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All things ICT and mobile germane to the base of the pyramid

Why a Common Platform is Within Reach: Mobile finance and the emergence of a comprehensive ICT4D mHub platform?

I had the pleasure of participating in and being a lunch table discussion leader for the July 2015 ICT4AG conference in Washington, D.C. As I reflected on the various presentations and coffee break conversations, it seems we are already well on our way toward imagining what the next generation of ICT4AG (information communications technology for agriculture) can offer. But what this blog proposes is a broader view of the next generation of ICT4D (information communications technology for development); one that breaks down the inertia of our silos toward a common platform, a chain of sectors linked together by finance. The potential for doing this is not limited by the technology but only by our imagination and commitment. Currently there are numerous applications but they are not synced with each other. What is truly needed (and possible) is a comprehensive mHub type of platform that is multi-sectoral (e.g. agriculture, health, education, etc.) and multi-functional. This is an expansion of what was a formal outcome of another ICT4AG conference in Kigali, Rwanda, in November 2013. Like the July 2015 conference, the Kigali conference imagined the next generation of ICT4AG would be a comprehensive platform(s) that includes multiple agriculture functionalities that align with...
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Three Steps to Jumpstart Agriculture Mobile Payments: Step 2 – forming strategic alliances

Editor’s note: This is the second of a three-part series that began last week, laying out three steps for embedding mobile money into agriculture development at the BoP. Click here for part one and part three. The new industry of mobile money began as recently as 2007 and has rapidly saturated the large urban city centers in East Africa. West Africa and elsewhere in the world are following close behind. The next challenge for the industry is to roll out into rural areas in further pursuit of breaking even – and even generating a return on investment. In their 2013 state of the industry report, GSMA, the umbrella organization for mobile network operators worldwide, acknowledges this challenge as well as the need to position mobile money agents in the right rural areas to have maximum impact. Meanwhile, a mobile payments strategic alliance partner for the cotton sector in Zambia believes a race is underway among large cotton buyers to have the fastest speed of payment to farmers. These same types of alliances that link large commodity buyers with mobile payments providers have emerged in Uganda, Kenya, Ghana and elsewhere. There are a number of dynamics that can strategically align a...
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The Next Great Innovation in Finance: Lee Babcock of ACDI/VOCA on the disruptive potential of mobile money

Editor’s note: As part of NextBillion Financial Innovation’s launch, we invited a number of leaders to contribute their views on where innovation is heading, and what obstacles remain. Today Lee Babcock, Managing Director of Mobile Strategy at ACDI/VOCA, describes how different stakeholders can help mobile money become the next innovation to transform finance at the BoP. Microfinance was the last big financial innovation. Mobile money will be the next. When Mohammad Yunus pioneered the Grameen Bank in 1976, nobody believed microfinance institutions (MFIs) could be commercially sustainable. But there was hope in the model’s ability to provide lending to the very poor, so donors helped start MFIs around the world. The organization I work for, ACDI/VOCA, established a dozen MFIs, with USAID support, that have disbursed more than $1 billion in loans to microenterprises, smallholders and rural families. Once it was clear that MFIs were commercially sustainable, the private sector stepped in to expand financing. Donor-financed and now privately financed MFIs have served more than 154 million clients worldwide but fall far short of serving the 2.5 billion adults that are unbanked. This is because we can’t build a physical MFI or bank in every community that needs one. Enter...
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Agricultural Mobile Finance: Understanding patterns of daily life at the BoP to leverage market solutions

Mobile phone subscriptions will outnumber the global population this year—that’s more than 7 billion subscriptions. The rapid reach of mobiles presents potential for disruptive business model innovations in many sectors at the base of the pyramid – and finance is no exception. One such innovation is agricultural mobile finance that can benefit farmers, processors, cooperatives, buyers and traders—all the participants in the field-to-fork value chain. However, connecting farmers to formal banking on their mobile phones will require multi-stakeholder alliances of telco firms, financial institutions, value chain participants and development implementers. Together, using market research and taking an end-user design approach, these partners can overcome the barriers of illiteracy, financial illiteracy and lack of trust that constrain technology initiatives at the BoP. USING MOBILE PHONES TO BRIDGE THE GAP BETWEEN FARMERS AND FORMAL BANKING SERVICES At ACDI/VOCA many of our projects connect smallholder farmers, first to one another to attain economies of scale and then, as a group, to markets. For our Cocoa Innovations Project (CIP), which is developing the Indonesian cocoa sector by aiding smallholder cocoa farmers, we crafted an input supply finance mechanism in conjunction with a commercial bank and an international cocoa buyer. The mechanism allows farmers contracted...
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Planting the Seeds of Digital Finance: Part 2 of our Digital Finance Plus series discusses why agriculture is key to building the mobile money ecosystem

Editor’s note: This is the second post in our series on Digital Finance Plus. Published in collaboration with CGAP, the series explores the ways that digital finance is being utilized to help provide basic, essential services to the BoP. Discover more in part one, part three, part four and part five of this week-long series. Think about the five sectors covered in CGAP’s Digital Finance Plus project: agriculture, utilities, water, health and education. Each of these sectors is crucially important, and each is being impacted in different ways by innovative uses of digital finance. But in most of these sectors, mobile money products are facilitating payments from, not to, BoP customers. Of the five sectors, agriculture is the only one that provides household income to a significant number of BoP families. This could give agriculture-focused payment solutions a unique role in the growth of digital finance, since their ability to facilitate income streams to low-income families provides a powerful incentive for their adoption. So why aren’t more mobile money platforms tapping this potential? I had the honor of being in Brussels in March to talk about agricultural mobile finance with an audience of European Union international development and policy makers...
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