better plan their farming activities, improve on-farm practices, optimize use of inputs and reduce waste, reduce inefficiencies, and increase the per hectare yield and overall profitability. The information asymmetry for rural smallholder farmers and AgriMSMEs lead to weak pricing and higher transaction costs, which adversely affect the profit margins for smallholder farmers and Agri-MSMEs.
  • Objectives: Solutions that leverage digital technologies to improve the access to reliable information for smallholder farmers and Agri-MSMEs and help them make informed decisions about their operations and build their skills. Solutions include crop monitoring and analytics platforms, mobile applications for farm management, digital soil sensors, mobile-enabled information services (ex. dissemination of key information to farmers such as agronomic advice, market prices, and certification standards), digital weather and climate information services, and other reliable information extension services.

Funding Information

• The fund will provide co-funding risk capital in the amount of US$40,000 to US$80,000 to selected partners in the selected Pacific regional countries through performance based grants

Eligibility Criteria

• Eligibility requirements
  • Entity registration
  • The applicant/ lead applicant must be a registered entity.
  • The applicant/ lead applicant must have audited financial statements for at least one operating year; if audited financial statements are not available at the time of application, the applicant must provide the latest management accounts at the due diligence stage and provide UNCDF with audited financial statements during the partnership.
• Country of Operation
  • The applicant can be registered in any of the following countries: Fiji, Papua New Guinea, Samoa, Solomon Islands, Vanuatu, Kiribati, Tonga, Timor-Leste, Federated States of Micronesia, or Republic of the Marshall Islands. However, the interventions – irrespective of the applicant’s registration country – should have their project and solution implementation in any one of above-mentioned selected countries of the Pacific Region. They strongly encourage Pacific Region-based businesses to apply.
  • Entities registered outside of Pacific Region are required to have at least one local partner that is registered in any one of the abovementioned countries of the Pacific Region and apply as a consortium.

For more information, visit UNCDF.