In a new study that was conducted by the United Nations-based Better Than Cash Alliance firm, has shown how agriculture nonprofit organization; One Acre Fund in partnership with Citi Inclusive Finance, successfully digitized loan repayments for farmers in Kenya, a move that significantly boosted transparency and efficiency, driving economic opportunity and financial inclusion for thousands of smallholder farmers and their families.
One Acre Fund, supported by Citi, enabled farmers to easily make loan repayments via mobile money instead of cash, reducing the uncertainty, inefficiency, insecurity and high costs previously caused by cash transactions.
One Acre Fund can now reach more farmers with greater reliability, and staff can spend almost half as much time collecting payments in cash, using that extra time to help farmers increase their incomes through training and educational programs.
With One Acre Fund’s package of services, including training and inputs like seed and fertilizer, the average farmer participating in the program earned nearly 50 percent more than peer farmers who do not participate.
The study findings included; increased participant satisfaction due to transparency and convenience, 80 percent decreased in repayment processing costs while 85 percent decreased instances of repayment fraud, and also reduced processing time for each repayment from 12-16 days to 2-4 days; farmers now know immediately when their payment is received, eliminating the worry about whether it arrived.
And finally, 46 percent of time was reduced for staff working on collections, allowing for more time helping farmers improve agricultural practices while the women farmers benefited especially, feeling safer about payment deliveries.
In a press statement, Mike Warmington; Director of Microfinance Partnerships at One Acre Fund said; mobile repayments have allowed the firm to increase their efficiency and provide better service to the farmers.
“We’re excited to be working at the forefront of this technology in the smallholder agriculture lending sector, and in our experience, farmers were empowered to thrive in these communities. Clients receive immediate confirmation of payments as they happen, enabling them to better manage their businesses and family finances,” Mike said.
Among other benefits, digitization enables efficiency and security, and drives innovative and inclusive business models.
In a conclusion, Oswell Kahonde; Africa Regional Lead at the Better Than Cash Alliance, said; digital payments are essential to building sustainable business models and creating long-term impact.
“By enabling smallholder farmers to make and receive payments digitally, we are creating transparency and accountability which translates to numerous benefits and empowers people to take control of their finances,” Kahonde said.