myAgro, HCD, and Supporting Smallholder Savings in Senegal
myAgro, a West African input retailer, believes that increasing farm output is the best way to move smallholder farmers out of poverty, and that even farmers living on less than $1.50 per day can save small amounts over time to invest in their farms. Over the past several years, myAgro’s mobile layaway platform has helped thousands of smallholders purchase income-boosting agricultural inputs without loans or handouts. But myAgro continues to seek out new ways to encourage farmers to save for long-term goals and invest in productivity boosting farm assets, while also exploring innovations that could provide additional value to smallholders. This continuous search for new and better ways to serve smallholders led myAgro to partner with the Consultative Group to Assist the Poor (CGAP) and the design firm Dalberg's Design Impact Group to use human-centered design to further align its product offerings in Senegal with smallholders’ behaviors, needs, and aspirations.
Operating in Mali and Senegal, myAgro provides smallholder farmers with a convenient way to pay in small increments for packages of fertilizer and seed that help them to increase their harvests and farm profits. This critical offering from myAgro is a digitally-powered layaway account, which enables farmers to plan ahead for burdensome input purchases rather than pay a large lump sum at the beginning of the planting season when household finances are tight. Customers add money to their layaway account by purchasing cards worth $1 - $25 at a network of rural vendors, scratching off a secret code, and sending the code to myAgro via SMS. Upon receipt of the SMS, myAgro’s system automatically allocates the value of the farmer’s payment to the farmer’s layaway account. Smallholders choose how much and how often to pay into their layaway account in the lead up to planting season, and once they achieve their goal, myAgro delivers their chosen input package of fertilizer, seed and technical training.
As myAgro has grown, it has become increasingly clear that trust and financial planning are the two key factors that determine whether or not a farmer will finish saving for his or her package. On average, one-third of myAgro’s farmers do not successfully complete paying for their input package before the season begins. These farmers often cite overly ambitious targets and a lack of discipline as the biggest obstacles to completing payment. Furthermore, myAgro’s internal reviews have found that while the first payment a farmer makes is important, a second payment within the first two weeks of enrollment is the most critical determinant of whether a customer will actually achieve their layaway goal. A key focus of the upcoming Human-Centered Design work will be to better understand how to encourage regular payments, while also overcoming the drop-off between farmers’ first and second payments.
Additionally, myAgro is searching for ways to help farmers to plant more of their land, more efficiently. Because precision planting by hand is labor intensive and can be a barrier to farmer adoption of improved planting techniques, myAgro developed a mechanized precision planter that micro-doses fertilizer and seed. This tool reduces the amount of labor needed to plant a large tract of land but is expensive, costing approximately $300-$400. Still, market research has revealed that a surprising 60% of farmers actually prefer using layaway to pay for the planter instead of taking a traditional microfinance loan. Therefore, another aspect of myAgro’s HCD work will explore how to tailor the layaway model to support larger purchases like the planter – perhaps by leveraging savings groups or providing ways for communities to use the myAgro layaway platform for their other needs. Improvements in marketing and messaging can help customers to make the regular payments necessary to achieve this more ambitious layaway goal.
myAgro’s innovation team also continually evaluates ways to add value to smallholder farmers as the program continues to scale. While current offerings are focused solely on agriculture, myAgro is also interested in expanding these offerings to include a variety of goals that more holistically meet the needs of smallholder households. These layaway goals could include new crop types, livestock, or non-agricultural needs such as solar lighting, school fees or maternal healthcare. As myAgro tests and refines its layaway system, there are exciting opportunities to explore how the model might develop so as to allow farmers to manage paying for multiple services or items at the same time, while also ensuring a high completion rate.
Because myAgro’s model already leverages existing behaviors to better serve farmers, human-centered design is a natural extension of the company’s current approach to developing new products and services. With greater insight from human centered design work on consumer preferences, challenges, and choices, myAgro will be able to more rapidly scale market impact and move greater numbers of farmers out of poverty.
Thank you - looks a great approach. Sounds like many farmers prefer to "save-up" rather than "save-down" (i.e. borrow) to pay for inputs, and you have developed a convenient way to assist them. Fabulous.