Meet Philomena Njoki a cheerful mother of thirteen and grandmother of many children, one of who sits on her lap while the others mill around her as we talk. Philomena, a dairy farmer in Ndumberi, Kiambu County about twenty kilometers from Nairobi, Kenya, is a member of Ndumberi Dairy Farmers Cooperative. She has a one-acre mixed farm where she keeps two dairy cows and grows coffee and maize. She lives with her sickly husband and some of her grown-up children and their children. Philomena is the pillar in this home and has to manage the farm and money to keep the family and farming going. She says she often has to choose between feeding her cows or her family. How does she cope?
Dairy is her main source of income and she gets eleven litres per day, five of which she sells to a shop across the road for cash retains one and a half a liter for her family use, and sells the rest to Ndumberi dairy cooperative.
“From Ndumberi cooperative, I get concentrates, vet treatment, and artificial insemination for my cows on credit, which is deducted from my milk proceeds” she explains. The leftover money, if available, is withdrawn from her bank account to meet family needs. The cooperative pays her at the end of the month (usually more than 30 days) through her account at the Cooperative Bank. She has an ATM card but does not know how to use it.
Money from her coffee comes in once a year and is used for major family expenses, such as medical bills or helping to pay for school for the grandchildren.
The cooperative operates a savings and credit cooperative (SACCO) where she saves USD 5 every month. Philomena is also a member of three local women groups popularly known as ‘Chamas’ where each member contributes a specified amount of money and gives to each member in turn. She uses money from the ‘chamas’ to buy household items. She also saves USD 0.75 through her church SACCO and it is from her church SACCO that she bought her first cow 30 years ago.
Philomena rarely borrows because in her own words ‘Loans are expensive and they are a burden to repay!’ She is signed up for mobile money services, M-Pesa and M-Shwari but she has used neither of these.
Down the road is Lucy, another member of Dairy Farmers Cooperative. She has two cows on her 1/8th acre. She has a brick house and two cars. Her husband is a plumber, which is a more stable source of income and they have two children in college. Lucy delivers all her milk to the dairy cooperative. She also gets services from her cooperative that are paid off from the proceeds. “Selling milk through one channel is the easiest and most convenient channel for me since it leaves me time to look after my cows,” says Lucy. This farmer is a regular user of M-Pesa services and at any one time, she has USD 100 in her M-Pesa wallet. Any money beyond that is transferred to her bank account at K-Unity, a local SACCO from which she also borrows to finance her dairy farming and other needs. She also receives her milk payment through the K-Unity account at the end of the month.
A third farmer we interviewed, Mary Njoki is a vibrant and strong woman who seems to be a very efficient manager of her family. Her husband sits quietly on a stool as she explains how her family copes financially. They have three cows and all the milk is delivered to a milk vendor who pays cash on delivery. The farmer though registered with is Ndumberi Dairy Cooperative, prefers to sell her milk elsewhere. “I don’t deliver milk to the cooperative because they pay monthly, that is too long for me,” she explains. “Besides, the milk vendor I sell to pays me a much higher price than what the cooperative would have paid me, and he pays me immediately,” she adds. Mary wishes that the cooperative paid fortnightly, then she would benefit from the credit services for the treatment of her cows which she otherwise pays for in cash. Mary is also a vegetable dealer and buys vegetables from her village and transports them for sale in Nairobi. This supplements income from the milk. She uses M-Pesa and on the day of our visit, she had just borrowed USD 40 from M-Shwari to pay medical bills and for feed. She likes the convenience and speed of M-Shwari and is a regular user. Mary is a member of three ‘chamas’ and she uses the money from her ‘chamas’ to buy household items, and pay school fees for her son who is in high school. She is also a member of a Micro Finance institution called Asha where she saves USD 6 weekly and is planning to get a loan to buy a bull.
The three women farmers described above demonstrate the need for a variety of services to meet different needs at different stages of households. For agricultural solutions to work better and improve the livelihoods of the rural poor, digital financial services need to be able to assist farmers to work in multiple value chains and to diversify their sources of livelihoods and reduce hunger, smooth incomes, and increase resilience.
Lucy Kioko, Agriculture Manager AgriFin Accelerate Program, Mercy Corps.