Building Zambia’s First Digital Financial Services Platform for Smallholder Farmers

Sep 12, 2019 | All, Digital Financial Services, Farmer Capability & Smart Farming

Mercy Corps’ AgriFin Accelerate program worked with the Zambia National Commercial Bank (ZANACO), as an innovation partner by developing a farmer-centric product, business modelling, and brokering relevant partnerships to launch AgriPay®, a mobile-based platform that provides a holistic customer value proposition for smallholder farmers.

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Smallholder farmers feed the world – it is estimated that 70% of the food we consume in Sub-Saharan Africa is produced by smallholder farmers. This is no different in Zambia, where the 1.6 million smallholders form the mainstay of the rural economy, contributing to 6.5% of Zambia’s GDP. Despite this critical role they play in ensuring food security and providing employment to about 54% of Zambia’s population, smallholder farmers remain the most underserved population. Subsequently, they are unable to reach their full potential because they lack access to financial products & services, high value & stable markets, and agronomic information. While the Food Reserve Agency (FRA), and a few large organisations mostly influence Zambian crop markets, smallholders still face restrictive transport costs and aggregation challenges, hindering access to markets. Delays and inconsistencies in the Farmer Input Support Programme (FISP) suppresses farmer yields, leading farmers to recycle expired inputs from previous seasons. Many smallholders also lack modern agronomic understanding, while extension service networks are often not able to reach remote farmers.

Building a farmer-centric product

The ZANACO and AFA partnership is centered around developing a comprehensive solution to meet the needs of smallholder farmers. AFA conducted human-centered design (HCD) research to understand farmer pain points and identify opportunities for ZANACO to build a product that meets these needs. Specifically, farmers’ prioritized needs around (i) safe storage for their funds, (ii) information regarding good animal husbandry and farming practices, (iii) timely payments for their produce, and (iv) increased access points / rural agent networks to transact. AgriPay was designed to provide a holistic customer value proposition that includes account opening, access to markets, access to agronomic information, and a suite of digital financial products for farmers.

Is there a business case for financial institutions to serve smallholder farmers?

The cost-to-serve smallholder farmers is high, and indeed last-mile delivery of products and services deters most service providers from investing in their rural markets. For example, in Zambia’s cotton value chain alone, up to $50m in cash is disbursed as payment to over 200,000 highly dispersed smallholders for their crop. To lower this cost, mitigate the inherent risk in smallholder financing, and realize the commercial value of Digital Financial Services for smallholder farmers, ZANACO took a buyer-led, full value-chain approach i.e., onboarding farmers through buyers/off-takers & farmer organizations, as well as leveraging distributors/aggregator networks to increase their rural agent footprint.

Reaching Women

On average, women contribute to over 40% of the agricultural labor force in Sub-Saharan Africa, yet in Zambia they remain the most financially excluded group at 77% (FinScope 2016). Our approach to reaching women took a gender-inclusive design approach, rather than focusing on creating “pink” products that would target only women; we found that the business case for such niche products was not strong enough to build a financially viable product. Our approach to reach women through AgriPay is thus inherent in the product design process as well as the go-to-market strategy.

During the product design phase, AFA conducted human-centered design research with women farmers and women groups to understand their needs and incorporated these into the product design. For example, women tend to be more risk-averse, hence the solution includes savings as an alternative to the use of credit to meet needs in the household.

In designing the go-to-market strategy, we noted that private sector stakeholders see the value in reaching female clients, but may not have the capacity to target them as a standalone customer segment. As such, the go-to-market for AgriPay includes working with women-centric organizations to reach women farmers.

What is AgriPay today?

AgriPay’s transactional account was first piloted on 27th February 2019 and to-date, there are 3,500 smallholder farmers who have opened accounts with ZANACO and are currently transacting on the platform. In the next quarter, ZANACO will be launching the savings account linked to the platform, as well as dairy agronomic content accessed through SMS, developed by Arifu. ZANACO is working with partners such as Cotton Association of Zambia (CAZ), Dairy Association of Zambia (DAZ), International Development Enterprises (iDE), VITALITE Group, Musika, and the World Food Programme to ensure scale and sustainability of the product. To maintain activity rates for farmers onboarded, registration of agents in rural areas is also ongoing in collaboration with our partners. Established agro-dealers and structured farmer collection centers have been key in expanding the agent network for better access in the rural areas.

Because of the account, we’ve agreed that we won’t spend much on transport costs because we can pay for inputs here and then send someone to go and pick up the inputs from town.

I would like more people to sign up to the account so that an agent moves closer to my location; I think the more people who sign up then closer the agent will come to us.

I used to spend a lot of money on alcohol, but now that I have an account, I feel I can manage my finances better.

Preliminary feedback on AgriPay from farmers in Lundazi

Initial insights from farmers show that the most valued feature on the AgriPay platform is the savings account. Farmers, especially women were excited to have a safe place to store their funds, and the prospect of the interest earned on the savings account was a significant incentive. We envision that AgriPay will enable increased savings and translate to increased investment in agriculture and consequently result in increased income, resilience to shocks, and overall productivity of smallholder farmers in Zambia.


Christabell Makokha – Zambia Country Director, Mercy Corps AgriFin Accelerate

Betty Muriithi – Digital Financial Services Manager, Mercy Corps AgriFin Accelerate

Jessica Chisompola – Head of Alliances, ZANACO

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