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Recognized for Promoting Responsible eWallets in Rural Regions, KoltiPay has been Chosen as a Semifinalist for the 2024 Global Economic Prosperity Challenge by MIT Solve

The article is adapted from MIT Solve, submitted by Emily Bayliss, Grant Manager at KOLTIVA.

KoltiPay, a semifinalist in MIT Solve's 2024 Global Economic Prosperity Challenge -

Smallholder farming produces 30% of the world's food supply and is responsible for the livelihoods of 2.5 billion people globally. It represents a significant and underserved market, with agriculture development proving 3x more effective at reducing poverty in low-income countries than investments in other sectors. Despite this, there is a huge gap in financing available for smallholder producers, with $170 billion in credit demand going unmet every year (2022: Dalberg Advisors).

This gap is caused for several reasons:

  • Lack of agriculture-specific finance options in remote geographies. Local finance institutions in developing countries generally struggle to provide the appropriate financing to smallholders, either because they see producers as too risky or because they don't offer the specialized financial products needed in the sector.

  • Smallholder producers often lie outside of the formal economic sector. Due to a lack of formal land titles, consistent income, and credit history, they frequently don't have the means to secure credit or other financial support. This causes many of them to use informal finance, borrow small amounts of money from family, or turn to loan sharks with extremely high interest rates.

  • Low financial literacy. Many producers remain unbanked and haven't received any financial literacy training, meaning they struggle with financial management and lack an understanding of the formal financial products available to them.

  • Cash-based economies. Due to cultural norms or lack of access to financial institutions and infrastructure in rural areas, many producers remain unbanked and use cash only. This creates issues for the safe saving of money and the ability to build assets.

What is KoltiPay?

KoltiPay is a digital wallet that provides convenience and secure transactions for all needs of global and rural value chains. It is seamlessly integrated into our wider digital traceability ecosystem, KoltiTrace MIS, an integrated multi-crop platform connecting all activities from seed to table. KoltiTrace mobile application users, including smallholder producers, input shops, and traders across Indonesia, can access KoltiPay. These users, seeking quick access to funds, can now conveniently adopt cashless payments and e-wallets, enabling rural enterprises and smallholder producers to conduct hassle-free transactions and ensure secure payment options, aiding them in their financial needs.

KoltiPay features for smallholder producers, agri-businesses, cooperatives & financial institutions include:

  • Make/Receive ePayments: Producers and collectors can easily make or receive payments for crop transactions with flexible payment options (bank transfer, cashless, or split between cash and non-cash).

  • Premium Payment Distribution. Agribusinesses can significantly decrease operational hours for the premium distribution process. Enhance business productivity and streamline payment processes, reducing the need for manual and time-consuming payment efforts with affordable distribution fees.

  • Crop Procurements. Efficiently procure producers' crops while capturing all essential buying details and generating receipts. As a result of this seamless process, producers receive their payments directly in their bank accounts or E-Wallets, ensuring swift and secure transactions from collectors.

  • Apply for a Responsible Pay Later Scheme: Producers can submit a responsible pay-later scheme easily, with help from our field agents, who help complete all documents. Producers can choose flexible tenors and various pay later types, including cash, agri-input, or a mix of both.

  • Pay Later and Loan Management System for Cooperatives & Financial Institutions: KoltiPay provides an all-in-one dashboard management system web portal for cooperatives and financial institutions to manage loan applications and activation. It includes features for managing loan applicants, generating contracts, tracking loan repayments, collecting borrowers' data and profiles, and developing credit scoring with Machine Learning (ML).

  • Crop Insurance: Producers can purchase parametric climate risk insurance to protect against excess rainfall and draught, with automatic payouts going to producers through KoltiPay eWallet. The product uses satellite data to determine the insurance risks and payout amount, therefore eliminating any claim processes and fraud risk, increasing the speed of payout disbursements and making it easily scalable to rural areas.

  • Pay Bills and Top Up eWallet: Producers, retail shop owners, and collectors/traders can access KoltiPay eWallet features to pay electricity, pulse, internet packages, and other PPOB facilities. Users can top up KoltiPay easily via bank transfer.

  • Purchase Quality Agri-Inputs: Producers have access to purchase quality agri-inputs and see product catalogs from nearby kiosks. They can contact kiosk owners through the chat function, select from the product catalog, select collection or delivery method, and pay the kiosk using their eWallet.

  • Go Cashless: Traders do not need to withdraw cash at ATMs or banks that are located far from their location to carry out of the crop transactions; they can simply pay producers through KoltiPay. Crop transactions between producers and traders/collectors are easier with the split payment method, with part of the payment in cash and the rest as cashless via KoltiPay transfer.

  • Traceable Payment Data: Users can easily track every transaction, improve their financial records, and support supply chain transactional traceability.

Who Does KoltiPay Serve, and in What Ways Will the Solution Impact the Users?

We are working to improve the livelihoods of smallholder producers in Indonesia and beyond, supporting improved access to finance and digital financial solutions. As mentioned previously, smallholder producers in Africa, Latin America, and Asia are estimated to face a $170 billion funding gap. Lack of access to finance compounds the numerous challenges that smallholder producers face due to climate change, increasing costs of inputs, pressures to comply with international regulations, and productivity issues caused by aging trees. Low yields and subsistence-level incomes plague smallholder producers within these conditions.

Through our digital solutions and boots-on-the-ground field team, we are working to create transparent, inclusive, and sustainable global supply chains. Our aim is to improve financial literacy levels and producers' access to responsible digital finance, supporting them in building successful livelihoods and improving their socio-economic conditions. Our KoltiPay solution supports rural enterprises and smallholder producers by providing easy transactions, secure payments, and access to loans/crop insurance. KoltiPay is an integrated feature in Koltiva's mobile application ecosystem, and registered producers, cooperatives, and SMEs can access it. Koltiva currently has over 1,190,000 producers and 8,500 SMEs registered worldwide. Currently, KoltiPay is only available within Indonesia, where we have 542,650 producers and 4,901 SMEs registered. However, we are looking to expand into some of the other 60 countries we serve.

Backed by Koltiva's end-to-end technology ecosystem, businesses and producers can easily start using cashless payments, apply for loans, purchase crop insurance policies, make & receive ePayments with collectors/traders, sell and purchase quality agri-inputs from shops, and pay bills (electricity, BPJS, mobile data, etc). By improving producers' access to formal finance through loans and providing crop insurance products, we are supporting their ability to plan for the future and boost their incomes. With greater access to agri-inputs as well as loans to support replanting projects, producers are able to increase their productivity and, subsequently, their incomes. This also removes the pressure to clear new land to improve livelihoods, supporting reduced deforestation in tropical areas. To elevate this impact, alongside offering digital financial solutions, our Field Team supports producers with financial literacy training as well as training on climate-smart agricultural practices, thus promoting improved livelihoods alongside environmental protection.


Jul 12

KoltiPay's innovative solutions for smallholder farmers are making a real difference.


Jul 12

Great to see KoltiPay recognized for its impactful work in rural financial solutions. Best of luck in the 2024 Global Economic Prosperity Challenge!


Jul 12

Congratulations to Koltiva & KoltiPay team for being recognized as a semifinalist in the 2024 Global Economic Prosperity Challenge by MIT Solve!

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