Last week we spoke about how YouFarm is throwing out the rule book in order to provide finance for financially disenfranchised farmers who are failing to access funding from traditional financial institutions. This week I want to focus on the importance of due diligence.
Due diligence is an investigation of a business or person prior to signing a contract.
YouFarm performs due diligence by vetting farmers and farms in order to protect the investors hard earned money. Our vetting process involves physical farm visits, equipment and infrastructure inspections. We also look at what sort of experience the farmer has. The less experience a farmer has the more we work with the farmer. Security at the farm is also critical. How safe is the produce from wild animals and humans. At YouFarm we promote best practice farming and as such we stand against the use of child labour in agriculture. We ensure our farmers do not use children to produce drops. Lastly we determine if the farmer has permission to use the land.
The YouFarm Crowd Farming Platform is a relationship between the investor, the farmer and YouFarm. This is why we do not charge any fees for farmers or investors to register. Anyone who requires farmers to pay fees for farm inspections is not a genuine partner. We also encourage investors to do due diligence on us before they invest their money. The Cattle Ownership Society is a good example of what happens if you dont do proper due diligence. Many people were swindled by this “fly by night” company.
Before you invest in a crowd farming project in Zimbabwe, it is crucial that you ask yourself the following questions as there are too many snake oil salesmen in the country, who are looking to fleece farmers and investors.
- Is the company registered in Zimbabwe as per the Companies Act? If so what is the company registration number?
- If the company claims to be registered in another country, a quick google of the address and company details will yield results. Google maps will even show you what the premises looks like. If the company claims it is based in the United Kingdom for example you can use https.//beta.companieshouse.gov.uk to see if the company is registered and if they are up to date with tax returns etc.
- If the company is requesting that farmers or investors pay registration fees, alarm bells should immediately start ringing.
- Crop insurance is important. If a company claims they have insured the crops you need to demand that you see the insurance certificate.
- Does the company have contact telephone numbers or are they only keen to talk via email?
- Lastly perform background checks on the Directors. A simple search on google or LinkedIn can yield amazing results. If the company only has one director, take your money and run in the opposite direction.
Any genuine company should be able to provide all this information upon request. At YouFarm we take our partnerships seriously and we are open to scrutiny from anyone. We involve the investor in the project from start to finish.
YouFarm has been receiving a lot of positive media coverage because of the innovative way we create financial and technological inclusion. It also helps that we have been rated one of the best tech startups in Zimbabwe. YouFarm began operations in 2017 and is the first crowd farming platform in Zimbabwe. One company has been using press releases banking on the fact that Zimbabwean journalists do not do due diligence to claim that they are the first in Zimbabwe. Imitation is the sincerest form of flattery and while we welcome competition because it keeps us on our toes and brings out the best in us for our customers benefit, we urge investors and farmers alike to be weary and to perform their due diligence.
Next week we will look at the different forms of finance that are available to farmers in Zimbabwe. Follow us on Facebook http://www.facebook.com/youfarmzw or on twitter @YouFarmZim. To register as a farmer or investor log onto the website http://www.youfarm.co.zw and fill out the registration forms.