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 …

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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 unable 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, which bundles financial services and agriculture information on a mobile platform.

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Bosch Sets Up Internet of Things Company

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Bosch has set up a new company, Bosch Connected Devices and Solutions, for the internet of things and services. The company will supply compact electronic products and software expertise designed to make devices and objects intelligent and web-enabled across a broad range of applications. It will initially focus on sensor-based applications for smart homes as […]

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Is Minimum Wage Worth It for a Married Couple?

Lacey writes in:“My husband makes about $45K per year working for the state. I make just a hair above minimum wage – $8 per hour – working in the kitchen at a restaurant. I don’t mind the work but I have been wondering whether it makes sense for me to be doing this. After taxes I end up bringing home about $220 a week and I think I could help us out more by not working and doing stuff to save money at home. For example, we eat out a lot because we’re both worn out after work and we have to keep two cars so we can both get to work and back. If I wasn’t working, we could stop eating out and we …

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Lacey writes in:

“My husband makes about $45K per year working for the state. I make just a hair above minimum wage – $8 per hour – working in the kitchen at a restaurant. I don’t mind the work but I have been wondering whether it makes sense for me to be doing this. After taxes I end up bringing home about $220 a week and I think I could help us out more by not working and doing stuff to save money at home. For example, we eat out a lot because we’re both worn out after work and we have to keep two cars so we can both get to work and back. If I wasn’t working, we could stop eating out and we could get rid of a car and also get way more efficient with our groceries and other things. Plus we are thinking about having a child and child care would just eat up everything I make. Does it make sense for me to keep working?“

It is really hard to say which approach would make more financial sense for you without substantially more information than this, because there are a lot of factors involved.

The biggest factor of all is your work ethic. It might seem obvious that you would spend your days doing things that reduce spending at home, but doing that day in and day out requires significant work ethic. Would you really spend all of your day preparing meals and doing other economical things? Or would it be tempting to spend the afternoon watching TV or reading a book? This change only financially makes sense if you’re saving minimum wage for each hour you’re at home.

I work from home. I know the temptation to do something besides focus on the task at hand, given that there are many temptations within just a few steps of my work station. It takes willpower to consistently make the choice to be productive at home and some people simply can’t do it as effectively as they need to.

It is absolutely vital that you keep yourself busy if you choose to stay at home and focus on improving your family’s financial situation that way. I find that setting a to-do list each day and striving to complete it (as well as enjoying the sense of accomplishment that comes from finishing it) goes a long way toward making it all work for me.

Transportation savings can be a big boost as well, but it requires some difficult choices. You’re eliminating all of the costs associated with one of the cars just by making this move – assuming, of course, that you’re willing to switch to a one-car household. This means that you’d either be walking or biking or taking public transportation to the grocery store or you’d be waiting for your husband to be at home so you could buy the groceries (either together or by yourself). You’d also be stuck at home except for those alternate modes of transportation. You have to be willing to fully accept that. If you’re not, you’re immediately undoing one of the biggest sources of savings in making this move.

Children make this decision easier. The arrival of a child inserts child care costs into this equation. Quality child care often adds up to something approaching minimum wage over the course of a week, undoing the benefits of a minimum wage job. If you’re paying for a car as well, it’s very likely that the cost of child care plus the cost of the car will exceed the income from minimum wage work alone. If children are in your near-term future, staying at home becomes a brighter choice.

There will be an impact on other areas of your finances, too. You’ll likely see a small increase in home energy use, as you’ll want to keep the temperature at a reasonable level while you’re at home alone during the day, as well as lighting and other devices. However, your frugality won’t merely affect your food expenses. You can find projects that can cut down on your energy costs, entertainment costs (using the library, for instance), clothing costs, and many other areas.

So, what’s in favor of staying at work? Do you have opportunities for greater income on your career path? Is this a job that can lead to more income, either at your current workplace or at another one? Do you have genuine plans or hopes of increasing your income to a significant degree?

If you can’t answer those questions positively, then it means that a job or career switch is necessary in order to drastically improve your family’s financial situation.

There’s also the question of your marital situation. Is your spouse open to this type of change? Will it cause resentment? Will your husband expect to take a smaller role in household chores if thsi change occurs? You need to talk about these things openly before you even consider making this kind of change.

Although staying at home isn’t likely to create that giant shift in finances you’re looking for, it can certainly compare to a minimum wage job. However, to make it worthwhile, you have to approach it with serious and diligence. If you let it merely be a “break” from work, it will end up being a net loss for your family.

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Somebody explain travel to me?

via Early Retirement Extreme:

I have visited 14 different countries out of the 30 or so developed countries in the world. From my superficial touristic view, I have noted that in all these countries, people earn money at day jobs, spend it on stuff, and generally lead predictable lives. The difference between countries is so much smaller than the difference between individuals. From this I have concluded that travel is not worth it, at least when it comes to going to other developed countries.

I have lived in three different countries, all some of the richest countries in the world. This has allowed me to gain a certain outside perspective on specific cultures, at least the wealthy ones, and traditions that can not be gained from tourism. Cultures ARE slightly different. Some are reserved. Some are civilized. Some are moral. Some are friendly. Some are lazy. Some are hamfisted. Some are hardworking. Just like people.

However, on the whole, national cultures are far more similar than people. If you are a carpenter, you will find you have more in common with other carpenters regardless of their nationality than you do with their neighbor. There, I just saved you a lot of travel time — however, perhaps this has to be experienced to be fully realized. I still run into people who should be smart enough to realize that their nation is not the best because its people are somehow chosen.

If you want to learn something about people, I suggest you talk to your neighbor rather than someone from another country.

Perhaps my perspective is clouded by being concentrated in developed countries. However, this is where most tourism go anywhere, so why are people going?

I know people that buy the tour guides and plan out which landmarks to see. I note that most locals never go to those landmarks. This suggests to me that the landmarks are irrelevant to the culture despite being promoted as being the essential part of the culture. Why do people go to see the views if they don’t care about the views where they live?

Sometimes it’s about the shopping, but seriously. Global trade means that you can now buy the same limited number of goods all over the world. Why go to Paris, when you can buy the same things down at the corner store. Similarly, sometimes, it’s about the food. But really, I don’t need to go to Greece to eat at a Greek restaurant. Yes, maybe it’s not the same, but it’s pretty damn close.

Sometimes people travel to get away from it all? My question then is, what are you running away from? And why are you running? I have never felt a need to get away from my normal life that could be cured by a one week getaway.

It used to be that travel meant something. Like an expedition you would work to go somewhere. Nowadays, you just hop into an airplane and 12 hours you are in another country on the other side of the world that is almost identical to your own. I suspect this is just “consumption of places” similar to consuming food or things. Is modern tourism just yet another consumer experience?

Have you ever considered traveling slowly? Moving from city to city until you get to the destination? I think sailing is an interesting way to travel slowly. I submit that you do not really know a place unless you have worked a job there, opened a bank account, and lived as a native rather than just briefly passed through while taking pictures. Living abroad makes for more personal growth than flying around in a tincan as a tourist. If you have some useful skills, you can even travel for free and get paid for it. (Until I quit my career, I have never paid for a plane ticket with my own money.)

That’s how I see it; I realize that I might be missing a few genes, so please enlighten me why travel is so popular?

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