Digital financial services are key for farmers

A high-level symposium tackles bottlenecks faced by farmers seeking access to financial systems

03/12/2020 - 

Recently, FAO, the Chinese Academy of Financial Inclusion (CAFI) and the Improving Capacity Building in Rural Finance (CABFIN) jointly held the virtual symposium Development of Inclusive Rural Digital Finance Services: China’s Experience and International Organization’s Practices. More than 30 speakers from China, Uganda, Kenya and international organizations participated, focusing on three themes: policy support environment; financial regulatory measures; and innovative case studies.

Digital financial services (DFS) have become a key driving factor for developing countries and emerging market to enhance financial inclusion. In rural areas, DFS reaches youth, women, and marginalised groups more widely and effectively, helping farmers to reduce poverty and increase income, and speeding up inclusive rural transformation.

During the opening ceremony, Máximo Torero (Chief Economist) underscored the importance of rural DFS in promoting inclusive rural development and increasing farmers’ income. He stated, “one of the major problems for farmers to be able to access the finance system is that the financial system does not understand the actual situation of farmers. Digital technology can precisely play a vital role so that we can finally beat the major constraints that farmers are facing in liquidity and lack of access to financial systems.”

BEI Duoguang, co-chairperson of the CAFI, stated that “E-commerce Village” is a typical rural E-commerce development model in China, and rural DFS evolved from there and has successfully been developed into the rural commodity supply chain finance. This affirmation was echoed by the spokesperson from the Ministry of Agriculture and Rural Affairs (MARA) of China, who recommended that the Chinese government, enterprises and scientific research institutions continue exchanges and cooperation in rural DFS with the international community to ensure that DFS becomes the effective path to rural poverty alleviation and sustainable development.

The SSTC mechanism and the focus of its work was explained by YE Anping (PST), who emphasised that digital innovation can improve financial services and speed up the rural development and transformation process. He also pointed out that there are potential opportunities under the SSTC framework to cooperate in capacity building, knowledge products development, as well as online platforms and on-site projects in the area of rural DFS. This will help rural production and operation organizations in different countries to improve their digital capacity, access to finance, and strengthen digital inclusiveness.

During the special event, the Chinese version of the revamped webpage of Rural Finance and Investment Learning Center (RFILC) managed by the Organization was officially launched. It represents the expansion of the CABFIN partnership network outreach to China, which will further promote knowledge sharing among China, international institutions and countries in rural finance and investment.

At the closing session, ZHANG ZhongJun (FAOCN) reiterated the consensus that the symposium was held at the perfect moment as accelerating the development of rural DFS is essential to fill the knowledge gaps of the marginalised rural community so that they can enjoy adequate, faster and more effective financial services, thereby promoting inclusive rural transformation to achieve the sustainable development goals eventually.

The Organization attaches great importance to digital innovation and actively promotes the development of digital agriculture and digital services for rural farmers. FAO will continue strengthening its work in rural DFS and encourage decision-makers, financial service practitioners and academics to work together to develop customer-friendly rural DFS.

This high-level symposium was led by the Organization’s Inclusive Rural Transformation and Gender Equality Division with support from FAOCN.

View the presentations and recording here.