Zimbabwe case study: Lessons from a buyer's experience of mobile money

Last August, small-scale farmers in rural Zimbabwe were preparing to harvest their crop of chilies just like they do every year. But this harvest would be like no other. 

What made this season different was that two months before, almost 450 farmers in the region had registered as "EcoCash" customers. By linking their phones to the local mobile money platform managed by EcoNet, these farmers now had the option of being paid for their crops through their phone. And because a local chili buyer had also signed on to EcoCash, it worked.

The farmers were paid immediately and in full for their chilies--not usually the case when cash is involved.

It didn't happen organically. Last June, in Zimbabwe’s Domboshawa region, Mercy Corps piloted its Agri-Fin Mobile program, which built the partnership between EcoNet, specialized produce buyer KAITE, and small-scale farmers. Though everyone benefits, Mercy Corps' focus is to reduce hunger by increasing small-scale farmers’ productivity, and stabilizing their income. In trying out the idea, KAITE had a lot of lessons to share.

KAITE trains thousands of small-scale farmers around Zimbabwe in cultivating and processing organic herbs and spices to be sold at international fair trade markets, including chilies. Prior to the mobile phone option, coordinating cash payments was a huge challenge for KAITE. With only rough estimates of the quality and amount of produce farmers would bring to collection points, KAITE had to rely on approximations of the cash required. When purchasing in remote locations, this often resulted in cash shortages. Farmers would have to wait until KAITE could travel back to their village with more cash.

With EcoCash, KAITE purchased all of the produce available at one time. This allowed farmers to receive the exact payments for their produce via a secure, private mobile account on collection day. And, cashless payments meant both KAITE and the farmers weren't vulnerable to robberies.

Mercy Corps' Zimbabwe pilot, in which 448 farmers were trained and registered on EcoCash, proved that farmers were interested in the idea and able to receive payments through their mobile phones. In fact, they actually preferred it over cash.

For the farmers, the mobile payments options has also improved personal financial transactions. Farmers can now receive and send money to family members and friends, and make payments for groceries and school fees through the mobile phone.

For KAITE, the upfront investment in training and registering farmers paid off in increased overall efficiency. Now, even without Mercy Corps support, KAITE is planning to expand mobile payments to all regions of Zimbabwe where they operate.

“To reach Binga, in the northwest of Zimbabwe, costs us $528 just for the transportation, not to mention time and labor,” said Dominic Collenberg, CEO of KAITE, explaining the move to mainstream mobile payments in their operations.

“It's 1,600 km round trip – 10 hours minimum one-way. The whole trip takes several days. There’s no bank there, so we have been bringing cash. Just last month, we had planned on paying around 470 farmers $25,000 for rosella and safflower, but they had an excess of product worth around $2,000. So we registered the farmers still in need of payment and sent them the money through EcoCash.”

Obstacles remain, however. Some rural areas are still without network coverage. Still other areas lack nearby EcoCash agents to let farmers turn their mobile money into cash when needed. Sometimes local agents have limited cash themselves and aren't able to provide the adequate amount farmers wish to withdraw.

Yet the benefits of mobile payments to farmers and buyers alike seem to outweigh current inconveniences. Users are finding ways around obstacles, and are optimistic that further improvements are coming, including the expansion of network coverage. For example, KAITE has reached multiple farmers through one farmer who was better able to travel to a nearby agent, withdraw funds, and distribute to the other farmers.

“At the moment, it’s still in the infancy stage, but I see huge potential – if EcoNet installs boosters to improve network reach, as it has planned – then after we register all farmers for making payments, our next priority is pushing information and then improving coordination for production, collection and messaging to negotiate selling prices,” said Mr. Collenberg.

Registering farmers to make mobile payments is an important first step in laying the groundwork to bring numerous services to rural farmers and agro-buyers. As remote areas like this gain more access to mobile networks, new opportunities are soaring for rural farmers to reap the benefits of financial services and timely agriculture information through their mobile phones.

“Although we haven’t started pushing information yet, we are preparing for it," Collenberg added. "We regularly hold farmer trainings and have developed brief ‘grower guides’ for each product we buy. It describes the complete cropping timetable, as well as recommendations for the type of soil to plant in, the rotation with other plants, laying out the seedbed, fertilizing, weed control, irrigation, pest and disease control, harvesting and drying. All of that information is too long for a text message, but we can use texts to send simple prompts to remind farmers of all these things at the time they need to act.”

“Moving to mobile payments is something we never would have done without Mercy Corps’ actively bringing us together with EcoNet,” said Collenberg. “It's a lot of work--very time consuming, and we would never have initiated it on our own. But we will make the time to register all our farmers in the future, because we realize it’s worth it.”

This article was adapted from Mercy Corps.

Learn more about Mercy Corps' Agri-Fin Mobile program, bundling financial services and agriculture information on a mobile platform.