Why We Invested: Meridia
Smallholder farmers across Africa face numerous challenges, including limited access to affordable and quality inputs that result in suboptimal crop yields, limited access to offtake markets, among others. Additionally, less than 10 percent of land in Africa is formally registered in a way that provides legal protection to landowners. Procedures to register and document land rights are complex, time consuming (can take as long as two years), and costly – especially for smallholder farmers who have limited disposable income and competing expense priorities. Without clarity on land boundaries, or access to formalized land titles, smallholder farmers are left insecure and have less incentive to invest in improving their land productivity because they are more vulnerable to land disputes and evictions. This sense of insecurity makes individuals unable to plan for the future, generate more income, and access finance, perpetuating the cycle of poverty.
Increasing Accessibility and Affordability of Land Tenure
As global demand for commodities grow and climate change is impacting yields, undocumented land is increasingly vulnerable. Without accurate data, companies struggle to assess the risks within their supply chain. Solutions used by governments, licensed surveyors, and value chain actors are either time-consuming paper-based systems or expensive hardware and software systems that lack data integration and scalability. That is why FINCA Ventures invested in Meridia, a company that bundles GIS technology, ground operations, and land documentation workflow software to reduce the costs of land formalization for smallholder farmers at scale with projects across Ghana, Cote D’Ivoire, Malawi and Indonesia. Meridia’s technology solution gathers information to produce different types of land documentation more quickly and cheaply than existing services. Through provisioning land tenure documentation, Meridia seeks to increase farmer productivity, income, and sense of security and provide farmers with collateral that can be used to access financing to further improve their livelihoods. We hope you’ve got the GIS of it!
Supporting Commodity Buyers and Their Outgrower Networks
Meridia partners with large commodity buyers that are increasingly concerned with the sustainability of their supply chains across cocoa and palm oil. Mapping helps these larger organizations be more effective in implementing intervention and technical assistance; helping to better provision access to inputs, extension services and markets, which can lead to more predictable and quality supply, better traceability for certification bodies, and ultimately higher and more accurate premiums for farmers. This is especially important for many tree crops, as rehabilitation and replanting programs are vital for success and are not easily implemented without providing incentives to farmers. Meridia also enables these organizations to secure affordable land tenure documentation for their farmers using the data collected, either subsidizing or completely covering the cost of land registration for their farmers, recognizing that this service creates the most value for the farmer and allows the organization to build loyalty with its supplier base.
Scaling with Tech
Meridia’s proprietary platform-based solution allows for surveyor-grade field data collection, surveying land documentation workflow, and back office data processing. The technology is adaptable, field tested and offline-capable and integrates with drone and other remote sensing data technology. The platform was designed to comply with various surveying and titling regimes in different countries, demonstrating that it is adaptable and can now scale to serve a larger volume of data, and can be a contender for bigger tenders and projects that include nation-wide full scale titling efforts. The mapping is also extremely accurate, which sets Meridia apart from its competitors. Meridia has been able to reduce the cost by 50 to 80 percent with this technology, and first-time registration can be turned around in six weeks, compared to two years. In the future, Meridia sees scaling opportunity through becoming a SaaS provider for local surveyors to help them deliver their service more quickly and at a lower cost, in addition to supporting local governments to track land ownership and transactions that take place.
Viewing Community Buy-In as a Prerequisite to Success
Meridia spends significant time and effort engaging with local communities to learn the legal, administrative, and cultural systems in each country that it works in to ensure that the land tenure documentation produced reflects local requirements and is legally defensible. Many of these relationships are fostered through local partnerships with NGOs that have been working with these communities for a long time and have earned their trust. Community sensitization processes allow Meridia to educate the community on what land rights are and how land documentation can impact them. Meridia also recruits directly from local villages to carry out mapping work, in addition to partnering with local licensed surveyors, increasing their technological adoption, and opening up new, harder to reach business opportunities that they wouldn’t usually capture.
Encouraging the Use of Land as an Asset
Smallholder farmers require financial services to smooth lumpy cashflow cycles, invest in their farms, save for their future and better support their families. However, these farmers have largely been unserved by banks and MFIs, like FINCA Impact Finance, and live and work outside of the formal financial sector. Several factors hinder farmers’ ability to access financial services, including income streams that are seasonal, don’t match up with traditional payment plans, and aren’t properly documented, and a lack of collateral to put forward. Land tenure as a form of collateral has been largely unobtainable to date because it has been cost prohibitive. This is where Meridia comes in — Meridia improves accessibility for smallholder farmers by generating land documentation faster and more affordably than existing services. Even in situations where use as collateral is not possible, such as with leaseholds, Meridia’s land document data can provide financial institutions with confidence on land size (which generates about 90 percent of smallholder farmer income), location and social acceptance of land boundaries, which has proven to be sufficient for many rural banks to provide loans on a cashflow basis. Through partnerships with commodity buyers, Meridia also has access to robust farmer profile information that farmers can showcase to a local financial institution to further help determine creditworthiness and minimize risk.
Leveraging a strong combination of tech and touch, Meridia is revolutionizing the way that land mapping and titling takes place across sub-Saharan Africa. Looking ahead, we are excited to see how many smallholder farmers Meridia will get on the map!