Question 5 (opens 28 May) What are the regulatory challenges faced in ICT and rural financial services?

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?

juliet KyokundaMICROENSUREUganda

30.05.2013

Key challenges- do systems adequately explain products to customers? How can customers complain/ raise queries? Do customers understand product? Is the cost of ICT systems being transferred to customers and making products more expensive?

Solution- ICT systems , which enhance customer understanding of products, referral to complaints team, speedy claims payouts, recovering costs via subsidies, from other stakeholders and recovering other expenses over time, depending on all policies, which would be serviced by the ICT systems.

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

30.05.2013

When Royal society of civil engineers was formed in 1820,it was aganist the Milatary engineers,who were confined in their duties to military work.

In 300 years,we have established so many engineering institutions,and this civil engineering was divided to mechanical,and electrical engineering etc.

Today we may have around 50 branches of engineering applied to various fields.

Differential equations,Tylors series,laplace equations made a logic for Engineering.

Lets us use the technologies,and make corrections as needed,based on experiences.

Michael TaraziUnited States of America

30.05.2013

In response to the quetion from Michael Riggs, there are an increasing number of countries where regulators are removing obstacles to, or perhaps better phrased "enabling", nonbank e-money issuers. Nonbank issuers are permitted in many East African and East Asian countries and we are seeing it about to launch in areas where tradionally it has not been allowed. In South America, I understand Brazil and Peru are about to permit nonbank issuers (or may have done so already), and in the Arab world Jordan has done so (and may be followed by Morocco). There are still some highly populated countries with large rural and financially excluded populations where nonbank are still not permitted to issue e-money directly: Nigeria, India and Pakistan. Pakistan has quite a thriving branchless banking sector even though only banks (including microfinance banks) are permitted to offer the service (though it must be said that in the case of one microfiannce bank offering mobile financil services, a controlling interset in it was purchased by an MNO - one way MNOs can enter this space if they can't be licensed directly.)

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

31.05.2013

The field like lending for motor vehicles,lending to agriculture tools and plants,lending for crop seeds pesticides,lending for micro finance,that is how each category of finance model is approved under non banking category.

This again is under non banking finacial institutions controlled by the particular country central bank.

Things are audited and verified by the central bank,as per the companies laws available in the particular country.

It is true that none of the coutries want a 100% foreign controlled bank,where they do not have any control on the structure of taxation and other policies.

Even the companies need to have a local partner and local address for operations in the country,but for the tax heaven countries.

Antoine KantizaPromotion de l'Education à Distance/Promotion of Education and Learning in Distance, PLEAD in short Burundi

31.05.2013

The financial inclusion in rural area is done nowadays through a nonbanking system driven initially by the Mobile Network Operators in transferring electronic money and payment facilities such as Ucom or Econet in Burundi, however, the credit savings and insurances are the basis of economy growth even in the rural area where farmers are established because rural farmers have a great need of loans not only for their farming inputs but also to restore their houses; to buy some foods mostly in the scarcity season, clothes, school kits for their kids and so on, nevertheless, commercial banks are not in speed for delivering loans to smallholders living sparsely in rural area, although some banks are more and more interested by the use of electronic money like the Commercial Bank of Burundi which launched on May 24th, 2013 Mcash, a financial product reliable to Mobicash international , prior, the Commercial Bank of Burundi got a new banking licence for electronic money from the Central Bank of Burundi but it is still working like MNO involved in transfer and payment facilities and has not yet delivered online credit savings nor insurances in rural area. Mcash should reach smallholders of remote area of Burundi in the upcoming days throughout the network of the Commercial Bank's stakeholders handling the biometric ATM patented RFID and it is projected that this kind of biometric ATM will be owned at least by one person living on each hill of Burundi.
By the way, credits and insurance have a positive and a negative value for the global economy, the positive value leads to the growth of economy and the negative value leads to the failure of economy, the two side must be balanced for avoiding the collapse of economy in inflation or in depression where the goods belonging to smallholders could drop for a long period.
I think that there are many difficulties of granting loans to the farmers of remote area even with electronic money as there is a lack of insurance companies for supporting smallholders seeking bank loans added that the online loans is a new financial product without a central checking point of electronic money flow in order to protect both the barrowers and the lenders. Indeed, I agree with the economic theory which asserts that loan lead to a kind of monetary creation, so the monetary mass created by the online loans delivered to the farmers through their handsets must be controlled by the Central bank which regulates normally the flow of money on the national level as well as on the international level.
I think that the Mobile Network Operators have to be self-regulated in their daily activities of credits saving or transferring electronic money to of from theirs customers; on the second step, an independent institution should monitor the electronic money transfer done by all nonbanks and banks operators and in the third step, the Central Bank has to be aware regularly of the state of electronic credit in the economy.
Besides, the mobile phones which are expected to play the role of cash-in and cash-out, increase the threat for people travelling and living near their handsets not only due of the new hackers but also from the danger on human health caused by the Wi-Fi waves as it has been proved recently, http://fr.news.yahoo.com/wifi-dangerosit%C3%A9-ondes-prouv%C3%A9e-%C3%A9...
Also Governments from worldwide have the responsibility to take care of the safety of human or animal health and elsewhere the green agriculture which may be damaged by the new ICT devices, prior the dissemination of those electronic products in the clean rural communities because the smallholders have no means for checking those ICT devices but also should think that their mobile phones cause a little problem compared to the feed of their basic needs allowed by the ICT applications.

Prof Antoine KANTIZA, Master Uticef,-

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

01.06.2013

With due Regards,i was making the point in my way about what Prof.Kantiza,has stated.

There are ways to over come these with the use of technology.But remeber that the system hackers and code brakers,and non-eithical operation people are also living among us and they could be part of society if not our brothers and sisters.

Hence proper use of forensic sciences in each field is vital.That is why i said multiple servers,and little scrutiny on system than direct payment of money on mobile for all practicle purposes,except for seedilings and for pesticides,and such operations only.

Great discussion Mr.Michael Riggs,Ms.Julie and all friends

Antoine KantizaPromotion de l'Education à Distance/Promotion of Education and Learning in Distance, PLEAD in short Burundi

01.06.2013

I agree with Saripelli in one hand related to the point of anticipating solutions and in other hand I don’t agree on the point of being fatalist when problems occur, the little income of smallholders have to be safeguarded in any cases of electronic money breaking as the nonbanks and banks operators are answerable of the safety and fairness of electronic money operations.

I think that nonbanks and banks involved in electronic money transactions have to find solutions to the plausible problems before they happen as it is well known that smallholders living in rural area are living mostly in illiteracy and believe that anything is safe in the use of new technologies.

In fact, the rural farmers have to be protected in case the system of direct transferring electronic money is damaged by hackers or other code breakers.

The nonbanks or banks operators in electronic money haven’t to be fatalists saying that wrongdoers are among our society when technical problems or non-ethical operations occur in electronic money transactions rather, they have to insure the electronic money accounts in the favor of smallholders who expect to enhance their farming activities through mobile money payment.

Prof Antoine KANTIZA, Master Uticef,-

Michael RiggsFAOItaly

03.06.2013

<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: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>Thank you! We have enjoyed your participation and hope you will continue to discuss and share with the e-Agriculture Community on future topics. <o:p></o:p><o:p> </o:p>We will keep this forum open for posts for a few more days. Then it will be archived, and a summary report will be prepared. The summary “<a href="http://www.e-agriculture.org/policy-briefs-archive">policy brief</a>” should be available in July.<o:p></o:p><o:p> </o:p>Regards to all,<o:p></o:p>Michael <o:p></o:p><o:p> </o:p><o:p> </o:p><div style='border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0cm 0cm 0cm'>From