With a background in computer science, Andreas Senjaya looks like any other techie guy, but he is much more than that, as is also the brains behind iGrow: a P2P lending platform for farmers to thrive and grow in the Indonesian agricultural landscape. Find out more about what he’s doing in our interview below.
Can you tell us how iGrow began?
Previously, I tried creating various start-ups with a group of friends, but not all of them succeeded. In 2013, we decided to move into agriculture and experiment with business models until we found the P2P lending model. We created iGrow in 2014 to enable collaboration between products, people, and agriculture.
What is your approach?
After we conducted market research, we decided to focus on agriculture because there’s a big market there. When coming into a new venture, we ask ourselves: “What kind of problems are we trying to solve? And what is the solution?”
Can you tell us how iGrow works?
We encourage farmers in different parts of Indonesia to grow crops and enable them to meet investors and also market needs. There are three important aspects in agriculture: talent/farmers, capital, and the market. So, we try to synergise these three aspects in our platform. Farmers need capital, and when they harvest their crops, they need a market. So they need a sector that can absorb all of their crops.
Can you explain the mechanism of the partnership between iGrow and the farmers?
Our partnership scheme is through a forward contract. So we buy in advance according to an agreed price. We buy whatever crops that are in demand in the market. For example, we partnered up with a ranch producer to produce 100 tonnes per year, but we are paying for that with a discount of 10 per cent from the market price because we bought them in advance.
Later on, these 100 tonnes will be what we sell to buyers. If the farmer produces more than 100 tonnes, he or she can keep the rest, or they can sell it again to us. We are trying to encourage farmers to work harder because the more they produce, the more it will improve their welfare. As to making sure there will be buyers, we secure purchases by partnering up with buyers in advance before we ask farmers to start planting.
Does the platform require the farmers to be tech savvy? If they’re not, how will they use the platform?
The farmers don’t need to use it, only the supervisors do. If the farmers can use smartphones, it will be better so that when there’s an enquiry, they can answer immediately. What we need is just reporting and monitoring, and all appointments with investors are usually undertaken by a supervisor.
What are the challenges you face right now?
The challenge comes more from the farmer’s side. We need credible farmers with credible experience as well as an aggressive attitude when it comes to their planting activities. That is why we conduct many site visits to various plantations in Indonesia, to make sure that crops are consistently produced and will fulfil market demands.
What is your next five-year plan?
Firstly, we want to improve our product in terms of experience and technology in order to encourage farmers to work more effectively and productively. For example, this could be by developing management software to enable them to know their crop situation in real time and become better informed when making future decisions to grow better-quality crops.
Secondly, we would like to go into aspects other than food, such as energy. Three important factors for human stability are food, energy, and water. Now that we have gone into food, we want to enter into energy as well by partnering up with local governments in areas that are lacking energy supplies, especially electricity, to grow crops as well as other biomass that can be converted into charcoal, oil, electricity, gas, and many other sources of energy.
Lastly, we are also starting to go into blockchain to enable smart contracts. Through smart contracts, we can identify all the necessary information about a planting community. If I have a plantation in Manado, I can easily show my ownership data, land condition, and satellite images to whoever I plan to sell my crops to. The price of crops will be based on market mechanisms as well, because smart contracts make everything clear-cut. The transaction will be done on a high-integrity basis because all data are stored safely in the smart contract.