In September 2020, with support from the Australian Government (DFAT), the GSMA launched a joint Call To Action (JCTA) aimed at agribusinesses, agritech companies and financial services providers (FSPs) in Papua New Guinea to identify a consortium that will work towards improving access to credit for smallholder farmers.
We are excited to announce that, following a competitive selection process, local consortium consisting of agribusiness Kamapim, Ltd., agritech Field Buzz and FSP MiBank was selected to pursue the objectives of the GSMA AgriTech programme activities in Papua New Guinea. The consortium will receive targeted in-kind support from the GSMA to design, develop and pilot test a credit product based on smallholder farmer needs.
Meet the consortium partners
Kamapim Ltd. is involved in vanilla procurement and export. The agribusiness operates in Madang Province, one of three in region known as Momase, procuring from 3,000 farmers who receive training to improve the quality of the produce. Kamapim perceives financial inclusion as vital to their commercial activities as access to credit can facilitate additional investment in farms and growth of procurement volumes.
Field Buzz supports agribusinesses in emerging markets to manage last-mile distribution through mobile technology. The agritech tool aims to track field-level interactions between suppliers and buyers of crops and digitise credit procedures in the field. For Field Buzz, this project offers potential to further evolve their approach to credit and facilitate the scale-up of company activities further afield.
MiBank is a licensed micro bank in Papua New Guinea with 16 branches across the country. It was the first licensed financial institution in Papua New Guinea to deploy a mobile wallet, called MiCash, and a microinsurance product called MiLife. MiBank believes that establishing a viable credit scoring system that considers farmers’ irregular cash flows will eventually lower interest rates, resulting in increased access to credit and other financial services for farmers.
Financial inclusion landscape
Financial exclusion in Papua New Guinea is acute, especially in rural farming areas, a consequence of a geographically dispersed population that speaks over 800 different languages and limited banking infrastructure (bank branches and ATMs). For farmers, access to credit is critical as it enables them to address agriculture-related and non-agriculture-related financing needs. Access to credit from FSPs requires an economic identity that most smallholder farmers do not have, but mobile-based digital agriculture tools already operating in Papua New Guinea generate digital financial footprints populated with farm and farmer data. When shared with an FSP, this data can be used to perform credit risk assessments thus offering a pathway to financial inclusion for farmers.
The consortium will support farmers’ pathway to financial inclusion through the:
- Development of mechanisms for sharing farm and farmer data that are being collected by agritech tools and agribusinesses;
- Establishment of a system for farmer credit scoring; and
- Design, development and pilot testing of a credit product based on farmer needs.
The role of the GSMA
GSMA will help consortium partners to achieve these objectives by offering the following types of support:
- Targeted consultancy (business, technical and agriculture expertise);
- Human-centred design (HCD) approach in product development;
- Credit scoring consultancy services;
- Tailored in-country research supporting product design and data mapping for credit scoring;
- Knowledge sharing opportunities with practitioners in the agritech ecosystem; and
- Partnership brokering between consortium members.
In the first quarter of 2021, GSMA AgriTech and the consortium of partners will conduct design research to understand the credit needs of smallholder farmers, their attitudes and behaviours with regards to financial decision-making and map current options for farmers to obtaining credit. The research also aims to unveil types of data that can enable FSPs in Papua New Guinea to assess the credit risk of previously unbanked farmers resulting in the development of a minimum viable credit product and mapping of data sources and touchpoints for the development of a digital credit scoring model.