Isaac is a sunflower farmer in Uganda who has – miraculously – owned the same Nokia feature phone for nearly 10 years. A friend taught him the basics of mobile money several years ago, and today he uses his phone to receive money transfers from a relative every couple of weeks. He’s comfortable receiving payments but confesses that he would like someone to teach him how to send money without help. “I want to be taught how to press the numbers and send money myself,” he says.
Over the past five years, CGAP has led a number of customer segmentation and research efforts to highlight demand-side considerations for financial services among smallholders, such as Issac’s request to learn more about using mobile money. One thing we’ve found is that digital financial services (DFS) present many of the world’s 500 million smallholders with a steep learning curve, and to advance financial inclusion in rural areas, it is critical to tailor financial education to smallholders’ literacy levels.
In Uganda, CGAP collaborated with the UNCDF Mobile Money for the Poor (MM4P) program to digitize payments among smallholder farmers across five value chains: tea, coffee, dairy, seed oil and maize. To support this digitization, GRID Impact and CGAP used a human-centered design process to develop a financial education and communication content and dissemination strategy designed to drive the adoption and use of mobile payments among low-digitally-literate end users in the seed oil value chain.
The final intervention was a self-directed, two-way messaging platform that provided seed oil farmers contextualized learning content to support their adoption and use of mobile money, along with agricultural information.
A self-directed, two-way SMS messaging platform is an SMS-based chatbox tool that interacts with users and sends SMS messages based on what the user has queried. It allows a DFS provider or agribusiness to push content options to a customer while enabling the customer to choose the content he or she wants to view. The customer simply replies to the SMS message to select and view a content option. There are many variations, but the basic tenet is that providers and customers can interact and “chat” by way of predetermined content flows. This type of solution can help providers learn what their customers need while giving customers an easy way to view only information relevant to them. It also presents providers with a low-cost way to deepen customer relationships and push out information to a large group of customers in a relatively efficient manner.
Earlier CGAP pilots in Tanzania, Paraguay and the Philippines demonstrated that these solutions can significantly increase mobile money use. In Paraguay, the number of mobile wallet transactions increased 21 percent for those who participated in SMS conversations. In the Philippines, they increased 7 percent. In Tanzania, the farmers who engaged with the SMS-based chatbot tool saved at rates more than five times those of farmers who did not access the learning platform.
Interactive, two-way messaging platforms are a new innovation in smallholder agriculture. This experience generated eight important insights on message content and delivery that can help inform others.
- Introduce farmers to SMS in person through a trusted source. The sunflower farmers we worked with had limited financial literacy and experience with technology. As a result, they were often confused about how to use the self-directed messaging platform. They needed a high-touch introduction to digitalized payments and self-directed messaging systems. In 2016, a similar experiment with smallholder farmers in Tanzania first introduced the messaging service during an in-person, community training meeting.
- Use language in the same way that the target population understands. Farmers in the Uganda experiment, for example, differentiate between "storing" (keeping funds in an account for routine consumption) and "saving" (keeping funds in an account with the intention of deferring use for a specific cost or emergency event).
- Offer farmers a choice between interactive voice response and written messages, and in appropriate languages for the target population. In the Uganda experiment, preferences varied based on literacy levels and locations, and there was no clear preference for either format or language.
- Clearly introduce and regularly reinforce clear instructions for the messaging platform. Demonstrate how to use the platform in the customer onboarding process. Ideally, new users should have the opportunity to test the platform in the presence of a trainer and to ask questions. This helps to build trust in the platform.
- Keep messages short, focused and relevant. The farmers who participated in the pilot were most interested in receiving basic information about how to use mobile money and information about farming, such as seed and grain prices. They also engaged more frequently with concise messages. When users were required to toggle through several messages, it tested their patience and digital literacy. The relevance of content was also important.
- Send messages from a trustworthy account ID, not a generic shortcode. Farmers in the Uganda experiment expressed concern about fraud, probably due to the amount of spam messages sent on mobile phones. Finding ways to cut through the noise of existing spam SMS is critical and connects to the importance of building customer trust in the platform and its communications.
- Offer different learning paths for basic and advanced users. While DFS beginners may be interested in the basics of mobile money, it is best to include learning paths for an array of users. In the Uganda pilot, options such as “Paying school fees through mobile money” and “Harvest payments from the off-taker through mobile money” appealed more to the smaller numbers of more advanced users.
- Ensure that the platform allows users to save and return to it. Users may prefer not to go through all messages at once, and a self-paced learning experience will allow users to engage when it is most convenient and relevant for them. Further, returning to save messages will allow them to show the messages to other users and to ask them questions.
Technology has incredible potential to support the needs and behaviors of historically under-represented users, and in the case of sunflower farmers in Uganda, it holds potential to solidify strong connections between smallholders and their markets. But for technology to be successful in driving uptake and use of services like mobile money, the platforms must be designed to fit the needs, aspirations, preferences, behaviors and context of the end users. Smallholder farmers in rural contexts have unique needs and experiences that should influence how content and channels are designed and leveraged, and their voice is a crucial input in the process.
This is an awesome innovation, that will dramatically upscale acceptance of digital means of transaction processing of payments and acceptance amongst players in the mostly informal sector, where we currently have a huge flow of financial exchange which are not captured in computing nations GDP's especially those of developing countries.
This will also afford the target users better education in managing and applying their finances and in planning.