A community health worker in Kenya trained by Pathfinder International, using a mobile phone to collect client data. Photo by Sala Lewis.

Each year billions of dollars in cash payments are distributed by development organizations to individuals in need. Across sectors including agriculture, health, and emergency relief, cash payments are dispersed with the intent of imparting a lasting impact on their recipients. As we’ve discussed in this space previously, dealing with cash instead of electronic payments brings risks and inefficiencies to the parties involved, both development organizations and their payments recipients, too, who are likely to have a lot at stake.

Visa, in partnership with NetHope, a consortium of more than 40 humanitarian organizations, is addressing this opportunity to improve development organizations’ payments systems through the Visa Innovation Grants Program, a new initiative providing funding to development organizations for the modernizing of their payments systems. A few weeks ago the program selected the five winning organizations, who will each receive $US 100,000 for their projects. Representing a breadth of sectors, the five organizations are Agribusiness Systems International (ASI), Freedom from Hunger, International Federation of Red Cross and Red Crescent Societies (IFRC), Mercy Corps, and Pathfinder International.

The payments system projects of ASI and Mercy Corps focus on developing mobile money services for farmers and other actors in agriculture value chains. ASI is working with rice farmers in Ghana, and Mercy Corps with smallholder farmers in Indonesia. The payments systems allow farmers to receive timely and secure payments from agricultural cooperatives electronically, rather than by traveling to pick up cash, which requires expending resources, including time that could otherwise be spent tending the farm.

Pathfinder International is also implementing mobile money, in the context of a payroll system for its community health workers in Kenya. The system will be paired with electronic employee activity tracking, aiding access to field data. Freedom from Hunger is developing electronic payments systems for health-related financial services, such as health savings and credit accounts, offered by microfinance institutions. IFRC, along with the American Red Cross, is designing and testing an electronic cash transfer system with national Red Cross societies in Latin America and the Caribbean. The aim is to get relief payments to those who need them with improved efficiency, security, and transparency.

A study by the Cash Learning Partnership published in 2011 found significant barriers in technology, operations and even attitudes within development organizations slowing their transition to electronic payments systems. Visa’s funding should provide the nudge needed to speed up this important shift.

Image credit: Sala Lewis

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It’s well acknowledged that in designing financial products, service providers should connect with prospective clients and their needs. Though the extent to which this actually happens remains a cause for concern. That’s a big part of why AgriLife, a new mobile-based financial services platform for smallholder farmers, intrigues me.

AgriLife is open-ended, built as a platform with integration points through which providers can “plug in” and deliver their services. These include financial services providers, mobile network operators, and a variety of agricultural players. On the client side, the farmers use the services available through AgriLife – like crop insurance, input payments, and savings accounts – and in turn provide information through the platform on their own farming activities. Farmers can provide information on their crops – what they’re producing, how much, and what they’re yielding. This user data is collected and analyzed by the providers and used to better shape their offered services. Over time, the user information amasses to establish a farmer’s production capabilities. These production capabilities can be used by farmers to access credit through AgriLife’s associated services. Additionally, the resulting electronic transaction records for many of these farmers helps them build a credit history that can be used, via AgriLife services or otherwise, for financing throughout the value chain.

AgriLife recently launched in Uganda. One of its early adopters is the Farmers Centre, a farmer-centric agribusiness in Northern Uganda, and its thousands of affiliated farmers. These individuals often travel long distances to the Centre’s warehouses to purchase inputs and aggregate their produce for processing and selling. Previously, these transactions had been done on paper with data stored on a single computer. AgriLife makes it possible for these processes to be done much quicker and, as it’s cloud-based, more securely. With more robust records on their farmers, the Centre is able to make informed recommendations on what farmers should plant and which inputs they should obtain, and make informed linkages between farmers and buyers.

AgriLife was developed by MobiPay, a Kenya-based IT company. MercyCorps is supporting the expansion of the platform throughout Uganda, facilitating connections with service providers. MobiPay anticipates AgriLife will serve 100,000 farmers by the end of the year. A recent report from Dalberg, a development consulting firm, characterizes a big and currently unmet opportunity in agricultural financing for the world’s 450 million smallholder farmers. The report asserts that with increased financing, farmers can improve their products and yields, and feasibly double their incomes.

Image credit: tech360 magazine

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