Across Africa, farmers stand on the frontlines of climate change with food security and their livelihoods threatened by unpredictable weather patterns, droughts, and devastating floods. Yet, while the need for climate adaptation grows more urgent, access to financing remains painfully out of reach. According to the World Bank, Africa suffers from one of the world’s largest finance gaps with some regions seeing shortfalls as high as 88%. A challenge even more acute for smallholder farmers who are often excluded from formal credit systems due to a lack of collateral, limited financial records, or geographic isolation.
Amid this crisis emerges fintech as a game-changer. It has an unparalleled capacity to leverage mobile technology, digital platforms and support alternative credit models, allowing farmers to access the resources they deserve to adopt climate-smart agricultural practices. This digital dawn marks a turning point for fintech. It’s fascinating to watch something long associated with flash gadgets and hyper-competitiveness quietly but resolutely break down traditional barriers to financial inclusion, help those often overlooked by tech innovation and aid African farmers in building resilience against an increasingly unpredictable climate.
For too long, traditional finance systems have excluded smallholder farmers, as they often lack the collateral, credit history, or proximity to institutions required to access formal loans. As a result, millions of farmers have been left without the capital needed to invest in climate-resilient practices, leaving them vulnerable to extreme weather, soil degradation, and crop loss. But innovations in fintech are changing that. Mobile-based lending platforms can now provide farmers access to affordable and tailored loans that meet their needs. These loans are increasingly used for investments to improve climate resilience through improvements like using silage bunkers to store animal feed during droughts, terracing to prevent soil erosion, and pest management solutions to protect against climate-driven pest outbreaks.
Even farmers in remote areas are now able to be assessed for creditworthiness with the use of drone technology, farm-mapping, or satellite. As a result of innovations across fintech, banking and technology, financial institutions are now able to provide loans to worthy individuals and businesses across Africa, who traditionally were inaccessible or in some cases even unknown to traditional banks. This, of course, creates an opportunity for investors globally, looking to bolster their returns while making tangible impacts on sustainable development in Africa.
With the popularisation and advancements in artificial intelligence (AI) and data analytics, fintech companies are going even further by tailoring their financial products to the end-user and assessing risks more accurately. Traditional credit assessment methods have long excluded smallholder farmers and derided their lack of formal financial histories. However, AI-driven models can analyse alternative data sources, such as mobile money usage, transaction records, and satellite imagery, which thus evaluates creditworthiness, increasing access to loans.
Beyond credit scoring, satellite-linked services are useful in providing real-time pest and weather alerts, helping farmers to manage risks. For example, the Pest Risk Information Service (PRISE) combines temperature data and weather forecasts with computer models to send farmers mobile alerts about potential pest infestations, enabling timely interventions, with huge levels of success – integrating PRISE with SMS services saw farmers reporting a 109% increase in maize yields and a 70% reduction in pest damage.
Not only is fintech playing a crucial role in advancing climate-smart agriculture it is also directly contributing to global climate goals. By improving farmers’ access to funding for sustainable solutions, fintech is driving progress towards achieving the UN’s Sustainable Development Goal (SDG) 2, Zero Hunger, and SDG 13, Climate Action. Due to fintech’s innovations, farmers and financial institutions alike can now work in tandem to improve food security while reducing emissions across Africa.
These efforts align with the priorities outlined by UN Secretary-General António Guterres ahead of COP30, emphasising the need for robust action plans that support adaptation and resilience in vulnerable and overlooked sectors like agriculture. By integrating fintech solutions into agricultural practices, stakeholders can accelerate progress toward these global goals.
As climate pressures worsen, fintech offers a powerful pathway to resilience for African farmers. By unlocking access to finance and data-driven tools, fintech is not only transforming agriculture but also helping to create a more food-secure and climate-ready future.
By: Jonty Rawlins, Director of Sustainability at Platcorp Group