Digital Technologies For Financial Inclusion Of Smallholder Farmers Needs Assessment In Three States Of India

Financial instruments such as savings, loans, and insurance are critical tools in managing risk for smallholder farmers across the developing world. Although smallholder farmers are disproportionately affected by adverse events, they are the least likely to have access to formal loans, insurance, or bank accounts, leaving them less prepared to manage weather and disaster risk. As the effects of climate change intensify, building resilience—the ability to mitigate, cope, and recover from shocks and stresses without compromising future welfare—is essential for reducing rural poverty and improving food and nutrition security.

The evidence that women both drive agricultural production and rely on it for their livelihoods means that greater financial and informational service provision to women, especially through digital channels, could increase the efficiency and effectiveness of their labor. While the numerous barriers to women's access to Digital financial Services (DFS) are clear, clarifying the best methodologies by which to overcome these is both dependent on situational context and still subject to research and testing. This report provides the state of play of current and promising efforts that use mobile technology and digitized data to close the gap in access to finance for women in agriculture. It includes three components: 1) a review of the financial characteristics and needs of women in agriculture, based on an extensive literature review; 2) a stock taking of initiatives that use mobile technologies and digitized data for agricultural finance and women's financial inclusion; and 3) an analysis of gaps in existing initiatives that would increase access to DFS by women farmers, laborers and women-owned agricultural MSMEs. The report also examines the regulatory environment around DFS and ways that regulators are working to increase responsible access to women.

This study—which includes a pilot intervention in Kenya—aims to further the state of knowledge about the emerging trend of disruptive agricultural technologies (DATs) in Africa, with a focus on supply-side dynamics. The first part of the study is a stocktaking analysis to assess the number, scope, trend, and characteristics of scalable disruptive technology innovators in agriculture in Africa. From a database of 434 existing DAT operations, the analysis identified 194 as scalable. The second part of the study is a comparative case study of Africa’s two most successful DAT ecosystems in Kenya and Nigeria, which together account for half of Sub-Saharan Africa’s active DATs. The objective of these two case studies is to understand the successes, challenges, and opportunities faced by each country in fostering a conducive innovation ecosystem for scaling up DATs. The case study analysis focuses on six dimensions of the innovation ecosystem in Kenya and Nigeria: finance, regulatory environment, culture, density, human capital, and infrastructure. The third part of the study is based on the interactions and learnings from a pilot event to boost the innovation ecosystem in Kenya. The Disruptive Agricultural Technology Innovation Knowledge and Challenge Conference in Nairobi, Kenya, brought together more than 300 key stakeholders from large technology companies, agribusiness companies, and public agencies; government representatives and experts from research and academic institutions; and representatives from financial institutions, foundations, donors, and venture capitalists. Scaling Up Disruptive Agricultural Technologies in Africa concludes by establishing that DATs are demonstrating early indications of a positive impact in addressing food system constraints. It offers potential entry points and policy recommendations to facilitate the broader adoption of DATs and improve the overall food system.

This book shares research and practice on current trends in digital technology for agricultural and rural development in the Global South. Growth of research in this field has been slower than the pace of change for practitioners, particularly in bringing socio-technical views of information technology and agricultural development perspectives together. The contents are therefore structured around three main themes: sharing information and knowledge for agricultural development, information and knowledge intermediaries, and facilitating change in agricultural systems and settings. With contributions reaching beyond just a technological perspective, the book also provides a consideration of social and cultural factors and new forms of organization and institutional change in agricultural and rural settings. An invaluable read for researchers in international development, socio-economics and agriculture, it forms a useful resource for practitioners working in the area.

The paper finds that while there are important regional and national differences, countries are broadly embracing the opportunities of fintech to boost economic growth and inclusion, while balancing risks to stability and integrity.

The lack of financial inclusion among rural, smallholder farmers in the developing world remains widespread, and particular so in sub-Saharan Africa, where as little as four percent of the population have access to a personal bank account. In most cases, banking institutions primarily focus their financing operations on commercial farming operations, despite the fact that the majority of the population is involved in smallholder farming operations. As a result, these aÌ22́Ơ¿3unbankedaÌ22́Ơ℗+ smallholder farmers lack the ability to grow their farming operations, which prevents these economies from obtaining sufficient growth. The inability of traditional financial services to address smallholder farmersaÌ22́Ơ4́Ø needs stems from, amongst other reasons, the remoteness of such farmer operations, which is associated with substantially high transaction costs and per-client operational costs. Moreover, rural farmers typically lack sufficient collateral, making such financing unfeasible from a financial institution perspective. Nonetheless, there does exist great potential to reverse such low productivity trends through the provision of services which can adequately serve these unbanked smallholder farmers. Such services should address aspects of extension services, marketing services and specifically financial services. Such services which are suitable for attempting to service rural farmers must take into account the ubiquitous nature of mobile phone technology in sub-Saharan Africa. While most individuals who are involved in smallholder agriculture lack access to a personal bank account, the opposite is true regarding the utilisation of mobile phones. It is this mobile platform which presents the greatest opportunity to increase the proportion of the smallholder farmer population which finds benefit from financial services. There are success stories from numerous developing countries which have aggressively pursued mobile money services, which are aimed at servicing the unbanked proportion of the population, as an avenue to increase financial inclusion for its people aÌ22́Ơ0́− KenyaaÌ22́Ơ4́Øs M-Pesa being the most notable example. While lessons can be learnt from the M-Pesa model in Kenya, the potential for such a service must be evaluated in Mozambique where a mere four percent of farmers have access to formal financial services. In order to evaluate the potential of mobile money services in Mozambique, a sample population was selected in the province of Manica, in central Mozambique. This sample population was surveyed with the intent to establish: i. The extent to which farmers are included in the formal financial sector. ii. Whether rural farmers in Mozambique have in fact adopted mobile technology services to the same extent as most of its sub-Saharan counterparts, and the extent to which rural farmers are willing to utilise such technology in order to enhance their levels of financial inclusion. iii. If farmers are willing and able to adopt mobile money services, where the farmers see that they could benefit the most from such services. Do farmers have enough knowledge on such services to encourage the adoption of such services? If not, what kind of farmer training is needed on the concepts of mobile money services? The survey did indicate that Mozambique has followed a similar path to much of its sub-Saharan African counterparts with respect to mobile phone technology adoption, with most farmers owning a mobile phone. Furthermore, the survey established that there is a lack of financial inclusion among rural farmers which emphasises the need for alternative methods of financial services provision. The survey respondents indicated that they are aware of mobile money services; however, they lack sufficient knowledge on such services, which deters the respondents from adopting such services. While the majority of the rural farmers who took part in the survey indicated that they do not currently utilise a mobile money service, the farmers that are making use of such services have come to terms with the various benefits that mobile money services present, as much of these respondents utilise their mobile money service on a frequent basis in order to execute financial transactions. In order to enhance the adoption of mobile money services, a structured introductory and roll-out process is required whereby rural farmers are introduced to mobile money services and their various benefits and functionalities. Given the general lack of knowledge on mobile money services among rural farmers, and in line with the results obtained from the survey, a structured training regime is is needed which addresses the various knowledge gaps identified by the survey, while simultaneously demonstrating the various benefits of such services, as well as how basic mobile money transactions can be executed. Such areas of farmer training are likely to promote the adoption of mobile money services, bringing rural farmers closer to the formal financial system and allowing such farmers to transact in a way previously not possible.

"Smallholder farmers are the stewards of more than 80 percent of the world's farms. These small family businesses produce about one-third of the world's food. In Africa and Asia, smallholders dominate the production of food crops, as well as export commodities such as cocoa, coffee, and cotton. However, smallholders and farm workers remain among the poorest segments of the population, and they are on the frontline of climate change. Smallholder farmers face constraints in accessing inputs, finance, knowledge, technology, labor, and markets. Raising farm-level productivity in a sustainable way is a key development priority. Agribusinesses are increasingly working with smallholder farmers in low- and middle-income countries to secure agricultural commodities. More productive smallholders boost rural incomes and economic growth, as well as reduce poverty. Smallholders also represent a growing underserved market for farm inputs, information, and financial services. Working with Smallholders: A Handbook for Firms Building Sustainable Supply Chains (third edition) shows agribusinesses how to engage more effectively with smallholders and to develop sustainable, resilient, and productive supply chains. The book compiles practical solutions and cutting-edge ideas to overcome the challenges facing smallholders. This third edition is substantially revised from the second edition and incorporates new material on the potential for digital technologies and sustainable farming. This handbook is written principally to outline opportunities for the private sector. The content may also be useful to the staffs of governmental or nongovernmental development programs working with smallholders, as well as to academic and research institutions."--

In 2011 the World Bank—with funding from the Bill and Melinda Gates Foundation—launched the Global Findex database, the world's most comprehensive data set on how adults save, borrow, make payments, and manage risk. Drawing on survey data collected in collaboration with Gallup, Inc., the Global Findex database covers more than 140 economies around the world. The initial survey round was followed by a second one in 2014 and by a third in 2017. Compiled using nationally representative surveys of more than 150,000 adults age 15 and above in over 140 economies, The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution includes updated indicators on access to and use of formal and informal financial services. It has additional data on the use of financial technology (or fintech), including the use of mobile phones and the Internet to conduct financial transactions. The data reveal opportunities to expand access to financial services among people who do not have an account—the unbanked—as well as to promote greater use of digital financial services among those who do have an account. The Global Findex database has become a mainstay of global efforts to promote financial inclusion. In addition to being widely cited by scholars and development practitioners, Global Findex data are used to track progress toward the World Bank goal of Universal Financial Access by 2020 and the United Nations Sustainable Development Goals. The database, the full text of the report, and the underlying country-level data for all figures—along with the questionnaire, the survey methodology, and other relevant materials—are available at www.worldbank.org/globalfindex.

Agricultural finance has come a long way in the past 15 years. After the concerted efforts of GOI, supported by RBI and NABARD, towards doubling of agricultural credit flow in 2004-2005, the growth in credit flow to the sector has been robust with an impressive CAGR of 18% between 2004--2005 and 2019-2020. While outreach increased, the Terms of Trade (Farmers and Non-farmers) has largely been on a declining trend, reflecting the underlying stressed conditions in farming. There is a challenge of inclusion, where small and marginal farmers continue to struggle for suitable and affordable credit products and access. This book summarizes the current state of agricultural finance in India, highlighting policy blind spots and grey areas. It documents the important advancements made in the agri-finance space in the last few years. The book covers various aspects of Agri-Finance Policy; institutional appetite and architecture for agriculture credit; formal financial services for enterprises in agriculture; agri-business, including FPOs; and innovations in credit, insurance, delivery mechanisms for agri-sector.

Asia has made significant progress in financial inclusion, but both its across-country and intra-country disparities are among the highest in the world. The gaps between the rich and the poor, rural and urban populations, and men and women remain deep. Income is the main determinant of the level of financial inclusion; but other factors, such as geography, financial sector structure, and policies, also play important roles. While some countries in the Asia-Pacific region are leaders in fintech, on average the region lags behind others in several important areas such as online (internet) purchases, electronic payments, mobile money, and mobile government transfers. This Departmental Paper aims to take stock of the development and current state of financial inclusion and shed light on policies to advance financial inclusion in the region. The research focuses on the impact of financial inclusion on economic growth, poverty reduction, and inequality, linkages between financial inclusion and macroeconomic policies, as well as structural policies that are important for improving financial inclusion. Given the increasing importance of financial technologies (fintech), the paper also provides a snapshot of the fintech landscape in the Asia-Pacific.