By MobiPay writing from Kampala, Uganda
Globally, there is a high recognition of the crucial contributions of FinTech companies in facilitating (smallholder) agriculture financing through the provision of digital financial services (DFS). Similarly, in Uganda, FinTechs including MobiPay offer DFS to relief smallholder farmers (SHF) of a plethora of constraints that impedes their access to institutional financial services/products: complex processes, the requirement of collateral, distant or non-existing banks, and risks associated with the handling of physical cash.
Progressively, FinTech through the power of innovative technologies are going beyond just providing mobile-phone enabled solutions and digital payment platforms, but with enormous potential of facilitating comprehensive digital financial inclusion through partnership and collaborations. However, there is a paucity of partnership between FinTechs and traditional banks/ insurance companies and bank’s limited information about SHFs that enables the provision of products that meet their urgent and specific needs.
While the FinTech-financial institution(s) marriage may seem too far for other FinTechs in Uganda, MobiPay AgroSys. Ltd has already partnered with DFCU to provide a comprehensive DFS for smallholder farmers in the Maize value chain in the Busoga region of Uganda. As part of the partnership, a leader farmer training was held on 3rd October 2017 at the Josa Hotel, Iganga to augment lead farmer’s knowledge on DFS and DFCU’s products; use hyper local language to educate and sensitize smallholder farmers on DFS; and subsequently, provide credit solutions to smallholder farmers. A total of 81 participants including financial inclusion and banking experts, lead farmers and members of farmer’s cooperatives participated in the training.
At the event, Mr. Eric Nana Kwabena Agyei (MD MobiPay) emphasized the urgency and importance of FinTech partnership with financial institutions including DFCU in financing agriculture digitally. Nana Kwabena Agyei said:
“FinTechs have innovative technologies that helps improve the lives of farmers through DFS. However, it is important for a stronger partnership and collaboration with other institution to reach more small and marginal farmers”.
He noted further that much as the partnership is important, there is the need for the partners to have SMART objectives and clearly defined roles. As observed in his work with smallholder farmers and their limited access to specific products, Eric also added that “Our partnership with DFCU is imperative to provide adequate information about (smallholders) farmers to enable the bank create products that suit the farmer’s needs”.
The Business Development Executive (DFCU), Mr. Andrew Mawejje reinforced the importance of FinTech-financial institution partnership and stated that FinTechs and other financial institutions should see themselves as partners in development, rather than “rivals”. Accordingly, he expressed DFCU is therefore ready to work with other FinTechs to facilitate digital financing of agriculture.
While presenting on the products and services offered by DFCU particularly in agriculture, Mawejje mentioned “DFCU is committed to the promotion of agriculture and has dedicated a portfolio of 15 per cent to agriculture in Uganda”.
He further added “at the various points during the cropping cycle, farmer require some capital to bolster their production. However, most smallholder farmers do not have wider windows to access such capitals. As a result, these farmers usually miss the season and production is affected”. However, their partnership with MobiPay is a step in the right direction to know the farmers and furnish them with the products that will meet their specific needs.
Mr. Andrew also took opportunity to educate the lead farmers on the role of the bank in supporting farmers through the provision of loans with lower interest rates and disrupted the myths most farmers associate with banks with respect to loan acquisition and payment. This was followed by episodes of drama that showcased to farmers the work of DFCU and how their various concerns and grievances can be addressed.
Appreciation from farmers
The farmers who were the main participants and centre of the tenet issues that were discussed expressed their appreciation for the MobiPay–DFCU partnership. Most importantly, some of the farmers mentioned that the approach by MobiPay is one of a kind given that they have been involved in the process to share ideas with banks and FinTech. These, the farmers deemed important and a priceless opportunity to have their voices heard and needs met through the discussions and products that would emerge from the training.
The way forward
The MobiPay–DFCU partnership is important to facilitate digital financing of agriculture and help improve the lives of (smallholder) farmers in the Maize value chain in the Busoga region, Uganda. Accordingly, each partner has resolved and committed to make the partnership worth having in order to reach more farmers by providing adequate information about farmers and provide appropriate products that will meet the urgent and specific needs of farmers and DFS.
In our next news update, The Mouthpiece of MobiPay AgroSys. Ltd, The MobiPay Blog will bring you one of MobiPay’s flagship incessant capacity building and customized DFS promotion in Uganda dubbed “: “Nebuuzaku” Digital Financial Services”
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