Market Facilitator

Model

FoodFit Zones Design and Creation

February 2023 In partnership with:

1
 Introduction
GAIN aims to establish 1000 FitFood Zones (FFZ) in urban and
peri-urban areas targeting low-income consumers with the
aim of bridging the gap between consumers' desire to provide
nutritious foods for their families and the ease of preparing
enjoyable meals. By doing so, the project seeks to fulfill
consumers' expectations for freshness, safety, convenience,
diversity, and taste, improving the quality of their family
meals. However, the vegetable supply chain is afflicted by
inefficiencies due to lack of coordination among actors,
high pricing of stock, unreliable supply, poor quality and
unreliable transport. These challenges make it difficult for
low-income consumers to access fresh and affordable
vegetables.
BoPInc connects low-income consumers with dignified
choices. Based on the mentioned challenges BoP Inc is
designing solutions to streamline the vegetable supply chain
by working with various stakeholders including aggregators,
vendors and farmers, to improve coordination and reduce
inefficiencies. Through this effort, BoPInc aims to improve the
availability, reliability and affordability of fresh vegetables
ultimately making it easier for low-income consumers.
BoPInc main priority areas are:
- Designing and implementation of a sourcing strategy
for the FFZ’s that guarantees vegetable safety, freshness
and variety
- Design and piloting an operational strategy.
- Recruitment, onboarding and training plans
- Provide input into the promotional strategy for FFZ
- Develop and pilot prototypes of FFZ’s , evaluate the FFZ
and provide recommendations.
2
Findings from the field visits
● Despite the potential benefits of collaborative purchasing methods such as joint purchases, aggregators, and
farmer producers, most vendors continue to prefer individual sourcing from brokers due to the advantages of
informal trade credit facilities, simplified logistics arrangements, flexibility in placing small orders, and the
availability of a wide range of vegetable varieties. This creates a challenge in promoting more efficient and
sustainable supply chains for the vegetable industry.
● How might we incentivize vendors to move away from individual sourcing from brokers and towards more
collaborative purchasing methods?
● Despite the current broker preferential sourcing, Vendors still get a raw deal in the value chain such as high
pricing of stocks eating into profit margins due to overdepency and lack of viable alternatives that would be
much affordable and certain such as joint purchase scheme,aggregators,FPOs among others .
● To minimize the asymmetric effects in the value chain, The FFZ will adopt market facilitators (Sales force) driven
approach.
● The Market Facilitator is expected to monitor the compliance of the FFZ to standards and SOPs.
● They are also expected to be critical in facilitating sourcing with greater goal of conversion into integral part of the
chain.
● The Market facilitator will create relevant linkages between the two parties to guarantee trade credits.

3
Problem & proposed solution
Problem
The current broker preferential sourcing model is disenfranchising
vendors in the value chain, leading to high pricing of stock that
eats into profit margins due to over dependence. Vendors are forced
to wake up as early as 1am to 4am in order to get to the market in
time to source, incurring social costs. Moreover, they rarely get the
desired varieties and quality due to poor handling by brokers and
logistics systems, resulting in unpredictable pricing, quality, and
reliability of supplies. A more inclusive and efficient sourcing
model is needed to address these issues and improve the quality,
variety, and reliability of supplies while reducing social costs for
vendors.
Proposed solution
The proposed solution to address the challenges faced by
vendors in the value chain is to adopt an MF model that
prioritizes assured supply. This model aims to make
sourcing more efficient and predictable, by setting up a
mutually beneficial collaboration between vendors and
profiled FPOs, traceability and safety mechanisms that
ensure the quality and reliability of supplies. By
implementing the MF model, vendors will enjoy greater
stability and reduced logistics costs, while customers will
have access to a wider range of quality products at more
predictable prices. Overall, the MF model offers a more
inclusive and efficient sourcing solution that creates a
more sustainable and equitable system for all parties
involved.
4
Market Facilitator model

5
Market facilitator driven sourcing

Market Facilitators Vendors / Mama

Farmers, Producer
(Sales force) Mbogas
Organisations

6
How it works

● The model will leverage on database for both vendors and suppliers.
● The MF will have organize vendors under respective FFZs and capacity built them on key
SOPs,order placement,set up communication platforms with relevant rules to govern the
operations.
● The MF will consolidate data on varieties, purchase price ranges, seasonality and develop a
corresponding database of several suppliers to achieve the core differentiator of assured supply of
the systems in 365 days all round.
● The model will utilize 2 key communications points i.e Vendor to MF platforms, MF platforms to
Producer supplier.
● The MF to compound the economies of scale capabilities of the model will design aggregation
systems with vendors and suppliers to eat up the logistics costs.

7
Key Assumptions

● The model assumes turn around time of 10 to 15 hours.

● The model banks on least possible logistics costs via aggregations .
● The core differentiator is assured supplies.
● The model assumes on hedged asymmetry in the value chain through simplified database

8
Key Performance Indicators

● The Number of Farmer/Suppliers onboarded

● The number of vendors onboarded.
● At Least 80% of vendors retention throughout the pilot
● Orders placed through MFs.
● A 5% monthly output growth rate

9
Detailed Process

10
 11
Suppliers/ FPOs

tes
g ga f
in gre to
ac g s in
Pl s/A cer po
2) der du he
or pro tt
to ta
en n
ym io t
Pa ga om
3) gre fr
ag es
at
Market Facilitator Model

eg
gr rs
Ag lie
4) pp
su
Facilitator
Market

s to
or ery
nd liv
Ve De ry
5) ve
eli
nd s.
to rs or
en de nd
ym or ve
Pa

Vendors FFZ
6) ted om
en fr
m rs
ag de
/fr or
gle ing
Sin Tak
1)
Step 1: Order Consolidations
1. The MF will consolidate the multiple fragmented orders from the vendors under the FFZ.
2. The orders will be segmented per varieties and quantity.
3. The MF through a set SMS system or whatsapp group will aggregate and place orders as
appropriate on an agreeable time points (10 to 15 hours before sales)
4. The orders shall be paid via strictly MPESA to the MF (easily traceable) :

The vendor interviews findings indicate that more than 90% of vendors do not keep
records. To address this challenge, the MF model proposes the adoption of MPESA
payments, specifically the "Buy goods" and "Pochi la biashara" functionalities, which will
serve as a record traceability mechanism. This will not only promote efficient
record-keeping among vendors/MF but will also indirectly improve financial literacy,
develop business credit profiles, and enhance access to working capital credit such as
hustler funds, based on MPESA transaction records. Additionally, the chosen
functionalities, "Buy goods" and "Pochi la biashara," are cost-effective, with minimal fees.

12
Step 2: Order Placement

5. The MF will refer to pre listed suppliers and pick the most competitive of them per varieties and
place the aggregated orders.
6. The MF-Supplier shall set agreeable order placement terms or conditions i.e deposits,
installments, credit, delivery etc
7. Each order sheet tool will comprise of time, quantity, delivery model and expected arrival time.

13
Step 3: Delivery and dispatch

8. The delivery will be done via diverse means i.e PSV or specialized means such as lorries or bikes.
9. The supplier is expected to deliver the order as placed in the conditions as agreed.
10. The order will then be dispatched by the MF to the various relevant vendors.
11. The cost of delivery can be shared between the stakeholders or absorbed in the product costs.

14
Next steps

● Recruitment and onboarding of the MFs for Nakuru and Nairobi for rapid tests.-7 days
● Roll out the rapid test with support of the MFs in selected short test areas. 15 days
● Integrates mock up with the ongoing insight interviews in the 3 counties of
Machakos,Mombasa,Kiambu.- 15 days .

15
Mock-up

16