Zambia has more than two million smallholder farmers alongside a rural population of almost 9.7 million. About 40% of these are financially excluded
Zambia has a rural population of about 9.7million people, 40% of which do not operate any bank account. Paying for goods and services is difficult for this set of people. They cannot receive payment for goods and services via online payment portals, so a lot of productive hours are lost trying to go about their economic activities.
The average farmer lives many kilometres away from his closest neighbour, and even farther away from agro-dealers and banks. With over two million small-holder farmers, sending and receiving money conventionally is difficult not to mention it significantly reduces their productivity. Being unable to make and receive digital payments hurts the planning and easy flow of goods and services. Where banking services are available, they are sometimes limited and can further take time to process transactions.
Farmers are vulnerable to too many avoidable risks with the status quo, and so getting rid of these inconveniences will have far-reaching effects on rural communities. Reduced down times as a result of payment transactions and confirmations will improve the flow of goods and services.
Zanaco Bank identified this bottleneck and has partnered with Mercy Corps/Agrifin Accelerate (AFA) and the UNCDF (UN Capital Development Fund) to develop and test their strategy to reach farmers directly and avail them of the opportunity to send, save and receive money with ease. Features like agronomic information and financial literacy will be added to accelerate the financial inclusion of farmers in the Zambian economy.
How AgriPay was conceived and introduced
Before AgriPay was released by its partners, AFA conducted market research to understand the needs of farmers and what their distinct financial challenges were. This formed Zanaco’s customer-centric design process for the development of the product.
When the product was fully developed, the team set out to design strategies for its release to its rural customer target.This strategy involved using the Booster Team model – a model modified from UNCDF’s work with a coffee value chain in Uganda. UNCDF championed the use of the Booster Team to bring in agents that would enhance last-mile service delivery and build a strong, self-sustaining ecosystem around the use of the AgriPay account. The Booster Team also got smallholder farmers involved.
The developing partners (Zanaco, AFA, and UNCDF) identified the need to collaborate with other actors in the value chain to encourage easy adoption by agribusinesses. This collaboration was supposed to help AgriPay leverage on their customer base to bring in other customers that may be outside the rural farmer target market. Several agents offering banking services sprang up, as a result, offering banking services closer to farmers.
The bank channelled the product in six provinces, with the Booster Teams comprising 15 – 20 youths, who had received sufficient training in sales and had appreciable knowledge of the product. These teams were equipped to demonstrate the product to potential customers.
By the end of the pilot phase, a partnership with Musika (a non-profit organisation that aims to support private sector development in small-scale agriculture) had already yielded about 50% of Xpress agents and members of the Cotton Association of Zambia had already contributed 60% of activated farmers’ accounts.
Who opened AgriPay accounts?
In May 2019, Zanaco and UNCDF the Booster Teams were deployed to begin their awareness and on-boarding activities. Beginning in Central and Lusaka Provinces, and going on to Copperbelt, Luapula, Eastern, and Southern, each Booster Team responded to smallholder farmers’ questions and addressed concerns promptly.
This direct system of support boosted customer confidence, put them at ease with the new accounts, and was responsible for signing up 307 Xpress agents to the AgriPay ecosystem.
Around September 2019, AgriPay had signed up 3,030 customers, 31% youth and 53% female, and farmers were pleased to embrace the account because they were custom-made to their needs.
Brillian Handondo, a farmer in Southern Province said, “This account has really helped me. Once I receive money, I’m able to easily transact, such as sending money to my child in college.” This simple transaction was previously difficult to do.
What were the contributing factors to AgriPay’s success?
The AgriPay pilot achieved what it aimed to do – increase access and usage of digital financial services by under served sections of the population.
Many decisions were pivotal to the success of AgriPay, one of which was the decision to unveil the product in stages and learning from challenges encountered in each phase to ensure smooth implementation and up-scaling. Pre-sensitisation efforts also meant Booster Teams were very familiar with the product and could disseminate the right information to farmers. Key partners like the Cotton Association of Zambia, Dairy Association of Zambia, and Vitalite Zambia helped build trust in the product. Other partnerships with various non-profit organizations and farmers’ associations gave them the mandate to be ambassadors of AgriPay and present the product to farmers.
Cotton Association savings groups and Vitalite traders became agents, as AgriPay leveraged on the strength of these organizations to reach potential customers.
The Booster Team’s success was driven by the inherent trust customers and agribusinesses have in the partner or the agribusinesses they are used to working with. This is an immense success factor for AgriPay.
For the successful extension of AgriPay to other provinces in Zambia, sales teams have to understand the culture of target communities. It is important to learn the type of farming carried out in a locale and carry out sensitization based on their schedules. Flexibility and learning from each phase also mean where necessary, the bank may engage floating agents who could better reach farmers in certain areas rather than fixed agents.
AgriPay is successful because it provides a platform to increase financial inclusion for farmers, and the account also allows digital expansion for the smallholder farmer and their communities. This digital ecosystem of services significantlyenhances the quality of life in these rural communities and everyone can contribute more to the economy.
