By Kyla Yeoman
This month, Orange Uganda, a telecom operator, will begin specifically targeting farmers as potential customers with its mobile wallet product, Orange Money, giving them a safe, convenient way to buy farming supplies and get paid for their harvests. This is the first time a telecom operator will take mobile wallet technology--already hugely successful around the world for cash transfers and payments - and apply it to the agriculture sector.
The financial need is great: Across the country, there are only about 1.5 million bank accounts for 33 million Ugandans. Most of those accounts don’t belong to rural farmers, often excluded from formal financial services. A MAP International study estimated that the 381 physical bank branches across the country only cover about 10 percent of its banking needs, leaving a huge gap that mobile money is poised to fill.
Orange, which currently has about 30 percent of the country’s telecom market share, will be working with international humanitarian aid organization Mercy Corps to understand this new client segment and their unique needs. The six-month trial will work with 10,000 farmers to set up personal Orange Money accounts and to begin buying inputs like seeds and fertilizer and receiving payments from local agricultural buyers, who usually conduct business in cash.
Orange will further build out the ecosystem for mobile payments by increasing the mobile money agent network, people who essentially serve as the physical ‘bank’ branch where farmers can cash in and cash out. Orange and Mercy Corps plan to work with existing agriculture companies, crop aggregators and farmer associations to begin accepting Orange Money from farmers for payments and fees.
“Farmers make a lot of purchases and sales, and represent a significant new market segment for a mobile money operator,” said Lesley Denyes, program director of Mercy Corps’s Agri-Fin Mobile program. “Providing farmers with a secure way to make financial transactions, like loans and savings, means they’ll be able to grow and sell more food.”
It’s a simple system that works on the most basic mobile phone. Farmers give their phone number to the buyer, negotiate a price, and wait for the SMS message telling them that funds have been transferred to their account. They can then send these funds on to others, or cash the amount out at a local merchant. They can also use the system to buy inputs like seeds and fertilizer using the same SMS-style messages to authorize payments.