Azolla is used as a biofertiliser because the leaves of this plant have cyanobacteria called Anabaena azollae. This is an algae which have the enzyme nitrogenase in the heterocysts. The heterocysts are specialised cells in the algae. These cells help in fixation of nitrogen with the help of the enzyme. The rice plants grown in these paddy fields use this fixed nitrogen. Thus, the yield of the paddy crops is increased.