PHB Development has been working for a number of years to support efficiency in the agriculture sector through the implementation of Digital Financial Services (DFS). For example, in the maize value chain in Uganda – from crop production, processing, and trading, to final consumption – PHB consultants are designing digitization strategies to benefit farmers and their workers, as well as merchants and other actors in the value chain.

“Digital operations are more efficient for multiple parties over greater distances, and cash-less transfers at the trader level enable more timely delivery of payments to farmers. This also stimulates the growth of the mobile money ecosystem among smallholder farmers,” said Stephen Waiswa, a Value Chain and DFS Consultant with UNCDF. Digitization initiatives in agriculture are taking place in Uganda as part of the High Volume Payments Projects supported by UNCDF.

Agroways is a grain management company in Uganda that is responsible for processing, storing and trading maize in local and regional markets. Agroways engaged the MobiPay service provider in 2017 for the digital implementation of its supply chain. “Building and consolidating basic mobile money structures like agent networks, and liquidity management help enable digitization, and it’s important to take into account the needs of farmers in order to build a sustainable system of conducting business,” added Mr Waiswa.

PHB carried out research on the maize value chain in Uganda on introducing an agriculture management information systems system to the farmers. Goals of Agroways through working with MobiPay were taken into account in the research:
a) Work directly with farmers to sustainably grow yields, helping to guarantee maize supply with better linkage on the source of materials to supply processing plants
b) Improve livelihoods within its farmer groups through improved access to financial services, products and channels – and establish better partnerships with farmer groups
c) Improve payment transfer efficiency within the organizations and supply chain
d) Strengthen the maize value chain ecosystem through digital payment systems

Agroways established a digital platform through MobiPay, and a financial inclusion team supported in digitizing processes. MobiPay also brought farmers on board in the new system and provided training in the use of mobile money. With this digital foundation, a network of agents and merchants was created to streamline the supply chain. In the implementation phase, digital bulk payments were promoted for the farmers with Mobile Network Operators to acquire commitments in the marketing and branding resources.

Through the introduction of these digital services, Agroways aims to transform some older and less-efficient ways of conducting agri-business, as it is a prominent provider of maize-based ingredients in Uganda. During the various stages of the project implementation, a number of corrective initiatives were taken to address some of the key bottlenecks. Agent Liquidity Management was implemented by having a handshake between the Mobipay Booster Team and the MNO Float Runners to ensure smooth float availability and management within the target areas.

PHB also supported this intervention to help unlock the barriers of acceptance & adoption of digital payments by identifying the right mobile money use case that resonates with the maize farmers like saving and buying airtime.

DFS can clearly continue to benefit such growth, with a focus on improving livelihoods of farmers, growing yields, and reinforcing the entire value chain. And in many cases, DFS better enable agriculture sector actors to manage their money for business, themselves and their families.

10 April 2018