By: Moses Kaketo
From poor quality inputs, lack of access to the best agronomics, low bargaining power with purchasers of their output, lack of affordable financing, and high crop losses estimated at 30%, smallholder rural farmers in Uganda who are the engine of the economy, are like orphans. They are on their own.
Large-scale farmers have the land, technology, and capital
Making a tangible difference
Armed with this information on small holder farmers and aware that the phone of any type [Uganda is one of the countries with access to phones] is a powerful tool beyond making and receiving calls, in 2017, Mr. and his team thought of ways to come to the aid of this important group to become sustainable and commercially viable.
They came up with something revolutionary: MobiPay, a Ugandan high-breed agro technology solutions provider that has transformed and improved smallholder visibility [including financial visibility].
“We started out to ensure that when a rural smallholder farmer sells his produce, they are paid through mobile money or deposited into a bank account, where their history would be built to provide an alternative credit score. Thus providing more visibility, ” Mr. Eric Kwabena, MobiPay’s Managing Director and Founder said.
To date, the platform has close to 400,000 registered smallholder farmers, with over 750,000 transactions going through the platform on monthly basis”
The platform has attracted several development partners, including the ILO, the World Bank, Open Capital, VSO, and People for Development, among others. MobiPay platform can be accessed using the cheapest phone on the market via USSD.
Eric says the plan is to have one million smallholder farmers on the platform in the next few years. Currently, MobiPay operates in all districts of Acholi and Lango. They also operate in Mayuge, Kikube, Insigiro, Mbale, Sironko, Bulambuli, Tororo, Butaleja, Nakapirititi, Abim, and Kabong.
The MobiPay managing Director reveals that registered farmers have transformed their lives.
‘’Before we came around, small-holder farmers were not visible to the main banking system. However, by giving them digital services, tools, and products, and by transacting on the MobiPay platform, we are able to use their transaction history to create a dis-risk mechanism through which the financial institutions can use to help them access credit.’’ Mr. Eric Kwabena revealed
Already a number of financial institutions are partnering with MobiPay: Equity Bank, UGAFODE, Centenary Bank & Eco Bank .
He says registered farmers are also trained on farming as a business and managing their finances, specifically on the importance of good post-harvest handling, which serves as a big connector to good market conditions and prices–an important link to improving incomes.
Receiving training in the basics of financial literacy plays a crucial role in the farmer’s ability to save, acquire loans, and practice keeping records of their finances.
Already, over 600 smallholder farmers and 16 farmer groups have opened bank accounts with Equity Bank. The bank is currently giving loans of up to five million Ugandan shillings to farmer groups. “You find a farmer who belongs to a farmer group that is up taking about UGX. 260,000 on a portfolio of UGX. 3 million that has been given to the group.”
“Farmers have transformed their lives. As you look at me, I’m smartly dressed. I sell my produce when the prices are high, thanks to post-harvest trainings. We are able to save, acquire loans to expand our farms, and take our children to good schools,” said Kikube-based farmer Patrick Okwale, one of the first farmers to join the platform.
MobiPay added services
Input Aggression: MobiPay profiles certified agricultural input suppliers in different localities. Farmers can request seeds, fertilizer, etc. using their MobiPay accounts and also make payments via the same platform. According to Mr. Kwabena, the community-based certified input dealers on the platform are expected to reach over 120 by May 2023, up from 70.
Inspection and training: MobiPay has trained and experienced agricultural officers who train farmers in modern agricultural practices. Farmers are trained in effective, efficient, and sustainable agronomic practices. The farmers can also request extension services, such as GAAP trainings, through the platform.
Mr. Kwabena reveals that behind these visits is a GPS tracking system.
When we ask our officers to train farmers, we use GPS codes to track and provide timely updates on the trainings. For every farmer registered on the platform, we have their full details. Their photos, their homes, their farms (location), the type of crops they grow, etc. Therefore, it’s difficult to forge results from the farmer trainings.
That is the power of technology.
“With our financial partners we are working with, we tell them we know these farmers, where they farm from,, the type of crops they produce, the animals they keep, how much they earn within a given period.” Mr. Kwabena said.
” We can therefore tell how much they generate. We help them get quality inputs, train them on best agronomics, and also do post-harvest training. And because they are in a group, they have better bargaining power. Therefore, we can predict their harvest and earnings”
he says, the whole concept is that ‘ ‘we want to increase access to finance. We want to use technology to create an alternative form of credit scoring so that the financial institutions can depend on the available, reliable data we provide rather than asking for collateral, which most farmers don’t have.”
Mr. Eric explains that with all this data and the coming of blockchain and artificial intelligence, “the financial institutions can depend on this data to help every smallholder farmer.”
Agric-knowledge hub: the platform maintains a database of crop types, common diseases, the best agronomic practices, weather information, etc., which registered farmers can access via USSD.
Market linkage: farmers on the platform can be identified by large off-takers [processors, traders]. There are six main buyers on the platform. In short, MobiPay has become the center of a new ecosystem of education, training, financing, and supplier and distribution services for smallholder farmers.
Creating sustainable jobs for the youth
As the whole generation seems to be killed because they sold their ancestral land to go to Kampala to ride motorcycles, which are later stolen or confiscated by police, Mr. Eric Kwabena thinks there is a better way to equip the youth in rural areas using technology to earn a living.
“We are looking at creating sustainable jobs for the youth; using technology is an enabler; to get all this, we need human intervention; we therefore work with youth in communities.”
He says, currently, they are working with 120 youth agents who interact with farmers and their system to sell digital tools, solar products, and mobile phones, as well as register farmers to open bank accounts.
The agents earn a commission for every activity.
”Already, we have success stories. some agents make up to UGX. 500,000 a month. Some have opened up shops and mobile money businesses, while others have joined farming. the plan is to increase the number of youth agents to 700 in a few years.
also read: Is Wave mobile money currently just surviving?
About the author: The writer is a marketing and distribution expert. He sees business in everything. He loves writing business news, reviews, and analyses. Reach him on or on Twitter: @mkaketo. LinkedIn: Moses Kaketo
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