HARA improves the lives of smallholder farmers in Indonesia with the aim of achieving a sustainable sharing economy. It creates jobs to fight rural poverty while empowering and training women to become “Agripreneurs”. HARA also coordinates with banks and insurance companies to offer financial services to these farmers.
To start, can you briefly introduce yourself?
I am Regi Wahyu, the CEO of HARA. I co-founded the company in Indonesia in 2015.
What is HARA all about?
I grew up in a village myself. This has taught me a lot about networking and the importance of sincerity. I understand how villagers live, so I feel they are my friends. At HARA, we create jobs to fight rural poverty and empower women. My final goal is to create a sustainable sharing economy.
So, what does HARA do to reach these goals?
We train local women to become “Agripreneurs” – basically field agents. They manage groups of women farmers living in the same village, who grow crops like maize and rice in their backyards. The Agripreneurs provide these farmers with training on good agricultural practices and financial literacy.
In addition, they collect data on the farmers. HARA then coordinates with banks and insurance companies, which use this data to offer financial services to the farmers. Among others, farmers take in-kind loans: The money goes directly to local mom and pop shops, called HARA Depots. The farmers go there and collect their inputs directly. At the end of the season, we buy their produce and sell it to end users.
How do Agripreneurs, farmers, and shop owners benefit from your model?
For Agripreneurs, the main value is jobs. Many rural women migrate to the cities and leave their children behind. With us, they can support their families and send their kids to school without leaving their villages.
For the farmers, the first benefit is very simple: We measure the size and shape of their land for them. This has value in itself, but also relates to the second benefit: They can access bank loans and buy crop insurance. Without HARA, they would go to loan sharks instead.
As for the mom and pop shops, we train them in merchandising and retail management. This enables them to increase their profitability. They also profit from the in-kind loans.
How much do these groups earn from working with HARA?
Every year, the Agripreneurs increase their income by eighty per cent on average. For the farmers, it is an 86 per cent year on year increase, which translates into a 35 per cent income increase on the family level. The shops increase their profits by seventy per cent annually.
Why do banks and insurance companies take part in your scheme?
In the past three years, I have learned that banks and insurance companies really want to access this uncharted market. They call it the invisible territory, because there is no data on it.
One of our missions is to solve this asymmetry of information. We make knowledge that is only available on one layer of the pyramid available to all layers. Banks and insurance companies obtain the data they need to calculate risks. The farmers themselves receive financial literacy training and get to choose the providers they want to cooperate with. This is the beauty of it: The right to choose goes to the farmers.
Through the Agripreneurs, it gets much easier for the banks to physically access these customers. Disbursing in-kind loans through mom and pop shops also lowers the default risk as compared to loans in cash.
What kind of data do you collect?
We collect data on the basic identity of the farmers, on the size and shape of their land, and on their productivity. This enables us to give them recommendations throughout the season. In addition, we gather ecological data on things like plant pests or rain patterns. Our analytics team uses this information to create models on disease spread. Lastly, we collect transaction data on the products farmers use.
How many people does HARA reach?
We work with 35,000 women farmers in 670 villages. Adding their family members, this makes 130,000 people impacted. In addition, we employ 1,800 Agripreneurs and cooperate with 280 local shops.
How do you measure the impact you create?
We measure the income increases for Agripreneurs, farmers, and HARA depots. In addition, we monitor the number of people and companies in our networks.
Also, we are collaborating with a partner to draft a theory of change. This will enable us to measure the inputs, outputs, and outcomes more comprehensively and on a systems level.
What makes your business model viable?
We earn a commission for each transaction and market the crops produced. All the revenue is divided between the company (45 per cent), the farmers (50 per cent), and the Agripreneurs (five per cent). Each Agripreneur manages sixty farmers, so they earn more cumulatively. With our share, we manage our operations and scale the business. I have never earned a dividend.
Our cash flows have been positive since 2019. Last year, we earned around 500,000 US dollars. This year, we are on track to earn one million dollars. Next year, we are planning to again quadruple our revenue.
Do you receive any support from outside the company?
We got venture capital from three institutions in 2019. In addition, we receive grant funding from the Australian government, and university professors support us in training the Agripreneurs.
What are your plans for the next few years?
Our model is a movement. Within the next five to ten years, we want it to reach at least thirty percent of the 34 million smallholders living in Indonesia. We expect other companies to replicate our model – there is already something in the pipeline.
HARA itself will expand, too – both within Indonesia and internationally. Our model is applicable in eight countries along the equator. In 2024, we will expand to Uganda. I already have someone working for me there to explore the market.
I also have a crazy plan to connect farmers and online gamers in some sort of real-life farm simulator. Profits will be divided between the farmers and the players. The launch is planned for next year, and I am very excited about it.
What do you need to realise these plans?
We will require some working capital for our expansion, but only in June 2022. Until then, we have everything we need.
What challenges have you already overcome?
The biggest challenge is to find talent with the right skills and mindset. Most people want to work in big buildings with air conditioning, not on the ground with the bugs and the dirt. When I do find the right people, they work like crazy.
It was also challenging to set the right incentives. In an earlier model, we paid the Agripreneurs per data point collected, which led to massive fraud. Now, we simply share the revenue. This works much better.
What inspires you to keep going despite of these challenges?
I want to give back to the society that raised me.
What advice do you have for other companies?
Empathy is not enough. You need to experience the way people live and get to own their problems. You can’t just go there and say: “I’m going to help you.” You don’t know anything and can’t solve any problems.
When I started HARA, I lived in a village for two years. In the beginning, the way I talked and dressed was a huge barrier. Then, when I had lived among them for a while and got bug bites all over, they accepted me, and we could create solutions together.
The Impact Stories are produced by the Inclusive Business Action Network (iBAN). They are created in close collaboration with the highlighted entrepreneurs and teams. The production of this Impact Story has been led by Susann Tischendorf (concept), Sara Karnas (video), Katharina Münster (text and infographics), Christopher Malapitan (illustrations), Alexandra Harris (editing) and Olachi Opara (publishing). The music is royalty free. All photographs are courtesy of HARA.