Advancing Financial Security and Wellbeing in Africa through Digital Inclusion

The COVID-19 pandemic has thrown the world into disarray, but in Africa life goes on: farmers cultivate, traders sell, people seek capital to create jobs and improve livelihoods, and an increased need access to health care underlies all of this. But on a continent where inequality is widespread, where more than half the population is still excluded from the formal economy and where one in three people lack formal proof of identity, the task of moving from survive” to “thrive” is an even greater challenge. . This is especially critical at a time when a global food crisis is brewing.

Still, a silver lining does exist. In villages, farms, towns, clinics and communities across Africa, a digital evolution is underway, one that began even before the pandemic. While there are significant gaps in infrastructure and internet access, mobile phones are proliferating, making the continent fertile ground for the adoption of innovative solutions that create new value chains and wider access to tools. financial.

Take agriculture for example. In Africa, farmers face significant challenges, including limited access to markets, access to working capital to obtain quality seeds and pesticides, and access to relevant financial tools to pay and be paid. effectively. Millions of farmers across Africa work incredibly hard to earn a living. For entire communities to truly thrive, the people who work the land need a model of sustainable agriculture that helps farmers move from subsistence to more commercial production, and does so in a way that is fair and transparent to all parties.

“In sub-Saharan Africa, agriculture is perhaps the most vital source of income, with more than 60% of the population being smallholder farmers. Deeper still, economic growth from agriculture is estimated to be two to four times more effective in reducing extreme poverty than any other sector,” said Michael Froman, Mastercard Vice President and President of Strategic Growth. . “With increased investment, digitalization and support, many countries have the potential to increase food production, reduce costly imports, promote rural livelihoods and reduce poverty. And Farm Pass can be an essential part of that equation.

Farm Pass is a digital platform that Mastercard launched in 2015, bringing together various players in the agricultural sector from the supply and demand side in a single agricultural market. Smallholder farmers can access a stable market with transparent prices, enabling them to demand higher prices, and quality inputs and agricultural advisory services to increase crop productivity. It transforms agricultural ecosystems and connects farmers to the formal financial system, also providing them with a digital record that could support future loan applications. During the pandemic, farmers were able to sell their produce at 25-50% higher prices by connecting directly with Farm Pass shoppers, even though local markets were closed.

During his recent visit to Uganda’s Masaka district, where Robusta is the main variety of coffee grown, Froman saw the positive impact of Farm Pass firsthand in his interaction with farmers from a local cooperative, the Kibinge Farmer Producer Organization, which streamlines production efforts. In Kibinge, more than 3,400 farmers have signed up for the Farm Pass. Across Africa, Farm Pass has already helped around 659,000 smallholder farmers access better prices.

Kibonde Christine Nabukeera, one of Kibinge’s coffee farmers, says, “Before, I used to spend money on transport, but now I can sell my products from home and wait for an update on my phone. In addition, all e-Farm input prices are easily accessible, including price trends.

“Before launching Farm Pass, these farmers struggled with a lengthy sales process, payment delays, and manual navigation of complicated paper trails, in addition to the risk of losing paper documents,” Froman continues. “But now these farmers are more optimistic about the potential of their farms. This shows the immense impact that digital inclusion can have in driving commerce and creating a path to greater financial security. And the fact that it can be used both offline and online is extremely valuable for smallholder farmers who often operate in environments with low connectivity.

Michael Froman (center), Vice President and President of Strategic Growth at Mastercard, visits Uganda’s Masaka District, to learn how Farm Pass is helping smallholder farmers from a local cooperative, the Kibinge Farmer Producer Organization, to access better prices.

Soon more farmers will discover its benefits thanks to Mastercard’s partnership with Ecobank Group, which will see Farm Pass rolled out in 33 countries across Sub-Saharan Africa, expanding the award-winning digital solution’s footprint beyond Uganda, Kenya and Tanzania. where he is currently live. And as more and more farmers move from subsistence to commercial farming, this will drive agricultural growth, increase competitiveness and improve food security in Africa – which has also suffered the ripple effects. disrupted supply chains following the Ukraine crisis.

Farm Pass can also play a role in expanding access to capital, given that only 3% of the agricultural sector currently receives credit from banks. Access to working capital usually requires two things: proof of transaction and proof of identity. By integrating their operations with a payment system, Farm Pass enables smallholder farmers to create a digital transaction record that can facilitate the extension of formal credit or other financial services from banks and other institutions.

Lack of formal identification is a bigger problem, affecting access to services for many marginalized citizens. That’s why Mastercard created Community Pass, a shared, interoperable digital platform that connects people in the most remote and underserved communities with service providers, including banks, governments and healthcare providers. Community Pass establishes a functional identity by creating a unique digital identifier, enabling access to credit and services that would otherwise be inaccessible. Farm Pass is the agricultural solution installed on the Community Pass platform.

This is useful not only for farmers using Farm Pass, but also for medical professionals keeping communities safe in the wake of the biggest pandemic in a century. The potential of the Wellness Pass, another component of the Community Pass, explains why Froman’s next stop was in Addis Ababa, formalizing a new partnership between Mastercard, Gavi, JSI and Ethiopia’s Ministry of Health.

Wellness Pass addresses issues created by fragmented and manual healthcare systems, including lack of interoperability, reliance on paper-based medical records, and limited ability to verify care plans, which impede access to data for clinics, governments and patients. The solution makes it easy to digitize health and immunization records and makes them portable and available offline. It also uses biometric verification to maintain patient privacy and enable individuals to participate equally in society – in this case, to receive much-needed healthcare services and an accurate record of their medical history. For Ethiopia, this will strengthen the country’s public health response through secure tracking of Covid-19 vaccination and offline portability of health records.

“In the wake of the pandemic, we quickly reconfigured the Wellness Pass tool with a focus on childhood vaccinations to track Covid-19 vaccinations so companies could more easily cope with managing the virus,” says Froman. “Our hope is that Wellness Pass will reach one million Ethiopians over the next 15 months, improving the accessibility, affordability and quality of primary healthcare for residents. This is in line with the Digital Ethiopia 2025 Strategy.”

Wider adoption of technology drives innovation. But you can’t just pull a product off the shelf at home and assume it will work anywhere. It is the way in which global expertise and know-how blend with a deep understanding of local communities and needs that has the potential to produce innovations with the greatest impact. This is how Mastercard can deliver on its commitment to connect one billion people, 50 million small and micro businesses, and 25 million women-led businesses to the digital economy by 2025.

“By connecting people and businesses to the digital economy with the help of our partners, Mastercard is working to improve the financial security and well-being of communities. Driving sustainable and inclusive growth is at the heart of our corporate identity and our commitment to “doing well by doing good”.

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