AgriFin Mobile Uganda Partnership Selection Lessons Learned


October 17, 2012

  • partner_selection_uganda.jpg
    Agri-Fin Mobile partners bring a unique set of skills and expertise and require an equally unique value proposition to stay engaged. Photo: partner_selection_uganda.jpg

Cross sector partnerships are a critical element of nearly all programs, but especially so for the Agri-Fin Mobile program being implemented by Mercy Corps in Indonesia, Uganda and Zimbabwe.

Each potential partner, including, mobile network operators (MNOs), financial institutions, local and national governments, research institutes, farmer organizations, and mobile application developers, bring a unique set of skills and expertise and require an equally unique value proposition to stay engaged. By combining the skills and interest of various sets of partners, the Agri-Fin Mobile program hopes to improve products and services for small holder farmers, decrease costs of operation, and improve the partner’s ability to monetize and create revenue streams; all while increasing farmer’s income and access to services.

Understanding the perspectives of each stakeholder and building successful cross-sector partnerships is thus critical for the success of the program and for developing a viable mobile agriculture and financial platform. In this context, Mercy Corps recently carried out a stakeholder analysis in Uganda to determine the role, incentives and limitations of each player in the mobile agriculture space.

This was mainly done to ensure program sustainability long after Mercy Corps exits. In addition, the partners analysis was done so as to understand the unique value proposition that each partner can bring into the program, what the financial incentive is to keep them engaged, what are the constraints to the business operations, how they can leverage off each others’ strengths and what roles they should each play in delivering services to the farmers.

Partner selection process in Uganda

The market assessment in Uganda focused on financial institutions currently providing agriculture focused financing, produce buyers and processors with warehousing facilities and agro-input dealers for seeds and chemicals who are using their own staff and resources to conduct training. The information gathered from interviews showed that the market leaders in the financial and telecommunication sectors have a high aversion to risk and are not actively exploring new, innovative approaches to serving the lower end markets especially in the low-margin agriculture value chains. With this in mind, the program needs to follow an agnostic model which is not dependent on the individual players and also work with the smaller players who are seeking to differentiate themselves in the market by providing value added services for different clientele in low-margin markets. There is currently no platform that provides the capability to integrate financial institutions, MNO mobile wallet platforms, mobile ag information services, with tools to track farmer production capacity and capability.

Moreover, on the tail end of the production process, is the fact that the produce buyer and input dealer markets are very fragmented with weak distribution channels and “unhealthy” competition; so these need to be woven together to drive transactions leading to revenue for the different partners.

Methodology used in the business analysis model

The analysis model was based on who would host the platform that the end user platform. The options available were MNO-Led, Bank-Led and an independent third party platform provider. The independent third party platform model was selected because of the entry of a new provider who is currently operating in Kenya, which provides an agnostic model for integrating multiple financial institutions, MNO mobile wallets and agricultural advisory information providers. While this model was selected, the pilot will work with selected partners to kickstart the process.

Challenges faced in selecting the pilot business model

• The need to be critical in selecting the most appropriate potential partners was one major challenge that was identified during the assessment. The major concern of all the partners was building partnerships based on shared value so that in the future none of the partners will dominate others. For example, when developing content for farmers, one of the key sources of information is government, however, delivery channels may be best used through the private sector;
• It was also noted that most of the partners such as banks and MNOs are generally interested in increasing or maintaining their customer base, increasing their average revenue per user, and developing additional revenue streams from their current stock of customers, but do not necessarily envision agriculture as the way to do this. The challenge then was how to drive transactions through the business model to derive revenue for the partners and build "profiles" for the farmers to enable additional services to be added;
• The other challenge was how to exchange and integrate the available information with other external systems to support interoperability at a later stage for scaling purposes.

Lessons learned

• If those parties with the highest market share are not agile, innovative and transparent potential partners, then it is necessary to seek out smaller partners with a shared vision and an appetite for risk taking in the development of new, differentiated and innovative products and services;
• Each partner must recognize the business case and be willing to co-invest;
• The channel to small holder farmers is a key priority, so always look for opportunities to integrate multiple channels to increase distribution of advisory information and services to farmers to drive adoption;
• Seek partners that are umbrella organizations for producers, buyers or input suppliers in order to reach a higher number of beneficiaries with minimal resources. Umbrella organizations can also help influence members, aggregate impact as well as ensure that the program is not providing unfair advantage or discouraging competition among industries;
• Transaction volumes are critical, look out for areas to start with which drive transactions and therefore usage, hence working with produce buyers at the tail end of production and input suppliers at the beginning of production, as well as working in value chains that have on-going or multiple harvest periods per year, such as horticulture or dairy.

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