Applied Product Innovation for Smallholder Finance
Technology surrounds us, and is increasingly powerful. From our laptops and even our phones we check the weather, find the closest bus stop, send messages and money, and manage vast amounts of information, all at speeds unimaginable even a few years ago. Its applications seem endless, but the potential roles that technology can play in the lives of smallholder farmers remain unclear. Of course the market is vast—an estimated 2.5 billion people live in smallholder families around the world—and service providers of all kinds have taken note. There is more and more interest in serving this market, and expectations are high that various applications of technology will make that happen.
But many questions remain unanswered: How are smallholders engaging with technology, in all its forms, right now? How does openness to technology and basic questions of access vary by a farmer’s age or gender, or where they live, or what they grow? What are their expectations for technology related to financial services? Where are there possible entry points to explore, and barriers related to trust, networks, or the regulatory environment to consider? At the root, how can technology be of service to smallholders and used to support to their needs and aspirations, particularly related to their financial lives?
CGAP is exploring these questions and others through its work on financial innovation for smallholder families. We’re looking more closely at the financial needs of these families, both related to and independent of their agricultural activities, and the financial services and providers currently working with them. As part of this work, CGAP is taking a closer look at the role of technology, and how it could be used to meet the various needs of smallholder families for financial services.
Looking specifically at the needs of smallholder families, CGAP is seeking partners to engage in a human-centered design process to develop products specifically tailored to the needs and objectives of this important client segment. This product innovation process will place smallholder families at the center, shaping products and services around their needs, behaviors and preferences. This product development experience will build on earlier CGAP experiences with Applied Product Innovation in Brazil, Mexico and Uganda, and involve a number of human-centered design firms.
Relevant partners in these projects could include banks, mobile network operators, retail chains, microfinance institutions, and others that deliver or are positioning themselves to offer financial services through mobile phones, POS devices, and/or other forms of technology. The ideal partners will be eager to reach underserved smallholder farming families, if they are not already, and have a track record of innovation. Partners could have a product idea that needs refining and testing or they could be starting from the very beginning, with simply a commitment to explore the sector and respond to what potential customers tell them.
The winning proposals will be selected through a competitive process that considers the commitment of the providers to bring innovative financial services to market and how best they can help us answer our key learning question: How do we design products that meet any of the wide array of financial service needs of smallholder farming families and do so in a commercially-viable way? This isn’t about technology for the sake of technology, but about how the power of its applications can be channeled in ways that support smallholder households and make a meaningful difference in their lives.