Moses Owino, from Ogal Beach along Lake Victoria, had been practicing artisanal fishing for nearly 20 years before he found Aquaculture. "I had to find a solution because pollution, overfishing, and a lack of proper legislation were affecting the quantity of our catch, and I was struggling to meet my basic needs." As the global population of wild fish declines, there is a growing need to meet the rising demand for fish consumption in Africa. By embracing Aquaculture, fish farmers like Moses not only secure their livelihoods but also contribute to food security in the continent.
Although aquaculture is a growing sector, challenges like lack of quality feed, limited market access, and insufficient knowledge of climate-smart fish farming practices have hindered most smallholder fish farmers from capitalizing on the growth. Most persist with traditional fishing methods even as stocks, resources, and environmental conditions decline.
AquaRech, Kenya’s first fish farming platform and a portfolio company of Catalyst Fund, enables fish farmers, fish feed manufacturers, and fish buyers to trade and form trustworthy relationships. They provide farmers high-quality feed, sensors, and advice for improving their fish harvest. They also offer BNPL (Buy Now, Pay Later) financing to help smallholder farmers afford the improved inputs and tech. The flexible payment service, developed with the support of Catalyst Fund venture-builders, allows farmers to access climate-friendly fish feed on credit.
"Our platform has been able to move farmers from using sinking mash feed, which pollutes the environment, to floating pellets. Sinking mash feed goes downstream to rivers and lakes, causing pollution and contributing to greenhouse gas emissions. But with the funding we got from Catalyst Fund and their support for developing the BNPL model, we can now buy sustainable fish feed to sell to the farmers," says Dave Okech, the founder of AquaRech.
Not only does AquaRech help with inputs and growth stages, the venture also helps with offtaking. By intervening at the moment of sale, AquaRech recovers the amount pending from the fish feed by deducting it from their revenue. This allows farmers to settle their feed payments upon the harvest of their fish.
"AquaRech is buying fish from fish farmers while also providing them access to more efficient supply chains, particularly cold chains, which are crucial in preserving the quality of the fish from harvest to sale. This aspect is even more critical in the context of climate change as cold chain prevents fish spoilage and reduces food waste," explains Maxime Bayen, Operating Partner at Catalyst Fund.
On average, 50% of food produced in African countries goes to waste due to inefficient supply chains and a lack of cold storage infrastructure. This threatens food security and will likely only worsen as climate change's impacts accelerate. By ensuring that more fish gets to market, Aquarech helps to reinforce food security across Africa, as demand for protein is expected to quadruple by 2050.
Implementing the BNPL model has also facilitated the adoption of precision fish-feeding practices. This approach minimizes fish food wastage and helps mitigate pollution. By providing high-quality feeds and employing precision feeding techniques, the growth period of the fish is significantly reduced. For AquaRech farmers, the time required for harvesting has decreased from 14 months to eight months.
"When the fish growth period is prolonged, they are more vulnerable to climatic factors such as water temperature and bacterial exposure, which can have detrimental effects on the fish, even leading to fish mortality. Therefore, precision feed is key," adds Dave.
As climate change continues to threaten wild fish stocks, the integration of financial services with climate solutions, exemplified by the partnership between Catalyst Fund and AquaRech, holds immense potential for addressing the climate challenges faced by the aquaculture industry.