The two friends grew up in Dhaka. After finishing their studies from North South University, they served in several firms in the country and abroad. While at their jobs, they decided to do something on their own. Initially, they planned to start a rooftop garden business. Their savings of Tk 3 million, a room and a laptop were all they had at the time. After working on this for seven months, they realised that they would not be able to progress far with this plan. Therefore, they changed their decision and decided to provide direct small loans to farmers.
Two friends, Fahad Ifaz and Jamil M Akbar, succeeded in the second attempt. In the last three and a half years, their startup 'Ifarmer' has given loans to some 17,000 farmers in 19 districts. Not only that, in addition to providing training and advice to farmers on cattle rearing and grain production, iFarmer is also selling their products in 96 markets in six divisions. Their registered farmers have also started getting direct bank loans.
This correspondent visited the iFarmer office in the capital’s Gulshan last Wednesday and saw a well-arranged office with an open environment. There was a cafeteria for the staff downstairs. Working was on at the second floor. In a small room next to it, Fahad and Jamil, the two owners of iFarmer, were working on laptops on either side of a big table.
While studying at North South University, the two friends established an event management firm. They used to organise various events of the university. After finishing his studies, Fahad joined a foreign firm called Swiss Contact at first. There he travelled from district to district to increase the capacity of farmers. Later he took a job at the World Bank. After working for two and a half years there, he went to work for farmers in Myanmar as an employee of Care International.
Jamil, on the other hand, initially joined Tiger IT and worked on the national identity card and digital driving licence projects. Later, he joined ‘Graphic People’. He used to provide technical services to various world-renowned companies.
Fahad said, “While working for the Care International in Myanmar and Cambodia, I saw the farmers there face problems in getting loan assistance just as the farmers in Bangladesh. Their products also reach the consumers through four or five hands. Therefore the farmers do not get proper prices. It was at this time when the idea of working for the farmers came into my mind. In Bangladesh too, government and non-government organisations are investing a lot of money to increase the capacity of farmers, but without any outcome.
Fahad also mentioned another incident while he was in a job in Bangladesh. He said, “I was talking to a farmer in Chuadanga. In between our conversation the farmer asked whether we finance duck farms or not. But there was no scope of providing loans for duck farming under our project. Therefore, I lent him Tk 15,000 from my pocket and gave him my visiting card at the time of my return. I completely forgot about this after returning to Dhaka. After five or seven months, that farmer called me over the phone and said he made profit from duck farming. He wanted to refund the whole money with a profit of Tk 3,000. I didn’t take that money. But I started thinking that the farmer had made a profit by investing only Tk 15,000. He even wanted to share a portion of the profit with me. It means there is a chance of doing business by giving loans.”
The idea of iFarmer came into the minds of Fahad first. Jamil was in Dhaka and Fahad in Myanmar at that time. Despite being in two different countries, the two friends talked about their business plans daily. Jamil left his job in March 2018. He had to sell his car to raise the capital of the business.
Jamil said, “It was my first car. It was quite hard for me to sell it. Despite that I sold it as we were desperate to do something new.”
Initially they went to Patgram in Lalmonirhat. There, they collected data from the farmers and decided to buy 40 cows for 40 farmers. They needed a total of Tk 2 million for that. But they didn’t have that much money. They went to two or three banks for this. But the banks rejected their proposal. After that Fahad and Jamil started inquiring about this online. They saw several start ups had provided loans to farmers after collecting money from people in the Philippines and Indonesia. This encouraged the duo a lot. They shared their ideas with their relatives and friends. The two friends also ensured them to return their money with a 40 per cent profit. But no one had trust in them.
Fahad said, “When we shared our plan with others, everyone thought it to be something like Destiny. But we had a clear vision. In the end our friends and relatives invested money believing that we would not run away with their money.”
Fahad and Jamil went to Patgram with that money and bought 40 cows for 40 farmers. The price of each cow was between Tk 42,000 to Tk 45,000. The rest of the money was given to farmers for vaccination and food for the cows and appointed two people to look after. Back in Dhaka, the two entrepreneurs focused on the technical aspects of the whole process and created the website of their company. They got the licence of their company on 1 January, 2019.
Fahad and Jamil saw success on the first attempt this time. The farmers sold all the cows within a year and returned the money along with the profit. Even before that, they made a list of 100 farmers for the second batch. They opened bank accounts for each of these farmers. They also took initiatives for cattle insurance by signing an agreement with Green Delta Insurance Company Limited. After that, people, who are not friends or relatives, also became interested in investing.
Fahad said, “More than 2,500 people have invested Tk 1.2 billion through iFarmer. Already, some Tk 900 million have been returned with profits.
However, in the beginning investors were given a 40 per cent profit but now it is 18 per cent. But we want to move to providing loans through banks gradually as our main target is the farmers. Lending through banks is most cost effective.
At present the number of registered farmers of iFarmer is around 64 per cent. The company has 60 types of data about each of the farmers. The Mutual Trust Bank has started giving loans to farmers up to Tk 100,000 at 9 per cent interest using that data. In this case, iFarmer gets 2 per cent as service charge from the borrowers.
Fahad said, “If you take a loan from an NGO, you have to pay 25 to 30 per cent interest. The interest rate is even higher in case of loans from the loan sharks. It is between 30 to 40 per cent. As such, our loans are more affordable for farmers.”
At the beginning of the coronavirus pandemic, when the farmers were having trouble selling their products, the iFarmer took a new initiative. They started buying products from the farmers and selling them in the wholesale market in Dhaka. At present, iFarmer collects vegetables from 40 points in 19 districts and sells them at 96 markets in six divisions. In this way the farmers get an extra price for their products at least to some extent.
Regarding the future plan, Fahad said, “I want to launch a one-step solution for the farmers as we have to run to different places for loans, seeds and fertilisers, advice and sales. We want to reduce farmers’ hassles. We want to reduce their production cost. Some nine out of 10 children of farmers do not want to take agriculture as a profession. Therefore, if we can't make the work of the farmers easier and motivate their children in agriculture, then we will be in danger as a nation.”
There are a total of 120 permanent workers in iFarmers at the moment. The number is over 200 if we take the contractual employees into account. They have recently received a foreign investment of Tk 2.1 million. That money will be spent on increasing the capacity of the organisation, said Fahad.
Asked about any suggestion for the new entrepreneurs, Jamil said, “There is no shortcut to success. One needs to be proactive, needs to work 14 to 16 hours a day.”
*This report appeared on the print and online version of Prothom Alo and has been rewritten in English by Ashish Basu