Question 1 (opens 20 May) How are ICT being used in operations of rural finance and micro-insurance providers?

Question 1
In what ways are financial institutions/micro insurers using ICT in day to day operations? (For example, marketing, client assessment and relation management, credit scoring, loan analysis, underwriting policies, claims.)
How has automation through use of ICT impacted business outcomes in terms loans granted, loan volumes, savings efficiency or amount generated, non-performing loan rates, number of loans per Agri credit officer, claims agent, etc.?

Saripalli suryanarayanaProfessional Engineer-Administrator-40 years experience-water,irrigation and infrastructure Projects conceptulationIndia

20.05.2013

This field in Africa cannot be filled by the local corporations alone.There has to be a policy as to how foreign investors from same business or from a different type of business can enter and participate in this sector.

There needs to be a regulation authority for both the finance-Banking and insurance companies.

2]Unless there is
[a] Enhanced productivity the farmer cannot pay for the insurance,hence initially the state has to cover some extent of insurance,and enter in to the banking operations in remote areas ,with guidelines for agriculture finance.Developed countries and lending agencies have to lend for this venture to the state corporations.
[b]The farmer crops have to be bought by the marketing group at proper prices ,so that the farmer is taught about saving and use of his surplus money for better farming insurance,and better living standards.
[c] International groups,developing countries needs to lend to the nations,agriculture farming business services people from their pool of government servents free of cost.
[d]These developing countries have to encourage their talent to go and take up farming in these African countries,like in Ethiopia,Kenya etc,where now you will find the indian community taking up horticulture work.

In essence ICT is the source for all these ,with good governence practices.
Checks and balance are vital to the civil society,and e-commerce,e-governance are the modern tools which need to be used in these communities.

Michael TaraziUnited States of America

20.05.2013

I'm really encouraged by all the emerging uses of technology to meet the financial services needs of smallholders. I'd be interested in hearing more though on the key obstacles. For example I understand in Kenya, M-PESA is still too expensive for many smallholders. Is cost the only obstacle or are there others? Any first-hand insights would be most appreciated.

Saleh GashuaAfrican Rural and Agricultural Credit Association (AFRACA)Kenya

22.05.2013

To the contrary. MPESA is the cheapest form of transaction for small holders. In fact they constitute 60% - 70% of MPESA users mostly because its cheap to use and cellphone penetration is quite high - 30.8 million subscribers out of a population of 43 million. This is also evidenced by the increase in the profits of the Cooperative Bank of Kenya whose agency banking model using MPESA caters for a majority of the small holders. Therefore to say that MPESA is expensive for small holders is a gross misrepresentation.

Michael RiggsFAOItaly

22.05.2013

Thanks for this comment. Two follow up questions:

Would you give more information about the transaction cost of MPESA versus other finanical services? (So others have an idea of the difference.)

Is it possible to attribute some of the low cost to the use of ICT (mobile phones or other tools) in the MPESA service?

Thank you.

Michael RiggsFAOItaly

20.05.2013

Hello everyone, and thank you for starting off this discussion today!

As the facilitator for this two week forum, I welcome everyone and encourage everyone to share their own ideas and experience.

If you have any questions or need assistance, you can write to me directly at [email protected]

Keep in mind that this discussion is building on the ICT in Agriculture Sourcebook, published by the World Bank. It is an excellent resource.

Please focus on the issue in question 1 when answering here. There are 4 more questions coming that will allow for the discussion of many more issues. The upcoming questions will be:

Question 2: Identify some of the critical actors/stakeholders in agricultural and rural finance or micro-insurance, and how they can use ICT to extend the positive impact of these products and services in rural areas.

Question 3: ICT is quite important in value chain finance. How can ICT play an even greater role in enabling strategic VC partnerships to work in facilitating efficiency and/or inclusiveness in agricultural finance and insurance? What are the key challenges in getting partners systems to operate seamlessly, including VC players and VC service providers, including financial institutions, insurers, warehouse managers, agri market information provider, etc.?

Question 4: In what ways other than discussed in questions 1 and 2 does ICT enable rural financial services, agricultural investment, insurance and technical support?

Question 5: What are the key regulatory challenges, both on the mobile phone and banking/insurance, in using ICT to deliver agri loan and insurance products? What does it take to overcome these challenges?

Calvin MillerFAOItaly

22.05.2013

We tend to think of ICT as mobile money, texting, etc. but it is at the heart of modern technology which has opened new doors for financial access to small holds -- farmers, micro-savers, insurance services and the like. But I also want to note three areas we sometimes overlook:a. Communication between financial institutions and their clients, between clients, and between staffb. Back-office communication, which allows for agile decision-making and monitoring, improving efficiency and timelinessc. Business efficiency, which improves the buying, selling and market competitiveness of the clients which in turn makes them better clients. A strong client is one with a strong, sustainable business.

Michael RiggsFAOItaly

22.05.2013

Hi Calvin,

Would you give us some examples of the three areas you describe above? Organizations active in these areas, ICT tools, reviews of the success, etc. would all be of interest.

Thank you.

Eija PehuUnited States of America

23.05.2013

I am on mission in Uganda and the colleagues here are very interested in good practice examples of ICT integration into provision of finanacial services in East Africa, especially Uganda. Pointing us to some of these would be much appreciated. Eija

Michael RiggsFAOItaly

27.05.2013

<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:x="urn:schemas-microsoft-com:office:excel" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40"><head><meta http-equiv=Content-Type content="text/html; charset=utf-8"><meta name=Generator content="Microsoft Word 12 (filtered medium)"><style></style></head><body lang=EN-US link=blue vlink=purple><div class=WordSection1>Hi Eija. Are you familiar with Mercy Corp’s work in Uganda? They are integrating financial services along with other information services delivered to smallholder farmers via mobile phone. It sounds like just the sort of initiative your colleague are looking for. They’ve written about it just last week here: <a href="http://www.e-agriculture.org/blog/mercy-corps%E2%80%99-agri-fin-mobile-p... <o:p></o:p><o:p> </o:p><o:p> </o:p>Wri

Michael RiggsFAOItaly

29.05.2013

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