New award for bringing mobile payments to rural farmers


July 19, 2013

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  • Farmers in Indonesia struggle to make a living without access to markets and banks. Our new AgriPay system will put crucial financial services right on their mobile phones. Photo: Thatcher Cook for Mercy Corps

Utilizing technology to streamline and advance humanitarian aid across the world is at the forefront of Mercy Corps’ work. Distributing payments and disseminating information to our beneficiaries via mobile phones is now a common distribution channel in countries such as Kenya, Nepal and Mongolia.

Last year, we launched Agr-Fin Mobile, an initiative to connect farmers with mobile resources in Uganda, Zimbabwe and Indonesia. The program aims to increase the income of 180,000 low-income farmers by 30 percent within the first three years.

The idea is to bring together mobile services providers, agricultural experts, and financial services in one single mobile platform in each country — a simple, holistic service that is easy to use on even the simplest device. Farmers can look up weather patterns or apply for a loan, all from their phone.

But creating a network from scratch doesn’t happen all at once. In Indonesia, for example, we began with the information component, launching a SMS system for farmers to receive daily agricultural tips and submit questions to experts. Now, a generous grant from Visa Inc. will allow us to expand Agri-Fin’s mobile financial services in Indonesia.

Sixteen million smallholder farmers in rural parts of Indonesia struggle to earn a living at or near poverty wages. Lack of access to markets and financial services limits their ability to optimize their crops and maximize their distribution channels.

We’ve been working to improve financial services here since 2008, when we founded Bank Andara. Now a fully licensed commercial bank, it provides over 700 local microfinance institutions with capital and technical support so they can serve the needs of low-income entrepreneurs.

The Visa Innovation Grant award will help us deepen our commitment to helping people improve their economic prospects by putting AgriPay, a system to exchange payments with buyers and sellers on mobile phones, at farmers’ fingertips. In fact, we expect that over 1.4 million transactions will take place by 105,000 individual farmers within the first three years of this program.

How it works: AgriPay will allow farmers to pay for key inputs like seeds and fertilizer for major crops, including rice, maize, chili and potatoes. They can also make payments for loans, bills and remittances, and receive payments for their crops from major buyers and processors. These relatively small changes in farmers’ day-to-day transactions will yield big benefits to a population that operates on the margin.

The best part? This project promises to be scalable. It is our hope to roll out similar programming in many of our core countries and link hard-working farmers with the tools they need to improve their livelihoods by simply utilizing a mobile device.