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Capitalising on demand

The session on ‘ICTs/mobile apps for access to financial services and insurance’ identified a number of lessons that will help improve the development of mobile financial services in ACP countries in the future.

The session on ‘ICTs/mobile apps for access to financial services and insurance’ identified a number of lessons that will help improve the development of mobile financial services in ACP countries in the future.

The mobile financial services sector has a high profile, partly because of the huge market it can penetrate: more than one billion people have a phone but no access to banking. In Rwanda, the host country of this conference, the mobile finance context is in fact atypical of many other national situations in that the programme being developed by the ministry of agriculture with Visa will operate across all mobile networks and all the major banks.

This session on ‘ICTs/mobile apps for access to financial services and insurance’presented cases from Zambia, a cogent, compelling report of success and failure in an e-voucher scheme; Uganda, where Grameen is piloting m-finance with the Community Knowledge Worker network (CKW); and reports from an m-banking survey in Ghana.

The Ghana survey demonstrated that there is continuing demand. Yet research by GSMA and the World Bank estimates that only one in ten of the one hundred-plus pilot mobile financial service schemes are gaining traction (defined as having over 200,000 users). The reasons for this include:

  • difficulties in getting the technology right;
  • the reach of individual banks, who may have 100,000 customers, or even a telecom network with a million subscribers, is not large enough to be profitable;
  • potential consumers are not being persuaded to switch from informal systems, since they don’t have a clear understanding of the potential benefits, distrust banks and many are either or both wholly, and finanically non-literate. The Ghana research demonstrated the link between higher levels of education and increased preparedness to subscribe to m-money.

Lessons learnt

The cases from Zambia, Uganda and Ghana discussed during this session led to the identification of a number of lessons. For example, the fact that there is high demand for these technologies but little traction means that any approach to mobile finance in agriculture must be informed by market research on farmer cash usage behavior patterns. Moreover, impact should be measured by the development outcome. In the Zambia e-voucher case, technology needed to not only work well and to scale, but to ultimately improve health and livelihoods, respectively. This ultimate goal informed the interventation design, monitoring framework and definition of success.

Another point is that simply designing a good software solution or technology product is not sufficient for widespread usage. The design of solutions should be driven by both end-user experiences and needs as well as the business and technical models. 'Appropriate design' involves a significant investment in research, communication, trial and error, and creative experimentation, all in a highly participatory mode that treats farmers as co-creators.

It is also important to realise that cost benefits are delivered over the long run. Initial investments in technology can often require a subsidy to prove the business model to private sector partners. In Zambia, the local cotton company was able to see the value of the technology in terms of cost-saving and efficiency only after the initial pilot. Note that afterwards the pilot the company backed off, since it was not convinced to invest in the scale and pace of change required in their normal working practices (moving to a credit rather than a cash system). Further donor funds mean the project has started again.

Particularly in rural areas, adopting new technologies depends heavily on the creation of local institutions or relationships of trust. The Grameen model rests on early evidence that the CKW local agent model is effective in building trust. In relation to trust, one participant mentioned the example of sharia banking and ethical financial models, such as Triodoos, which offer interesting alternative options.

Early providers were using unfamiliar technologies and methods, and so were allowed by regulators to experiment, as in Kenya for example. But there are fears that governments may increase regulation and stifle innovation. Therefore, the role of and relationship with central regulators is key. Developing that relationship is a crucial factor in constructing a multi-stakeholder partnership.

e-voucher initiative in Zambia

In Zambia, MEDA is supporting our local partner, Zoona, a start-up mobile payments provider to design and test agricultural e-vouchers. The e-vouchers allow smallholder farmers to receive some payment in cash after supplying their produce, while the rest will be given via an electronic scratch card that can be redeemed over time. Farmers consider the scratch cards a convenient and secure mechanism as they eliminate the need to carry around large sums of cash, which can be stolen or destroyed in a fire, for example. The e-voucher is personal and therefore not prone to theft, and because money is stored electronically it encourages saving money for future use. In 2012, the e-voucher service reached over 20,000 in farmers.

Related links

Grameen Foundation Community Knowledge Worker initiative in Uganda


mVisa, mobile branchless banking in Rwanda


MEDA and Zoona e-voucher initiative in Zambia


Mobile banking feasibility study, Ghana


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The session on ‘ICTs/mobile apps for access to financial services and insurance’ identified a number of lessons that will help improve the development of mobile financial services in ACP countries in the future.


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