Mobile finance provides channels for credit, savings, insurance, transfers and payments. It encompasses not only mobile money and mobile banking but other alternative delivery channels such as e-vouchers, debit cards, smart cards, branchless banking, ATMs and point-of-sale devices. Indeed, mobile money has been causing a huge stir since 2009, when M-Pesa surprised the industry by announcing it had turned a profit. The level of private sector investment indicated by more than 220 mobile money platforms worldwide indicates that it is here to stay.
Meanwhile, there is a growing need for more and higher quality agricultural production worldwide by more efficient and effective value chains. Sophisticated mobile financial tools that are used to facilitate more agricultural credit, savings, insurance, transfers or payments will be essential to making targeted value chains more efficient and effective. This issue of ICT Update can only cover a few of the rapidly emerging innovations in agricultural mobile finance, but these and others will pave the way for increasing financial inclusion and outreach to the previously 'unbanked' in a sustainable manner and help revolutionise agricultural value chain finance.
The feature article in this issue is about an exciting model that portrays how agricultural mobile finance is the key to unlocking the potential at the economic base of the pyramid in rural areas. SmartMoney rapidly evolved from being just a payments solution for cooperative buyers making mobile payments to farmers to becoming an electronic currency for the needs of the entire village-based economy.
Authors: Lee H. Babcock and Chris Statham