ICT tools providing mobile money for agribusinesses
ICT-based agricultural financing/mobile money services are no doubt the result of firm collaboration between finance institutions such as banks and telecoms companies. Industry watchers have however observed that in African countries where it has been highly successful, the telecoms company rather than the bank leads the partnership. This model has led to massive usage by rural dwellers who constitute the greater percentage of the unbanked and who are engaged mainly in farming and other agribusinesses.
Below are highlights of some agric financing tools that have been tested and proven in East African countries and some other countries.
· Credit Information Sharing (CIS) system is a mechanism through which various lenders electronically pool and pull borrower information using centralised (credit reference bureau) databases, with the aim of addressing information asymmetry between borrowers and lenders.
But CIS will enable farmers to build a credit history for negotiating better credit terms. This is similar to the credit bureau system in Nigeria but in this case it is specifically for farmers or agribusiness investors.
· Agrilife Platform owned and developed by Mobipay Kenya Limited is a cloud-based technology platform designed to use mobile phone and web platforms to enable groups of smallholder farmers to access financial services, markets and other services that are relevant to them. Agrilife enables players in the agricultural sector – including banks, micro-finance institutions, insurance companies, cooperatives, investors, and agricultural input providers – to have access to data about farmers’ financial and physical supply chain.
This enables farmers’ credentials to be established, minimises risk and gives the farmer easier access to affordable credit. Farmers are able to use the technology to make requests from their mobile phones/web platforms, and via Agrilife the requests are authorised and service providers are able to react to the request.
· Mobipay, on signing up service providers, agrees on a commission, which is transaction based, enabling Agrilife to be sustainable. So far, Agrilife has turned over $18 million and Agrilife is present in Kenya, Uganda and Zimbabwe.
· AgroCentral is Jamaica’s first digital agricultural clearing house that utilises Web-to-SMS and SMS-to-Web technology to connect small farmers and businesses. Through AgroCentral, businesses have the ability to source large amounts of crops directly from farmers and farmers will be able to sell their available produce directly to businesses.
AgroCentral facilitates effective linkages among farmers and businesses and operates by using a database that holds complete profiles, on both farmers and businesses. Farmer profiles include farm location, crops grown, supply capability and cell phone contacts.
For businesses, profiles include business location, product requirements and ease of transaction. This information along with the two-way SMS portal allows for efficient communication of market information and exchange of goods.
· Ensibuuko is a mobile and web application that integrates SMS and mobile money services to enable saving and credit associations (and other financing organisations) to handle savings and make loans to smallholder farmers.
· FarmDrive Limited operates on the fact that more people are becoming interested in farming. They have disposable income that they want to invest, but they do not want to farm. FarmDrive seeks to connect smallholder farmers to such investors.
A farmer keeps records of their productivity, expenses and revenue for the farming activity. This is analysed to reveal performance patterns and build a credit profile for the farmer. Investors are then given access to credit profiles of farmers who have applied for investments and can connect with them.
· Farmer Management System (FMS) – Within farmers’ organisations, FMS is a tool through which the credit provided to the farmer is controlled and managed. In doing this, the farmer is given access to accredited input suppliers and the benefit of better prices due to economies of scale. FMS serves as an electronic wallet for the producer linked to specific suppliers within the defined ecosystem.
This electronic wallet has various accounts which enable production and trade transactions to be captured in the detail required by the stakeholders within the value chain. The combination of the electronic platform with the management services creates the FMS – ‘the solution’ which is provided by Vest Farm.
· Farmforce is a web and mobile platform built for use by large-scale contract farming schemes composed of smallholder farmers. The system allows company agronomists and production managers to control which inputs growers apply to their fields, ensuring that that approved chemicals are used and that the correct maximum dose, pre-harvest intervals, and maximum number of applications per season are observed.
The system provides support for data collection for international safety and sustainability standards, such as Global GAP. Farmforce has a loan management module which supports cash and input loans calculated on the size of farmers fields. The Farmforce mobile application has a secure harvest purchasing module (including loan repayments) which is integrated with mobile weighing scales and a bluetooth printer for use at collection centres to improve transparency.
The system downloads data online or offline, enabling technical assistants to capture data in very remote areas. The system also provides detailed weekly production forecasts. Farmforce supports low end android mobile phones like the Samsung Galaxy Pocket which are cheap ($110), portable and easy to use.
The Musoni System
This is a cloud-based Management Information System (MIS), aimed at micro-finance institutions and savings and credit cooperatives looking to use technology to improve efficiency and reduce their operating costs. Aside from the core MIS functionality, the system integrates with mobile money transfer services (enabling microfinance clients to receive and repay their loans and savings through their mobile phones); send automated SMS reminders to clients; and enables loan officers to carry out client registration and loan applications in the field using the Musoni app. All these features make the system perfectly suited to organisations working in rural areas.
Tangaza Pesa
This is the brand name for a mobile virtual network operator business, licensed by the Communication Commission of Kenya and the Central Bank of Kenya to Mobile Pay Limited (a fully owned Kenyan company). Tangaza Pesa offers mobile money transfers, voice calls, and access to the internet and data in Kenya across multiple channels.
One of Tangaza Pesa’s market solutions is the Value Chain Automation Service. Specific to agri-value chain financing services, the platform enables prospective farmers seeking financing to securely register with the financiers, apply for loans and credit, receive loans, and make repayments from the comfort of their mobile phone (across all networks). The financiers are able to automate the loan application and approvals process, disburse funds, and monitor loans performance through customised reports and communication.
On value addition through marketing, the platform allows farmers to register and ‘post’ their produce onto the virtual market place for buyers to see. It also enables buyers to register and order, aggregate (at collection centres which ensure quality control) and make payments.
UMarket disbursement portal
UMarket disbursement is a portal system that addresses the bulk payment needs of organisations via mobile phones. The system targets farmers, remittance firms, teachers, manufacturers and other businesses. Registered Tigo Cash users and all other network users are able to receive money through this platform. Money sent to them is redeemable from accredited Tigo cash agents. They are also able to use their electronic money to pay for peer to peer transactions and airtime purchases.
Umati Capital
The Umati Capital platform is a suite of integrated mobile and web applications which are able to track supply information from source to point of processing. This information is then utilised to provide credit to various entities within the supply.
OLUYINKA ALAWODE