Despite the importance of agriculture for food security, smallholder farmers in Latin America face a number of barriers such as lack of financing, access to cutting-edge technology and few training opportunities, hindering their ability to optimize their production and meet demand.
Given the potential of agriculture in the region, which in 2022 contributed nearly 7% of the region’s gross domestic product (GDP), some programs are dedicated to driving initiatives aimed at improving that sector, with solutions from the fintech (financial technology) and agtech (technology applied to agriculture) sectors offering some of the most important innovations to help overcome the barriers faced by farmers.
With the mission of connecting the rural population with startups and their innovative solutions, the second edition of the Innovatech program was recently announced, a project financed by the International Fund for Agricultural Development (IFAD) and implemented by the German Sparkassenstiftung for International Cooperation.
This program, which seeks to boost agriculture in Latin America and Bangladesh, will facilitate access to technology for at least 17,000 small farmers. The beneficiaries are expected to increase their productivity, income and resilience to climate change.
The first edition, implemented between 2021 and 2023, brought digital solutions to producers in six countries in Latin America and the Caribbean and impacted around 21,000 households. The solutions developed helped producers to improve their education and financial inclusion, facilitate access to machinery, optimize business management and take advantage of e-commerce, among other benefits.
For this new edition, called Innovatech 2.0, rural organizations from Bangladesh, Bolivia, El Salvador, Guatemala, Honduras and Peru have been selected to access innovative solutions from fintech and agtech startups also selected for this program.
Boosting startups with solutions for the agricultural sector
Fintech startups have become a fundamental part of the Latin American entrepreneurship ecosystem. The sector is the one that most attracts investors thanks to its ability to reach millions of people excluded by traditional banking. Together with agtech, it represents a valuable opportunity to overcome challenges.
With this background, both industries are key to the development of this project. For that reason, Innovatech 2.0 seeks to select 15 startups for an acceleration process for the development or adaptation of digital solutions that enable producers to raise production and marketing capacity, access financial and non-financial services, as well as implement sustainable agricultural practices.
“Innovatech demonstrates that startups need investment to overcome initial barriers and be able to adapt their business models to the real needs of rural communities. Together with the program’s expert advice, the startup’s capacity to work with smallholders is strengthened and the digital divide is reduced,” said Innovatech CEO Christina Olsen.
The technological solutions will be used by at least 340 rural organizations in five Latin American countries – Bolivia, El Salvador, Guatemala, Honduras and Peru – and one in Asia, Bangladesh.
According to the official announcement, the program will also offer technology training to some 8,500 rural youth, 8,500 women, and 1,700 people from communities and returned migrants, as well as specialized mentoring to ensure effective adoption of the technologies and foster employment opportunities in technology startups that contribute to resilient and sustainable agri-food systems.
Another new feature of Innovatech 2.0 is the so-called “Hub Edition”: two innovation centers will be selected, trained and financially supported to apply the program’s methodology and accompany the startups that develop the technological solutions in El Salvador and Peru.
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