Designing Digital Financial Services for Cambodian Smallholders

Digital solutions are changing the face of microfinance around the globe; and Cambodia is no exception. But even as Cambodian providers continue to develop innovative new digital financial products and services, tailoring them to the unique needs of smallholder households remains a significant challenge. With decades of experience working with Cambodian smallholders, Amret Microfinance Institution knows this challenge well - and that is why human-centered design may offer a fresh approach to overcoming the barriers to serving Cambodia’s smallholder families.

With 67% of Cambodians employed in agriculture - most of whom cultivate less than two hectares of land - there is no path to financial inclusion in Cambodia without smallholder households. However, because most of these smallholders live in hard-to-reach rural areas, providing them with a comprehensive set of financial services presents complications. In some other countries, digital products such as mobile money might offer solutions to such obstacles. But the Cambodian context presents distinct challenges.

While mobile networks cover much of the country, the development of mobile financial services has been limited by low levels of literacy among smallholder households. And even among those smallholders who do read and write, most have basic phones that do not support Khmer (Cambodia’s local language) characters. As a result, smallholder mobile usage is largely confined to making and receiving phone calls.

Horticulture farmer in Cambodia
Horticulture farmer in Cambodia. Photo by Liu Yifei, 2014 CGAP Photo Contest.

All of this isn’t to say that digital financial services are not possible in Cambodia – in fact, the opposite is true. Digital payments have exploded in recent years, with payment providers offering OTC and mobile-enabled money transfers, bill payments, and airtime top-ups. An increasing number of MFIs and banks are also launching third-party agent networks and mobile banking platforms.

Recognizing this trend, Amret has committed itself to leveraging emerging technologies to better serve Cambodia’s smallholder households. Smallholder farming families are Amret’s historical target and represent its largest client segment, with 98% of our clients living in rural areas. Over the years, Amret has expanded the range of products and services offered to these clients, including solidarity credit and agri-loans tailored to seasonal incomes. In early 2013, Amret received a grant from the World Bank Group’s AgriFin facility to implement its first mobile financial services project, with the aim of providing smallholders with more convenient access to an even broader array of product offerings.

Still, developing digital solutions to better serve our smallholder clients will require us to think beyond the products and services offered in Cambodia currently. Amret’s objective is to take advantage of the increased accessibility offered by digital channels in order to provide innovative new services tailored to the needs and practices of its rural clients. And even as an increasing number of players enter the digital financial services space, Amret needs to differentiate itself by providing smallholder households with comprehensive offerings that support their full range of financial and economic activities.

This is where HCD comes in. By gaining a deep understanding of clients’ lives and aspirations, we hope to identify ways in which Amret can use digital channels to deliver innovative new products and services that improve the lives of Cambodia’s smallholders. In doing so, our work will target smallholder farming families living more than 3 kilometers away from an Amret branch, and will look at opportunities related to both agricultural and non-agricultural needs.

Despite Amret’s depth of experience in this space, the MFI is entering into this work without pre-conceptions or new services. Instead, by listening to smallholders, the Amret team hopes to remain open to inspiration from the very customers it seeks to serve.

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