National Microfinance Bank (NMB) has entered into a deal with Mastercard for the digitization of the agricultural sector in Tanzania with the rollout of eKilimo, a mobile solution developed by the Mastercard Lab for Financial Inclusion.
eKilimo, which in Swahili means ‘eAgriculture’, is a digital platform that will help, introduce efficiency, security and transparency in the agriculture supply chain. The solution will make transacting faster, safer, and easier for all stakeholders including the farmer, the buyer and the agent.
(TOP: NMB MD Ineke Bussemaker exchanging partnership contracts with Mastercard President for Middle East and Africa Raghu Malhotra at a press signing ceremony held in Dar es Salaam. Looking on the left is the NMB Acting Chief Retail Banking Abdulmajid Nsekela and right is the Mastercard Division President Sub-Saharan Africa Daniel Monehin).
Powered by the digital platform developed by the Mastercard Lab, farmers are now able to conduct the entire transaction process of receiving payments and selling produce via a feature or smartphone, without having to walk hours to markets. This helps to ensure farmers benefit from the ability to capture a higher percentage of the wholesale value of their goods by providing price transparency and more direct access to buyers.
“Contributing a significant US $13.9 billion to Tanzania’s GDP (nearly 30 percent), it is critical that solutions are found to support this vital sector, ensuring sustainability and growth. Technology is having a significant impact already, and the mobile device is giving small holder farmers the power and ability to move beyond cash,” said Raghu Malhotra, President, Middle East and Africa, Mastercard.
By providing digital payment to farmers, eKilimo will leverage the existing agency banking structure to facilitate account opening for farmers and joint ideation on new product features. This is in line with the Mastercard vision of a more digitally and financially included Africa.
“Using digital technology to provide access to farmers and introducing transparency to the buying and selling process will drive efficiencies into this supply chain, positively impacting the economy. In the long run this should help famers gain access to formal financial services and solutions, enabling them to manage their funds ensuring a better more secure future for them and their families.”
The solution which was developed at the Mastercard Lab for Financial Inclusion is part of a global commitment made by company to reach 500 million people currently excluded from the financial mainstream by 2020. The East African Lab, supported by the Bill and Melinda Gates Foundation, is set to empower 100 million people through its focused approach of developing market and sector relevant solutions underpinned by meaningful insights and local collaboration.
The partnership between NMB and Mastercard will see the solution enter a pilot phase in select locations in Tanzania from March 2017. Following the introduction of the same solution in Kenya under the name of 2KUZE, key insights were gathered and will be used to ensure the Tanzanian pilot is a success. This cross pollination of knowledge driven by the Mastercard Lab ensures future rollouts are done so efficiently.
The pilot will begin with the onboarding of NMB customers that source directly from smallholders. Field agents of the customers will use the eKilimo smartphone app to perform the purchase, including weighing the produce on a Bluetooth-enabled scale and paying the farmer digitally. The farmer will receive information and their payment from eKilimo, and will be able to leverage their transaction history to access credit from NMB.
“We are committed to growing Tanzania’s agriculture sector, and working with partners such as Mastercard to introduce technology that can change lives. Our experience in the sector gives us a unique point of view, combined with insights from Mastercard following the launch of the solution in Kenya under the name 2KUZE. It makes for a powerful collaboration, one that will benefit smallholder famers, buyers and agents – and the broader economy,” said Ineke Bussemaker, MD, NMB.