Advans Côte d’Ivoire won the European Microfinance Award on 15 November thanks to its innovative mobile banking solution for cocoa farmers. The 2018 prize theme was ‘Financial inclusion through technology’. Advans CI’s project was selected from 27 projects coming from 22 countries.
A population that contributes strongly to the country’s GDP but with limited access to banking services
The cocoa sector is vital to the economic growth of Cote d’Ivoire, the world’s biggest cocoa producer. There are currently about 1,000,000 small cocoa farmers in Côte d’Ivoire contributing to up to 10% of the country’s GDP. However, cocoa farmers remain excluded from traditional banking systems. The very low financial inclusion of this segment is mostly due to the fact that rural clients are often seen as too risky and costly to serve for financial institutions, due to unforeseeable seasonal and macroeconomic effects and lack of infrastructure in rural zones. The low financial inclusion of farmers leads to several crucial challenges: cooperatives are often obliged to pay their farmers in cash, creating security problems with a high number of violent robberies and lack of transparency because payments are difficult to trace. In addition, farmers are very vulnerable to unforeseen events and have difficulties in managing their budget and household finances.
The first mobile banking solution for cocoa producers
Advans CI’s mission is to accelerate financial inclusion and to respond to the needs of underserved populations. After developing a financing system for cocoa farmers through cooperatives from 2012 onwards, Advans was looking for a solution to encourage cocoa producers to save and increase their financial stability. Thanks to some studies on the field, Advans discovered that 86% of producers had already used. In 2015, Advans Côte d’Ivoire decided to benefit from the expansion of mobile technologies to launch the first tailor made digital mobile solution for cocoa farmers in Cote d’Ivoire.
This solution gives farmers and cooperatives access to a digital banking service through entering a short code on their telephone thanks to a USSD menu. Via this menu, cooperatives can pay their producers through an instant digital transfer. The producers have access to a savings account and services enabling them to deposit or withdraw through MTN Money, Advans Cote d’Ivoire’s partner. In 2017, 188 cooperatives used the service, with at least 1 farmer registered, with over 14,000 farmers in total using the service.
A digital and human approach
In order to ensure the success of its digital service, Advans put emphasis on accompanying clients throughout their client journey with Advans. 47% of Advans cocoa producer clients are illiterate and need help in their first steps in digital finance. Advans CI hired and deployed a network of financial inclusion field agents In order to sensitise, train and support the farmers in their first steps in digital finance. There is an important need for the cocoa farmers to be trained and supported during their first digital transactions with field agents. Every day, field agents go to the villages to meet farmers and train them on how to manage their account through the mobile menu.
An additional digital school loan to promote children’s education
During its studies with cocoa farmers, Advans discovered that 40% of cocoa producers have to send their children to school an average of 2 months late because they do not have the funds to pay school fees at the beginning of the year. With the low level of literacy education is a key vector for the social development of this target population. Advans therefore decided to design and pilot a tailored digital school loan available to farmers on their mobile banking to support cocoa farmers in sending their children to school. After a successful pilot in 2017, more than 1,100 cocoa producers have benefitted from the school loan in 2018.
A promising future for digital channels
These first examples of success are promising, and pave the way for the deployment of similar solutions in other sectors and for other populations who are excluded from traditional financial services. Advans is convinced that its digital solution will help it to continue to promote financial inclusion of unbanked or ill-banked populations in Cote d’Ivoire or in the other countries of its network.