ICTs/Mobile apps for Access to Financial Services and Insurance


Organised by: ACDI/VOCA


Agricultural mobile finance is convenient, reduces costs, increases transparency, mitigates side-selling, promotes financial inclusion and much more, yielding benefits for all stakeholders in the value chain. This exciting session will profile the importance of farmer awareness and trust as well as of farmer input into the design and implementation of mobile money ecosystems, which engage private sector, financial institutions, donors and development implementers.

Four presenters will highlight lessons learned and best practices that have emerged from Zambia, Ghana, Uganda, and Tanzania. Please join us as we open our session with stories about the use of electronic vouchers in Zambia (cotton) and Tanzania. We'll then move to how a bank collaborates with mobile-enabled, trusted village intermediaries in Uganda, followed by how mobile finance can be used as a channel for an input supplier financing scheme with a financial institution, input supplier and buyer in Ghana (cocoa). We'll conclude with discussion of the three approaches to jumpstarting an agricultural mobile finance ecosystem.

Nov 7, 08:30 - 10:00
Room: Ruhondo
Stream: Emerging Innovations

Sessions Chair


Chair of the session is Mark Pickens
Senior Business Leader, VISA

Mark Pickens is a senior business leader in the emerging market digital team at Visa. Pickens joined Visa in 2011 with a decade of experience designing financial products for unbanked consumers and helps Visa generate IP by driving new business models in emerging markets. Pickens coordinates the consumer-facing product and regulatory work for the Visa Rwanda team.


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Presentations


Branchless ag-finance: community knowledge workers provide 'last mile' support to farmer producer groups'


Branchless Ag-Finance: Community Knowledge Workers provide 'last mile' support to farmer producer groups'Micro-finance has empowered millions with non-collateralized loans but the structural costs of branches and field operations has made it difficult to reach the 'last mile'. The use of mobile technology combined with trusted community level intermediaries provides a promising way to serve remote agricultural producer groups with targeted savings and micro-credit products. Grameen Foundation, with the support of the Bill & Melinda Gates Foundation, launched a last mile network of Community Knowledge Workers (CKWs) in 2010 in Uganda to delivery actionable agriculture information and collect vital data on the lives of rural small holder farmers in Uganda. User-centered design of GF Uganda's products and services as well as ongoing quantitative research have shown that farmers show a strong demand for appropriate agriculture finance. Furthermore, by learning how to use our ICT4Ag tools better to really listen to farmers, we can discern that farmers often have sophisticated requirements for those services.The Grameen Foundation, in partnership with Opportunity International (OI), have embarked on a pilot project to leverage the now 1,200 strong Community Knowledge Worker (CKW) network in Uganda for innovations in Agricultural finance. We leverage the existing CKW technology platform, practices and mobile agriculture applications, to enable OI loan officers to perform remote risk assessments of potential agriculture finance clients in addition to farm agriculture extension services that 'de-risk' their agriculture finance book. Going forward, OI and Grameen Foundation are leveraging the CKW model to create a 'branchless micro-finance' agency network, whereby high performing CKWs can act as mobile money agents, facilitate the formation of 'last mile' OI agriculture finance producer groups and perform further 'on farm' agriculture extension. Initial empirical findings of this new model will be shared at the conference.


Mobile banking feasibility study among smallholder cocoa farmers in Ghana


Smallholder farmer access to agricultural finance has been a major constraint to agricultural commercialization in many developing countries including Ghana. The ICT revolution in Africa has however brought an opportunity to ease this constraint.Under the input supply component of the Commercial Strengthening of Smallholder Cocoa Production Program (CSSCPP), smallholder producers were required to pay a 1/3 initial deposit prior to receiving chemical inputs, which were distributed according to a calendar period. Producers were then given one year to pay the remaining 2/3 of the cost. To collect outstanding debt, credit officers conducted frequent visits, during which most farmers were unable to fully repay the balances. Unfortunately, most of the purchasing clerks who collected the balance on behalf of credit union used the funds to continue buying cocoa instead of promptly remitting the money to the credit union. Unable to properly track timely repayments and account for the actual outstanding amount in circulation within, the credit union runs the risk of not meeting its payment and loan obligations with its stakeholders.To mitigate any further default risks, the credit union could entice the producers to conduct their business through mobile transactions. Such technology adoption would in turn enable the credit union to pay the input suppliers in a timely manner and reduce liabilities whilst helping the farmers to increase their income.This study, hence examines the feasibility of a mobile banking system for smallholder producers and agro dealers in the five (5) cocoa regions in Ghana to utilize their mobile phones for future input and output payments. This is hope to avoid the instance of smallholder farmers failure pay forto the remaining 2/3 of the cost of receiving chemical inputs.It also assesses the factors conditioning the use of mobile banking. The study finds high levels of desire to adopt mobile banking among these farmers, if the systems are well implemented. It also finds that education, distance to a commercial bank, membership in farmer organizations, and endowment with physical and financial assets will influence the adoption of mobile banking services.The study goes further to proposed a tripartite mobile banking architecture that automatically deduct the loan repayment anytime the farmer sells his/her produce to the credit officer. The study also outline recommended mobile banking services and products for farmers and farmer cooperatives, and produces a suggested implementation strategy for their roll out.


Strategic benefits of, and approaches to, agricultural mobile finance


Agriculture mobile finance requires complex, multi-stakeholder alliances that leverage the skills, capabilities and resources of both development actors and private sector players. Once formed, the first order of business for the alliance is to conduct market research into the cash usage behavior patterns of the targeted farmers (e.g. frequency and amounts of cash receipts, why received, where cash is spent and more).Market research will quantify the opportunity and provide a roadmap for the design of products, services, branchless banking networks, merchant networks and more and highlight the related challenges/barriers.ACDI/VOCA’s USAID/Indonesia market research in Indonesia indicated cocoa farmers received 7.8 to 14.4 million cash payments for their beans per year with a total value of $450M+ USD.This helped to confirm what our commercial bank partner suspected and helped to make the business case for our mobile network operator (MNO) partner.We are now poised to disburse loans, on behalf of farmers, to input suppliers.The farmer can then pick up seeds and fertilizer from the input supplier.Upon harvest our farmers sell their beans to the cocoa buyer, a worldwide buyer/trader of cocoa and our alliance partner, and accounts are reconciled electronically.The farmer receives the profit in their mobile bank account and the bank’s loan is paid off.In addition to market research, ACDI/VOCA’s role in our Indonesian strategic alliance is to horizontally integrate awareness of, and education about, mobile finance into our value chain interventions.Doing so promotes mobile wallet uptake by farmers by leveraging our trusted brand to help overcome their lack of trust in banks, illiteracy and financial illiteracy.We also work with our bank and MNO partners to identify, develop, train and finance the agent network – and merchants that are aligned along our targeted cocoa value chain where our farmers live and work.

Organization : ACDI/VOCA

Scaling innovation: e-voucher case studies from Zambia and Tanzania


The discussion will focus on two case studies: one on the use of e-vouchers for payments to smallholder farmers in Zambia and the second on the use of e-vouchers for bednet distribution in Tanzania.Both offer lessons for how technology can be integrated into supply-chain management in order to improve the distribution of services through sustainable business models. In Zambia, MEDA is supporting our local partner, Zoona, a start-up mobile payments provider to design, pilot, and scale agricultural e-vouchers to allow smallholder farmers receive for cotton electronically, rather than in cash, making it easier to save this money for future uses.The e-voucher service reached over 20,000 in farmers in 2012 and will continue in the upcoming growing seasons under the management of Dunavant.In Tanzania, MEDA is using e-vouchers to provide a small subsidy to women and children for the purchase of bed nets. The bed-net voucher program has been operating in cooperation with the government for over 10 years with paper vouchers.In October 2011, the program piloted e-vouchers to improve the speed via which vouchers are redeemed and reconciled.By October 2012, one year later, they had issued over 400,000 e-vouchers and measured a cost savings of 7.5% against the traditional paper vouchers.