Digitisation of payments in farming helps in tackling poverty by boosting transparency and efficiency, a new case study by the United Nations-based Better Than Cash Alliance shows.
The study, which focused on agriculture nonprofit organisation One Acre Fund, says technology is driving economic opportunity and financial inclusion for thousands of smallholder farmers and their families.
The Better Than Cash Alliance is a partnership of governments, companies, and international organisations that accelerates the transition from cash to digital payments in reducing poverty and driving inclusive growth.
One Acre Fund digitised its loan repayments for farmers in Kenya, allowing farmers to easily make loan repayments via mobile money instead of cash, reducing the “uncertainty, inefficiency, insecurity and high costs.”
Mobile repayments “have allowed us to increase our efficiency and provide better service to farmers,” said the Director of Microfinance Partnerships at One Acre Fund, Mike Warmington.
He said that they have cut payment losses and collection costs by more than 80 per cent, boosting farmers’ satisfaction and opportunity.
With such model of farming and package of services, including training and inputs like seed and fertiliser, the average farmer participating in the programme earned nearly 50 per cent more than peer farmers who do not participate.
“One Acre Fund can now reach more farmers with greater reliability, and staff can spend almost half as much time collecting payments in cash, using that extra time to help farmers increase their incomes through training and educational programs,” said Mr Warmington.
Africa Regional lead at the Better Than Cash Alliance, Oswell Kahonde, said that digital payments are essential to building sustainable business models and creating long-term impact.
Mr Kahonde said by enabling smallholder farmers to make and receive payments digitally, it creates transparency and accountability which translates to many benefits.