Making Digital Financial Solutions Relevant and Accessible for Zambian Smallholder Farmers

May 15, 2020 | All, Data & Tech Acceleration, Digital Financial Services, Distribution Channel Logistics, Farmer Capability & Smart Farming, Market Access, Women & Youth

In 2015, Mercy Corps launched the AgriFin Accelerate (AFA) Programme; a six-year, $24 million project funded by the Mastercard Foundation. AFA had the goal of reaching one million farmers with digital financial services across Kenya, Tanzania and Zambia, whose specific goal was150,000 smallholder farmers (SHF). Between 2015 and 2019, AFA worked through a network of core partners, value added service providers and various farmer organisations in Zambia to reach farmers with financial services, information and market linkages.  

Download the Complete Case Study.


In order to better understand the Zambian market and develop products and services suitable for the Zambian market, AFA conducted a country-level ecosystem study, which provided the core framework for decision-making, including the selection of value chains, partners and key strategic inflection points that would have the greatest impact on smallholder farmers. The study further revealed that digital technology could be a powerful tool in reaching smallholder farmers with financial services, information and market linkages.


The average Zambian farmer lives on 3-5 hectares of land, a significant distance away from the nearest commercial cluster where retail shops, and sometimes banks, are located. The Zambia ecosystem study further found that smallholder farmers in Zambia live on average 12km away from their nearest financial agent. Traditionally financially excluded with limited access to extension services, fair markets and quality inputs, Zambian smallholder farmers face a number of challenges that limit both their productivity and household income. This is in line with the global picture of smallholder farmers being the most underserved population segment by financial services, with women and youth being at a particular disadvantage.

There are significant costs and risks associated with serving smallholder farmers, mostly related to the sparsity and remoteness of rural population settlements, more so in Zambia. While delivering financial services to the last mile is challenging, the advancement of technology and digital tools provides a unique opportunity to surmount some of these challenges. According to the benchmark study, only one in six smallholder farmers owns a mobile phone. Although phone ownership is not universal as revealed by this statistic, it does provide a stepping-stone for the introduction of digital financial services. At the time of AFA’s entry into the Zambian market in 2016, many financial service providers were coming to the same realization and beginning to introduce more digital financial services, though this was heavily skewed towards the urban market.

In addition to the ecosystem study, AFA conducted Human-Centred Design (HCD) research with smallholder farmers to better understand and map the challenges and opportunities that exist within their internal ecosystems. The HCD research developed a seasonal activity map for Zambian smallholder farmers, which informed the products and services they needed at different points in the year. For example, bridging loans between December and January could enable farmers to sustain their families and pay for school fees after having invested heavily in farm inputs and hired labour for cultivation in November.

AFA adopted a market-facilitation model to drive scalable, commercial product innovation for SHF with its ecosystem partners. Program activities ranged from product design, developing go-to-market strategies, and advising implementation, as well as conducting market research to ensure product-market fit. Key highlights of the work AFA conducted over three years in Zambia are listed below: 



ZANACO plc is one of the leading financial service providers in Zambia in terms of customer reach and branch and agent network. Given its infrastructure and its strong focus on agriculture, the bank is well poised to serve smallholder farmers. ZANACO has experience financing smallholder farmers through their Lima Credit Scheme, which reached almost 20,000 farmers at its peak. The product did well for a few years, and then began making losses due to a series of unfortunate developments. AFA supported ZANACO in running a diagnostic on the Lima Credit Scheme, getting to the root of both its initial success and eventual failure. The end product of this effort was a strategy regarding targeting smallholder farmers with a digital financial product, which AFA spent months refining into a Minimum Viable Product (MVP) for pilot with smallholder farmers. Through technical assistance ranging from facilitating a learning visit to Kenya, to business modelling and partnership facilitation, AFA and ZANACO developed AgriPay, a zero-cost transactional account that will eventually allow farmers to save, borrow and access agronomy tips through the same platform. Finally, AFA facilitated ZANACO’s introduction and partnership structuring with organisations such as the Cotton Association of Zambia and Vitalite as part of the product’s go-to-market strategy.


Having begun on the market only offering over-the-counter money transfer services, Zoona has made great strides in developing more sophisticated and holistic digital financial solutions (DFS). With increased competitiveness in mobile money, Zoona has developed a consolidated brand, Zoona Plus, a holistic digital wallet offering that allows customers to send money, pay bills, save and borrow through their platform and strategic banking partnerships. Additionally, the service provider is transitioning its outlook from customer-facing to a fintech that offers relevant solutions to other financial service providers. An example of this in action is Zoona’s partnership with Atlas Mara bank, that extends Zoona’s agent network to Atlas Mara customers, allowing them to transact at any Zoona booth nationwide. Zoona has also grown its rural presence by recruiting and training agro-dealers as retail agents. Through meaningful and sustainable partnerships, a strong DFS platform, and an extensive agent network, Zoona has great potential as a market enabler for driving greater financial inclusion, especially for rural-based customers such as smallholder farmers.


Social Enterprises – Vitalite, Rent-to-own, Pula:

AFA has run several engagements with value-added service providers who are committed to serving rural-based smallholder farmers. Some common necessities across the different service providers include:

  1. The need for a trustworthy rural touchpoint to interface with smallholder farmers, often agrodealers or lead farmers.
  2. The benefit of peer-to-peer learning and trusted referrals in farmers adopting new technologies.

Both Vitalite and Pula work through established local businesses who already serve their own network of farmers within the community. While Rent-to-Own has its own sales staff, this staff often mobilises farmer groups that facilitate community-level engagement and peer-to-peer learning. Social entreprises are key in driving rural development and agricultural advancement in Zambia. From helping farmers adopt meaningful insurance to introducing improved farm inputs such as drought resistant seeds and solar irrigation pumps, value-added service providers can be considered the front line in driving increased farmer productivity and resilience. Through a robust field-level sales force, value added service providers offer well-established relationships with farmers and farmer networks, from which DFS providers can introduce new products. AFA facilitated one such partnership between Vitalite and ZANACO; which has seen both the onboarding of Vitalite farmers as bank customers and Vitalite agents as ZANACO Xpress agents.

Farmer-Centric Organisations – WFP, CAZ, DAZ, iDE:

Farmer-centric organisations such as WFP play an important role in facilitating market access as well as the adoption of improved farming practices. Much like value-added service providers, farmer-centric organisations work through trusted community-level organisers, be they lead farmers, facilitators, or agrodealers. Through the formation of sustainable and mutually-beneficial partnerships, farmer-centric organisations provide a trusted entry-point for DFS providers looking to expand into rural areas. As an example, 27 Farm Business Advisors under iDE’s network have been onboarded as ZANACO Xpress Agents. These FBAs serve a collective network of approximately 90.000 smallholder farmers throughout the year. Farmer-centric organisations play a pivotal role in enhancing farmer productivity through advising on input selection and use, as well as connecting farmers to markets. They hence solve for challenges that financial service providers often face in dealing with smallholder farmers; the need for a guaranteed market and a farmer’s good yield.

Over three years of active engagement, AFA has seen a number of shifts on the Zambian market including:

  • Increased mobile phone ownership;
  • Emergence of partnerships between traditional and non-traditional financial institutions;
  • More complex and comprehensive financial products and rapid agent network expansion with a marked interest in a shared agent network.

AFA’s partners have also seen great shifts in their internal models. ZANACO, a leading bank in Zambia, has gone from writing-off smallholder financing entirely to launching AgriPay with 6,000 farmers. Zoona, a mobile money operator, has grown from being an entirely customer facing business to adopting more of a business-to-business model in providing an interoperable digital platform.


Savings are the biggest value-proposition for DFS uptake

Research conducted with smallholder farmers has repeatedly revealed that a savings facility is the biggest motivator for adopting digital financial solutions. The savings behaviour is something Zambian farmers already practice either through storing cash in their homes or holding onto farm produce to sell for cash at a later stage. Farmers appreciate the safety that a digital wallet can provide, and hence are more keen to adopt and use DFS if it meets their need for safe storage and enables financial planning. 

Farmer-centric organisations enable more effective go-to-market implementation

In piloting AgriPay, AFA facilitated partnerships between ZANACO and the Cotton Association of Zambia, the Dairy Association of Zambia, iDE, Vitalite and the World Food Programme. These organisations were able to conduct sensitisation campaigns and ensure that farmers under their network were primed for account opening once the ZANACO acquisition team was on the ground. This has allowed ZANACO to open accounts with 6,000 so far. 

Introducing digital financial solutions creates a business case for increased phone ownership

As farmers learned of the AgriPay solution and the ability to transact and save through mobile phones, those who did not own mobile devices were encouraged to do so, and made the decision to buy phones so they could benefit from the account. As previously mentioned, only one in six smallholder farmers own mobile phones. With the introduction of a tangible use case, such as AgriPay, farmers see more value in phone ownership and are more likely to procure phones. Phone penetration and the introduction of DFS can hence move in tandem. 

Agrodealers make a better customer acquisition channel than direct sales agents or brand ambassadors

Direct Sales Agents and Brand Ambassadors are traditionally located in more urban or peri-urban areas, often outside the radius of the smallholder farmers they wish to serve. For this reason their interaction with farmers is limited. Agrodealers, on the other hand, are based within the communities they serve and are often farmers themselves. As regulation around banking agents is changing, and provided that adequate risk-mitigating measures are put in place, agrodealers could play a more crucial role in customer acquisition for financial service providers. In partnership with UNCDF, ZANACO was able to onboard 300 new agents, a majority of which were agrodealers. Zoona was also able to onboard 60 new agro dealers who will serve as a channel for smallholder farmers to access more digital financial solutions through a shared agent platform. 

Farmers appreciate digital capacity-building tools, but only as a refresher for in-person training

While farmers appreciate having training videos on their phones, they value in-person training more for the ability to engage and ask questions where they are unclear. 


By the end of 2019, through various implementing partners ranging from banks to pay-as-you-go solar providers, AFA enabled 258,997 smallholder farmers to access digitally-enabled services including finance, information and market linkages. With the shifts seen in the Zambia market, mainly increased desire and value-proposition for a shared agent network and increased phone ownership, the uptake and use of digital financial services by smallholder farmers are set to rise.  


Samantha Malambo – Consultant Program Coordinator, Mercy Corps AgriFin Accelerate

Elena Holtkotte – Strategic Learning and Communications Lead, Mercy Corps AgriFin

Muthoni Mugo – Program MErL and Communications Officer, Mercy Corps AgriFin Accelerate