May 21, 2017

Financial Inclusion & Business Linkages

Within the region, Infotrade is building a network of sustainable business alliances with a number of service providers to provide aggregated services to traceable, informed, and organized farmer production groups.

Financial Inclusion

Infotrade Maali Card for farmer/trader card programme is a fully supported, local platform enabled by Interswitch. It is integrated with farmer identification profiles that are collected on the infotrade premier.  As a pre-paid debit card, it allows farmers/traders and members to store, save, receive, send and spend money electronically, with consequent savings in cost and time along with considerable other benefits associated with the members to infotrade. It eliminates the need of  cash box or Pots in the villages and is is  changing model of  group lending and SACCO cash management.

Rural Financial Inclusion:  Using a pre-paid debit card called Maalicard, we offer farmers and traders a means of transaction with cashless options yet reducing operation risk, increasing profitability, cash management, savings and ease of money transfer for good and services.

Payment Devices of Farmers & traders:  Each farmer subscribed on the Infotrade Markets receives a free E-Wallet and pays for pre-paid debit and should have registered mobile money enabled number. The shift has been driven by the need to improve cash management, reduce risk in movement of cash, improving saving culture and ease to alternative means of payment.

Farmers Access to the Money on the Cards:   Farmers and traders can access cash from their mobile phones, Registered Interswitch Cash points; ATM using Interswitch network or from the agent offtaker stores.

Card Power – The Maalicard is powered by the cash from commodity offtakers who deposit physical cash on escrow account ( supervised by a Class A commercial bank.  E-Cash is loaded on the buying Agent’s Card at the store to all them purchase produce from the farmers in the villages, bulking stores and agent pick up points.

How it works:

Infotrade Markets introduces three major components as tools for information, marketing and trade. These are:

  1. Creation of ecosystem of commodity marketing through off takers (Buying and Selling)
  2. Enables groups (SACCOs, Saving clubs) to reduce risks associated with cash
  3. Opportunity for credit institutions to use the card as channel for distribution of loans or collection /recovery

The buying agents to make payments to the sellers using multiple channels like, online wallet, Mobile Cash and Debit Card three channels of payment. It offers an opportunity to integrate profile based database with traceable KYC, linking production data, trade data and market information to completed purchases with organized ecosystem.

Business linkages to Service providers

Connecting services to farmers and traders; the farmer is a center of the service development based on the information and data insights, FIT has built models to support interventions from private sector service providers.  Working with traceable, informed and organized farmers, increases the market penetration capabilities for services providers like banks, insurance firms, input providers and tractor services e.t.c . Below is the network of services we provide to the farmers within the database based on the willingness of the private providers to tailor their product to the groups.

 

Tailored Business Alliances with Service providers

FIT works with private services providers on a commercial arrangement support groups of farmers. .  FIT negotiates favorable terms for grouped service delivery from insurance firms, input providers, banks and tractor services in each country. We also sign strategic alliances with other providers, development partners and NGOs to facilitated development intervention with farmers in agritrade

Agricultural Insurance

Ugandan agricultural sector is purely based on the weather, it is true that the country is blessed with two seasons of rainfall but the seasons are sometimes unpredictable leading to increasing risks in farming as business.   It is also true that rainfall may be good but too much rainfall or sunshine may lead to poor harvest or high losses. The changing weather patterns coupled with the effects of global warming as a result of climate change imply that being in farming as a business, one has to plan for risk associated with business.

FIT working with  Uganda Insurance Association  are offering a subsidised service for insurance for farmers on the database to cover a number of risks.

Multi-Peril Crop Insurance
What can be issued? Is the physical loss or damage to growing crops directly caused by:

  • Drought,
  • Uncontrollable pests and diseases,
  • Hailstones damage,
  • Flooding of the crop field,
  • Malicious damage,
  • Earthquakes,
  • Riots and strikers,
  • Explosions or Windstorms.

The insurance can be extended to the produce in transit from farmer to registered store or buyer.

How it works?

Insurance will pay for the yield shortfall below the guaranteed level resulting from the physical loss of crop or damage to crop directly caused by the listed perils in the box above.  The Sum insured for any crop is based on production costs or pre-agreed nominated value of harvested crop.

What is needed from the farmer?

  • Each farmer should be a registered user of Infotrade Premier .i.e. with a FIN trackable ID
  • Should have one or two crops
  • Should be ready to insure at least one Arce
  • Crop should cover a minimum of one acre
  • Completed profile form and run production estimates
  • Should be beyond to group  of farmers in same (weather system) will to insurer a minimum of 10 acres combined.

Input Providers

Plant Inputs are key constraints to the  farmers at every start of a season. Knowing which input is right for which crop type or soil type? Using historical data, FIT provides insights on the past production trends and statistics to guide supply interventions from input providers. The input providers need to have business partnership arrangement with FIT for business growth, farmer support and revenue generation.

Credits /Loan Providers

A number of farmers are not banked yet have a need for loan and credit to cover financial short fall at beginning of the season for inputs, during harvest and moving of goods to the markets.  FIT is ready to work with banks and financial institutions to tailor loans for farmers in selected groups, and introduce farmers to banks for physical accounts.   Working with FIT Insights, Bankers are able to use data at their fingertips to gain deeper understanding of the business of farmers and their historical performance.  Bankers are able to trace , track and identify new clientele also access organized and informed farmers.