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Metal silos hold grains for advance payments
The pilot with the GPLP project has been been an astonishing success. Farmers earned a lot, TBM earned its commissions and buyers got what they wanted. There is a high demand for more silos and farmers are willing to pay for them in installments. See the detailied report on the pilot here. Bahat Tweve wants to continue in Msowero village with his company TBM on entirely commercial terms with farmers.
We are now challenged with upscaling this venture in Msowero. We can make a first business plan to upscale the number of metal silos in Msowero from 20 to 200. Our calculations show that is the number required for TBM to break even with all its operational costs in any one location. Our sensitivity analysis with the figures from the pilot and realistic assumptions on pricing suggest this can work, with reasonable margins to accomodate even risks.
We are about to launch a crowd-funding effort to raise money for this venture. For each 500 USD we can make sure a silo can be placed in a household on a 2-year lease (200 USD), plus the COB advance paid for filling the silo (another 200 USD), plus the technical assistance to FARIP paid for helping TBM through this business start-up (100 USD). 400 USD will be recovered and loaned out again to TBM for further increasing the number of silos. Whatever funding we can raise we will immediately forward to TBM in order to start production of silos. The next harvest is begins in June 2017!!.
Short description of venture
Farmers have the opportunity to rent small metal silos for storing their grains. This enables them to sell the grains later when the prices have risen. However, farmers need cash at harvest time. Therefore the silos on lease are combined with a service of a) advance payments where the checked and locked grains act as the security, and b) assistance in marketing the grains in good markets when prices are higher through the "Transaction Security Services" of the Tanzanian company Biashara Mapema. Farmers therefore only have to think of a fixed fee for using the silo in order to get an advance payment when harvesting, and the rest when selling later. This was the first pilot to go through the mechanisms of a full cycle of storing and sales after a few months.
Status of financing
USD not yet raised
1. Full cycle of storing and sales with 20 silos in Msowero village
2. Add another 50 silos
Download research paper:
“Metal silo grain storage technology and household food security in Kenya”,
Zachary Gitonga, Hugo De Groote and Tadele Tefera, May 2015
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