Urban traders in Kenya have a sticky proposition. In order to acquire from their suppliers, smallholder farmers, they often must go through intermediaries, or brokers. Brokers add value in Kenya. They inform traders of pricing information, exchange contact information between buyers and sellers, coordinate logistics, prepare farmers for meeting buyers, organize laborers for harvest, and sometimes, offer cash deposit to farmers in order to secure trades. To do all of that for a few Kenya Shillings per kilo is a bargain.
But not for our traders.
The traders we sign up on our platform in Nairobi, Nakuru and Eldoret want more. They want a guarantee that the Grade 1 quality they are after will be available to them. Despite brokers having as many services as they do, they do not offer a guarantee.
Traders from all cities, selling different crops, have told us that they cannot count on brokers to deliver high quality. Either brokers lack enough information to be able to predict availability of high quality crops, or they know that there is very little recourse when they fail to do so. Over-promising and under-delivering is not an uncommon practice for a broker. As a trader, you have almost no public resource to tell other traders and farmers in the system about your experiences. Sure, you can warn your neighbor traders, and boycott a broker in the future, but there is no widely used system at your disposal.
Markit Opportunity wants to create such a system. We want to incorporate a platform that not only guarantees high-quality crops, but also ensures recourse for your actions on the platform. Every user is registered and certified through a vigorous verification process. We verify identification and exact location of all users, whether it be the GPS of the farm, or the registered stall number at the market. Our team travels to remote regions of rural Kenya to collect this critical information. The result is a robust platform that adds value to the supply chain.
Last week we asked traders across our three cities what they thought of our premium matching and delivery service. Our team explained in detail our guarantee of high-quality onions and organization of each trade. Their response was positive, evidenced by the high rate of registration. They had one piece of feedback, however.
The price of 5 Kenya Shillings per kilo (5 Ksh is about 5 cents) was too high.
So we went to 4 Ksh.
Next month, when we begin organizing matched bids and asks on our auction platform, we will charge 1 Ksh for matching and an additional 3 Ksh for organizing the trade. In the end, no action will go unnoticed, as we document every step each person makes. This adds transparency to our trades, and builds trust with our users. We hope to prove that this is worth every penny to our users.