Driving Digital Inclusion for Smallholders – An Ecosystem Approach

Oct 1, 2015 | All, Data & Tech Acceleration, Digital Financial Services

Digital technology can be a powerful tool to reach smallholders with information, market linkages, and financial services with extremely low costs at a sufficient scale. A recent McKinsey study estimates that mobile and internet technology can drive up to $3 billion in annual agricultural productivity gains by 2025.[i] However, McKinsey points to the specific scale challenge for mobile agriculture services, recommending a focus on the full ecosystem around farmers, including warehousing, logistics, finance, and insurance to drive a critical mass of uptake.[ii] It is difficult for a single player to achieve scale in this space on its own. Partnerships and high functioning market ecosystems are essential to build sustainable and efficient agricultural markets.[iii]

Definitions: An ecosystem is an economic community of interacting organizations and individuals. The community produces goods and services of value to customers, who are also members of the ecosystem.

The AgriFin Accelerate program goal is to support the expansion of digital financial services (DFS) to one million smallholder farmers over six years, delivered by growing ecosystems of diverse service providers in Kenya, Tanzania, and Zambia. The core problem that the AgriFin Accelerate program (AFA) seeks to address is the inclusion gap for smallholder farmers (SHF) who lack access to affordable, accessible, demand-driven financial products and services that drive higher productivity and income for farm families. The ecosystems required to serve smallholders are both complex and fragmented. Market actors are often hampered by a lack of a strong understanding of smallholder needs and are therefore unable to design impactful products, channels, and other services for them. At the same time, farmers often lack the information, trust, and capacity to access and productively utilize new products and tools.

The AFA Ecosystem Approach

Over the first three months of each country program’s inception, we conduct ecosystem analysis with a strategic learning partner, Dalberg Global Development Advisors. Ecosystem analysis allows AgriFin to contextualize impact, defining what a mature, well-functioning digital services ecosystem looks to drive an understanding of where AFA will contribute. Ecosystem analysis helps us understand what is happening at the levels of enabling environment, farmer need, and in current types and levels of service provision. We then draw on this analysis to prioritize our activities for impact, select program partners, and to position the program to play a complementary and supportive ecosystem-building role. The following illustration provides a snapshot of the scope of ecosystem analysis.

High functioning ecosystems drive efficiency and increase services. For SHFs, ecosystems of providers include buyers, suppliers, farmer unions, banks, insurers, MNOs, government and a diverse range of other players. These ecosystems are fragmented and few actors are technology-enabled. AgriFin Accelerate approaches ecosystem development through our partnership activities and through the dissemination of evidence-based learning to ecosystem actors. We will tackle the challenge of farmer inclusion following a Market Systems Development (MSD) approach that is focused on understanding why the agriculture market systems in Kenya, Tanzania, and Zambia are not efficiently working for the poor, then addressing the underlying systemic constraints that are present. This approach recognizes the poor as participants in complex market systems. To sustainably improve their lives, MSD programs ask “Why is the system itself not providing solutions,” and “how can we address the obstacles that are preventing it from doing so.”

Ecosystems, Program Design & Strategic Learning

Initial country ecosystem analysis and farmer-centric research drive the development of a defined set of program hypotheses and metrics (AFA Learning Agenda), which are then incorporated into all AFA partner engagements, learning, and the development of clear proof points which will be shared publicly. Dalberg will also conduct mid-point and end-point reviews of the evolution of the ecosystems in the three countries, both to inform the program strategy and to communicate with external stakeholders. Dalberg will work with the program to develop a strong fact base in each of the countries of focus to guide where each program can create the most impact, based on the following key metrics.

The program has been designed to help specific ecosystem players expand their services. Innovative technology companies play a vital role in the mobile ecosystem as transformative solution providers helping to overcome barriers and meet the needs required to service SHF. These companies are typically startups, however, with high incumbent risk and volatility that can impact service delivery and growth. Through AFA, technology partners may qualify for tailored management consulting engagements and sponsored attendance at an accelerator/incubator program, where they will have access to managerial mentoring support and links to early-stage investment to support viable growth. Challenge grants will also be offered to technology innovators demonstrating an impact in serving SHF.

Recent CGAP research has indicated that farmer training and ongoing information provision are among the most difficult components to promote farmer adoption and ensure ongoing delivery.[iv] Strong multi-stakeholder partnerships are often critical to success. To help address this need, AFA includes a specific component called the Farmer Capability Lab, which seeks leading ecosystem players involved in farmer capability building and supports the expansion of their work, while also identifying proof points to demonstrate the impact and return on investment for these activities.

Through our program activities and the learning generated from these activities, we are aiming to provide powerful tools for encouraging vibrant ecosystems of mobile-enabled financial and agricultural services. Armed with evidence of models and approaches that can improve efficiency, impact and viable businesses, we hope that a wide variety of private and public ecosystem stakeholders will “crowd-in” to the DFS sector, ultimately enhancing options for smallholders.


Leesa Shrader, AgriFin Accelerate Program Director

[i] McKinsey, “Lions Go Digital; The Internet’s Transformative Potential in Africa”, Nov 2013. [ii] McKinsey, “Lions go digital: The internet’s transformative potential in Africa”, Nov 2013. [iii] Grossman & Tarazi, “Serving Smallholder Farmers: Recent Developments in Digital Finance”, CGAP Focus Note, 94, June 2014. [iv] Grossman & Tarazi, “Serving Smallholder Farmers – Recent Developments in Digital Finance”, CGAP Focus Note 94, June 2014