‘I’ll buy eight tomatoes — I’m paying with mobile money’

Rural Buyer: Good morning. I'll buy eight tomatoes. I'm paying with mobile money.

Rural Seller: Good morning. With mobile money? Sure. Where are you?

Rural Buyer: I run a restaurant in Nebbi Trading Center across from Centenary Bank. Have the boda-boda (motorcycle) driver drop them off before 2p today.

Rural Seller: Sounds good.

Rural Buyer: Ok, I’ll send payment now. What is your MomoPay ID number?

Rural Seller: Ok. It's 123456. The tomatoes cost 10,000 UGX (2.60 USD). I'll call back to confirm I have received the money.

Less than 2 minutes later the buyer gets a call back.

Rural Seller: Hello? Got it. All set.

Considerable effort and funding has gone to digitizing payments across Africa and Asia in markets where mobile money services are rapidly growing.  One sector receiving considerable attention is agriculture. The GSMA has a unit dedicated to agriculture (mAgri), which includes a focus on payments. The World Bank's CGAP allocates resources to grants and technical assistance on the topic. And the Better Than Cash Alliance works with governments to implement digital payments at the national level. Convincing agri-enterprises that sell inputs to, or buy crops from, rural communities to embrace digital payments is seen as a potential path to de-throning cash--the undisputed king of commerce in emerging markets.

Why the focus on agri-enterprises? Because for-profit entities should have a clear interest in digital alternatives if they reduce cost and lower risk. And given their influential position, these enterprises can push rural communities on a large scale, in a new direction. Or at least that's what people say.

But what about these rural digital payment recipients--the farmers? Do they even want this service? And will they simply be pushed from above or can they drive this movement if given the opportunity? Well, that's harder because these are remote communities with low formal education, poor literacy and numeracy levels, and volatile income streams. That's a much tougher group to reach. Right?

Over the last year, Strategic Impact Advisors (SIA) has partnered with the Alur Highlands Coffee Alliance (AHCA) managed by the Palladium Group, with funding from the U.S. Agency for International Development (USAID) under a Feed the Future Uganda initiative. AHCA works with 16,000 coffee farmers in the West Nile region. In a three year period, AHCA has developed a network of lead farmer groups and deployed junior agri-extension field officers (JAFOs) to strengthen coffee production and improve linkages between farmers and buyers.

From the start of 2018, a joint team from SIA and AHCA co-designed and launched a rural stimulation campaign to build the comprehension, capabilities, and confidence of these coffee farmers to use mobile money at the product level. We created an interactive learning environment organized into multiple training waves. Meaning we did not mobilize one-off trainings where trainers simply presented the abstract merits of the product. At every training, JAFOs, who were themselves members of these local communities, served as trusted intermediaries bridging the gap between the current cash world of these coffee farmers and the world of mobile money. They spoke the local dialects and could explain things using a style and specific references that their neighbors could easily grasp.

We wanted farmers to not only develop the confidence to use this new product and service but also know how to troubleshoot problems on their own or figure out if someone is trying to cheat them. The final training wave, for example, centered on skits performed by farmer-volunteers and agri-extension officers. These skits sought to illustrate the roles of multiple actors involved in a mobile money transaction. That meant playing the role of farmer, mobile money agent, agri-inputs retailer, coffee buyer, or even school bursar. Each skit has two versions: "when it works", and "when it doesn't."

Armed with this knowledge, farmers--we believe--can overcome or minimize poor initial mobile money product experiences. When customers, especially in rural communities, are unhappy or perceive they have been mistreated from the outset, this weakens service reputation and dampens account uptake; two trends that are hard and expensive to reverse.  

Our experiences over the past several months have led to a number of observations regarding how rural smallholder farming communities in the West Nile region viewed and interacted with mobile money.

• Observation #1: Rural networks of agri-extension officers can be a trusted and efficient channel for more than just agricultural best practices. The credibility and effectiveness of these networks is a function of how long they’ve operated in these communities and whether they have demonstrated that their purpose is to benefit farmers or someone else (e.g. trying to sell farmers something they don’t need or can’t afford).

• Observation #2: Among less wealthy farmers in the AHCA program, exposure to these trainings prompted many to save up for and buy mobile handsets as well as register for mobile money. The concept of subsidies was never introduced because AHCA and SIA agreed that--if farmers bought their own phones--it would be a positive indication that the RSC had delivered something of practical value.

• Observation #3: Among lead farmers in the AHCA program, mobile money product confidence was built relatively quickly, and disseminated just as quick. Most had already heard of mobile money and some had registered for accounts before the trainings started. But usage was shallow because awareness was shallow. We found that a certain segment of smallholder farmers can “get it” when it comes to mobile money. It’s just that providers have not yet taken the time to present the product in ways that can be easily absorbed and applied in a rural setting.

• Observations #4: Farmers want to know a lot more about how mobile money products actually work in practice and in scenarios that are relevant to them. Mobile money is appealing for not only receiving payments or buying airtime but also putting money aside or moving about safely with funds. In fact, knowing what to expect when a mobile money transaction “goes wrong” was frequently cited as more valuable for training recipients.

• Observation #5: There may be greater interest and perceived utility in smaller value payments that take place between actors in these local economies and not just in collecting larger, seasonal payments from agri-enterprises such as from a major coffee buyer. The tomato vignette above, for example, is based off an actual experience reported to a JAFO between the first and second RSC training waves. Others included one male lead  farmer being able to remotely purchase food supplies from a merchant some distance from his village so he could properly host relatives during Easter. Another example is of a female farmer who was able to source funds from relatives in her home region using mobile money, which she added to her own savings to purchase a goat.

So what about these rural digital payment recipients--the farmers? Do they even want this service? Will they simply be pushed from above? Or can they drive this movement if given the opportunity?

Those are all good questions but let’s not let the “tough to reach” designation deter us. Yes, the challenges are real. But we feel there are creative ways to cut through many of them with partnership models that link development or NGO programs with commercial providers and distribution methods that bring mobile money knowledge into rural households in ways they can more easily retain and readily apply. Our experiences in West Nile further suggest that, once farmers recognize how mobile money fits into their lives and they develop the confidence to use this service for things that matter to them, they won’t need much external prodding or pulling. They will move quickly and independently to realize these benefits.