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How digitizing agricultural input payments in rural Kenya is tackling poverty

A new case study by the United Nations-based Better Than Cash Alliance shows how agriculture nonprofit organization One Acre Fund, in partnership with Citi Inclusive Finance, successfully digitized loan repayments for farmers in Kenya. This move significantly boosted transparency and efficiency, driving economic opportunity and financial inclusion for thousands of smallholder farmers and their families.

One Acre Fund can now reach more farmers with greater reliability, and staff can spend almost half as much time collecting payments in cash, using that extra time to help farmers increase their incomes through training and educational programs. With One Acre Fund’s package of services, including training and inputs like seed and fertilizer, the average farmer participating in the program earned nearly 50 percent more than peer farmers who do not participate.

Nonprofit organization One Acre Fund (OAF) teaches better crop management techniques and provides inputs on credit, like seed and fertilizer, to smallholder farmers throughout East Africa.

The results speak for themselves: In 2015 the average Kenyan farmer in OAF earned $211 (or 48 percent) more than peer farmers not in OAF. Productivity growth for smallholder farmers is essential to achieve the Sustainable Development Goals of ending poverty and achieving food security.

Digitising loan repayments in Kenya

Since 2014, OAF has enabled farmers in Kenya to make loan repayments digitally using the mobile money service M-Pesa instead of in cash, increasing economic opportunity and financial inclusion in some of the world’s poorest farming communities, see figure below as to how it worked:

Source & Copyright©2017 - Better Than Cash Alliance

 The Better Than Cash Alliance report on the initiative showed that:

  • Farmers unanimously preferred digital payments. In a 2015 survey of 250 farmers, 100 percent preferred mobile repayment to cash, citing convenience and transparency. As one farmer explained, in the old system, “you didn’t know if the money had arrived, and you used to get confirmation after a week. Now, the very day (after I make a payment] I get an SMS with my name on it, and my balance has reduced.”
  • Fraud reduction benefited women farmers especially: Instances of repayment fraud fell 85 percent after digitization of repayments, and anecdotal reports indicate farmers (particularly female farmers) and staff feel safer because the risks of holding cash are reduced.
  • Farmers no longer had to wait two weeks to have payments registered: Total processing time for each repayment fell from 16 days to 2-4 days. Farmers now know immediately when their payment is received – they do not have to worry about whether it arrived.
  • OAF costs fell dramatically: Total repayment collection costs for OAF fell 80 percent, as manpower-intensive cash and 80% decrease in repayment processing costs.
  • Farmers benefited from field officers having more time to help them: Time spent by OAF field officers (FOs) on collection activities was cut almost in half, enabling them to spend more time working with farmers to increase their incomes from agriculture.
  • OAF payment staff redeployed to benefit farmers: The number of people employed in repayment processing fell to four, from 56 prior to digitization, with four out of five of these people being re- employed in more productive parts of the organization, providing a strong example of thoughtful change management.
  • Technology problems were solved: Initial problems with reconciling payments from multiple phone numbers for one account were managed by OAF and Citi Kenya. OAF is trialing a unique ID number for farmers, which will increase digital payment efficiency even further.


  • “Mobile repayments have allowed us to increase our efficiency and provide better service to farmers,” said Mike Warmington, the Director of Microfinance Partnerships at One Acre Fund. “We’re excited to be working at the forefront of this technology in the smallholder agriculture lending sector. In our experience, farmers were empowered to thrive in these communities. Clients receive immediate confirmation of payments as they happen, enabling them to better manage their businesses and family finances.”
  • “Citi’s footprint, track record in inclusive finance and transaction banking capabilities enable us to provide global support to leading social enterprises like One Acre Fund,” said Bob Annibale, Global Director, Citi Inclusive Finance. “Among other benefits, digitization enables efficiency and security, and drives innovative and inclusive business models. Citi is proud to play a part in enabling One Acre Fund and other organizations like them to improve the livelihoods of farming communities.”

Future development

“For companies and nonprofit organizations who want to work in rural Africa, this success story is a must-read,” said Oswell Kahonde, Africa Regional Lead at the Better Than Cash Alliance. “Digital payments are essential to building sustainable business models and creating long-term impact. By enabling smallholder farmers to make and receive payments digitally, we are creating transparency and accountability which translates to numerous benefits and empowers people to take control of their finances.” 

One Acre Fund is an example of the significant benefits and impact that digital payments and inclusive digital financial infrastructure, as developed in Kenya, can bring to agricultural value chains, contributing to a more sustainable and productive agriculture sector, a cornerstone of the UN’s Sustainable Development Goals (SDG). These learnings can easily translate to poor farming communities in other countries and One Acre Fund is working on plans to expand in Rwanda, Tanzania, and Zambia in the future.

CTMfile take: This is real - live or die - cash management. Wonderful.

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