Technology
Digital marketplace for East African farmers
Mobile money 2KUZE
Mastercard recently launched a new digital marketplace for East African farmers to sell their crops and receive payment via their mobile telephones .
“ 2Kuze ” ( pronounced “ tuh-KOOzay ”) works with existing mobile money systems like mPesa to facilitate transactions between farmers , agents and banks , the financial-services corporation said . VOA News reported the World Bank ’ s Consultative Group to Assist the Poor ( CGAP ) estimates there are roughly 500 million farming households across the world that fall under the category of “ smallholder ” – made up of no more than a few hectares of land , and run primarily by family members .
In East Africa , smallholder farmers trying to get the best price for their crops are often dependent on middlemen – agents , buyers and sellers who leave them with inconsistent and unpredictable returns . That problem is exacerbated by the farmers ’ lack of access to financial tools , such as bank checking or savings accounts . “ What ’ s historically been used has been these middlemen arriving at the farm gate , or setting up marketplaces in local communities , where they ’ re doing deals there and coming back later , and paying those farmers in cash after they ’ ve been able to sell the goods … And that can be a gap of as much as two weeks ,” said John Sheldon , a senior vice president at the company in charge of innovation .
Increase farmer ’ s earnings
2Kuze capitalizes on the widespread use of mobile phones across Africa to conduct peerto-peer monetary transactions , Mastercard says , and the program is intended to increase farmers ’ earnings by giving them access to a wider network of buyers and faster transactions .
“ With technology comes great scale , and so if we can help [ buyers ] work with 10 times the number of farmers they ’ ve historically been able to work with … they have the opportunity to make more money , even if the margins on any given transaction is lower .”
For 2Kuze , Mastercard is partnering with non-profit
Cafedirect Producers Foundation , which says it works with 300,000 smallholder farms around the world to promote fair-trade practices . Farmers in Kenya , Tanzania and Uganda participated in the development of 2Kuze , and the pilot program is launching with 2,000 smallholder farmers in Kenya ’ s Nandi Hills region , famous for its tea farms .
Reaching those outside the system
It ’ s not yet clear how Mastercard will profit from its efforts . Sheldon said the company is still experimenting and “ testing multiple potential revenue models , whether it ’ s percentage of sale or licensing access to very , very large-scale buyers .”
One indirect benefit for smallholder farmers is the creation of a financial log or history , which could prove helpful when they seek credit or loans to expand their farms .
“ Each bank has their own credit model that they ’ re utilizing , and [ with ] our ability to provide them with the visibility into these transactions , they can … do some of those key credit assessments ,”
Sheldon said . East African farmers ’ financial performance is not measured by a scoring system like the FICO analyses used in the United States and many other countries .
Mastercard is not the first company to offer financial services to smallholder farmers in developing countries . Matthew Saal , head of digital financial services at the International Finance Corporation , said Mastercard ’ s system has “ been both developed and deployed in East Africa , providing tailor-made solutions to meet the great local need for expanded financial access in rural areas .”
IFC is a member of the World Bank group that finances and provides advice for private-sector ventures in developing countries .
“ IFC is working with partners like Mastercard , and others around the world , toward the shared goal of achieving Universal Financial Access by 2020 , and believes that digital platforms have a critical role to play in reaching the 2 billion adults globally that aren ’ t part of the formal financial system ,” Saal said .
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Just “ Uber ” a tractor with Trringo ?
India ’ s largest tractor seller Mahindra and Mahindra Ltd
have an app that is known as the “ Uber for tractors ”. They are hoping that Trringo will get tractors moving around much like Uber has in the car rental arena .
SABI | FEBRUARY / MARCH 2017
In essence , Trringo offers an easy-to-use app for farm equipment rentals .
The venture Trringo operates on a franchisee-based model and aims to bring in digital technology to the tractor rental business .
Mahindra launched the enterprise last year when sales in tractors in India were sluggish due to a drought there . They believe the app could help farmers to utilise tractors when they need them most , by simply renting . The group also believes it will help India ’ s farmers to mechanise more widely – reportedly 35 % of farms in India are mechanised .
Trringo was launched in India but Mahindra hopes to take the concept to further countries .