This is a guest blog by Lee H. Babcock, an independent consultant. Formerly a Managing Director for Mobile Strategy at an iNGO he does research, design and implementation of mobile strategies that connect the base of the pyramid with formal economic activity.
It seems 2014 is shaping up to be the transition year into the next generation of mobile money. Starting six years ago this new service sector has created a lot of buzz and the level of private sector investment indicated by more than 200 platforms worldwide indicates it is here to stay. For the most part most of those platforms have been confined to the urban city centers but the ecosystem of private sector players (e.g. MNOs, financial institutions, solution providers) is now expanding into rural areas in pursuit of nationwide penetration. Matching this new market dynamic are two rapidly approaching trends that will characterize ‘mobile money 2.0’; interoperability and big data analytics. A third trend that bodes well for the inclusion of women emerges if we connect some dots.
In World Bank CGAP’s recent five year strategic planning exercise for innovative financial inclusion it seems the farmer as the unit of measurement is being shifted to the smallholder farming family. This broader approach, nicely portrayed by this Digital Finance Plus video will more explicitly engage women (and youth) because each household has income not only from agriculture but from remittances, off-farm labor and handicrafts and expenditures not only for agri inputs but for utilities, water, clean cookstoves, school fees, food, health and other household needs. As such, this broader approach presents the potential for much high transaction volumes and co-branding opportunities thereby increasing the value proposition for mobile money providers to service rural, agricultural communities.
Another connecting ‘dot’ was a key takeaway from the CTA ICT4AG conference in Rwanda in November. It was an excellent weeklong conference with more than 500 participants that reviewed and discussed separate ICT/mobile platforms for marketing, production, agri extension and much more. By the end it seemed there was a growing realization that for the most part all these platforms had the same overall back end and that eventually these platforms will converge. Indeed, the next issue of CTA’s magazine ICT Update, will not only explore the implications of different mobile money innovations in the agricultural sector but how the smallholder farmer family as a unit can benefit from these developments. Given that agriculture is the most significant economic contributor in rural communities, it further emerged that perhaps the agriculture sector can lead the charge in promoting cross functionalities of agri ICT/mobile platforms with energy, water, health other household requirements.
In 2014 and beyond agricultural mobile finance should present robust opportunities to further promote the financial and mobile inclusion of women. The main challenges of illiteracy, financial illiteracy and lack of trust will remain. We must be sure to integrate the gender-partial, user-centric lens of this broader approach to financial inclusion into the requisite market research into the cash usage behavior patterns of farming families. This more robust business case for mobile money in agricultural communities will help achieve for the base of the pyramid what the commercial banking sector did for the industrial revolution.
Image credit: Michael Spencer