A digital platform to financially include farmers in Côte d’Ivoire

Scale2Save Campaign

Micro savings, maximum impact.

On the occasion of World Savings Day 2021, the Scale2Save programme of the World Savings and Retail Banking Institute (WSBI) highlights the work for financial inclusion it does with its partners in Africa.

In the framework of Scale2Save, Advans Cote d'Ivoire, a microfinance institution, has developed a digital platform with the aim of taking down the barriers that small-holder cacao farmers face to access financial services and further develop their economic activities.

The challenge of access to financial services for rural populations

In Côte d’Ivoire financial inclusion remains a major issue as 44% of adults have never used formal or informal financial services.
Among the most affected are the socially disadvantaged and excluded layers of people, in particular women, the poor and those living in rural areas.

It is important to point out that the poor financial education and the cost of financial products are all obstacles to access to financial services.
In 2017, Global Findex data also focus on the unbanked population. Indeed, the 2017 figures show that 8 million adults in Côte d’Ivoire do not have an account at a financial institution. Out of eight million unbanked individuals (59% adults) there are 52% women. The most common form of savings is home savings.

How to change this? The agricultural sector appears to be one of the sectors with great potential for financial inclusion. Indeed, smallholder farmers express the desire to acquire financial products for their households and their activities. However, very few have access to these products. (Source APIF2019 report).

Advans, an international microfinance group present in nine countries including Côte d’Ivoire is a financial player committed to the financial inclusion of producers in rural areas. Our institution works for access to quality financial services, adapted and accessible to all these populations living in rural areas.

Our innovative project, Customer Corner, a digital application

In the framework of the Scale2Save programme, Advans Côte d’Ivoire has developed an application called Customer Corner, assisted by the Senegalese FinTech Obertys. This application is available from our banking agents, a field team dedicated to agricultural producers. Our agents travel to meet agricultural producers. The opening of savings accounts is done by the banking agent from his smartphone. It takes only a few minutes.

This application now allows producers in rural areas to open their savings accounts on the spot, without paying opening fees, and without having to go to our branches. Once the savings account is opened, the producer can carry out transactions with his phone (not necessarily an Android) via a USSD MTN code.

In addition, our field agents assist our producer clients in the management of their savings accounts by visiting them and taking into account all their concerns. The producers are met periodically either individually or within their cooperatives.

By digitalising our financial services, we are faster and more efficient while maintaining the proximity of a genuine customer relationship to better serve producers in rural areas. We believe in the digitalisation of the customer journey coupled with a personalised proximity approach to better raise awareness and give a human face to the offer of financial services.

As a result, small-holder farmers have access to savings accounts, and are supported in their financial education in order to strengthen their financial security in the short, medium and long term. In October 2021, 80,000 producers were registered in our books for more than 300 million FCFA (Franc of the French Community of Africa) saved, equivalent to about 455,000 euros.

The steps ahead

However, we are facing obstacles in this mission which are:

  • Difficulties in identifying producers: many of these people do not have an identity card, some are foreigners and therefore cannot easily obtain a birth certificate without returning to their country of origin. Without ID, it is impossible to open a bank account or even a mobile money account associated with the account.
  • The lack of an “e-kyc” procedure which prevents the provision of a 100% digital customer experience: electronic signatures, for example, are not authorised.
  • The lack of interoperability between the payment systems of telecom operators implying the cost of developing individualised interfaces for the financial institution but also strong limits on use since it is not always possible to have several phones.
  • The strong culture of “cash” in the rural world within all sectors and mistrust of financial institutions due to unfortunate past experiences.

With digital finance, we are pushing back the barriers of distance, income level, and social factors, however regulations and infrastructure must also evolve if we are to truly include rural populations financially.

Scale2Save


TCB digitalizes savings groups to serve low-income women and youth

Scale2Save Campaign

Micro savings, maximum impact.

On the occasion of World Savings Day 2021, Tanzania Commercial Bank Plc (TCB), a WSBI member and learning partner of its programme for financial inclusion, Scale2Save, shared the experience of working with savings groups in rural areas. TCB developed the digital product M-KOBA to address five main challenges savings groups face. Now, TCB is taking M-KOBA further by targeting Village Savings and Loans Associations.

The development of M-KOBA

Tanzania Commercial Bank Plc (TCB) previously called TPB Bank Plc has always championed financial inclusion by providing services and products to serve the population at the bottom of the pyramid.

TBD conducted a three-year project (2018-2020) with USD 1 million provided by the Mastercard Foundation for the Savings at the Frontier (SatF) programme (Digitizing Informal Saving Mechanisms) and overseen by Oxford Policy Management (OPM). The goal was to bring on board 250,000 customers by 2020 of whom 20,000 would be purely rural. TCB launched the project in 15 locations, all in rural areas. The project led to the development of a pure digital group saving product called M-KOBA.

Launched in January 2019, M-KOBA is a mobile based product meant to facilitate group saving and provides solutions to five challenges that many formal and informal savings groups in Tanzania currently face. These are the challenges and the way M-KOBA addressed them:

  1. Security: Banking through this mobile account, the security of funds of customers is high, compared to the traditional saving mechanisms they normally use.
  2. Transparency: The whole process starting from customer registration to fund transfer (depositing) is transparent in the sense that all group members are involved.
  3. Convenience: The M-KOBA product is very easy for customers to understand and use. With M-Koba, individual members can contribute, apply for a loan and vote through their mobile phones, without physically convening in one place.
  4. Cost effectiveness: All customers transactions via M-KOBA are free of charge except for balance checks which are available for a small fee.
  5. Accessibility: M-KOBA is accessible anytime and anywhere, through the customer’s mobile phone.

Taking it further

To extend the project further, in October 2020, TCB entered into a partnership with Plan International Tanzania (Plan).

Plan is a child centered organization that advances children’s rights and equality for girls. Plan has been working in five thematic areas: Child protection, Maternal, Neonatal and Child Health and Nutrition (MNCH&N), Equal access to basic education, Water, Sanitation and Hygiene (WASH) and Youth Economic Empowerment (YEE).

Plan’s YEE programs have been supporting vulnerable youth, especially young women and their families to improve livelihoods. This through provision of market relevant skills, support formation of Village Savings and Loans Associations (VSLA) and by facilitating linkage to private sector economic opportunities. VSLAs are informal, have simple record keeping, and members have full ownership and control. This methodology enables VSLAs to provide basic financial services to people in remote areas that lack infrastructure. The group members are 80% women and their main economic activity is agriculture. However, VSLAs face some limitations in offering financial services to its members, including:

  1. The safety of the money is not guaranteed, as VSLA save their money in metal boxes at home.
  2. At the initial parts of a cycle, the group has little money, which makes it difficult to meet its members’ credit needs.
  3. At times, when the loan demand is low, the group has excess liquidity and would rather save these excess funds in a bank account, where the money is safe and can earn some interest instead of lying idle.
  4. Since the loans from the group are based on member’s savings, the group is unable to provide larger loans. Also, the tenure of the loans is short, which is not appropriate for investing in income generating activities which have a longer pay-back period.

In order to address these limitations faced by the VSLAs, Plan and TCB entered into a partnership, whereby TCB would provide 2 products:

  1. M-KOBA, a digital form of saving money, accessing loans and sharing earnings to VSLA members. M-KOBA provides security of the VSLAs’ money, increase transparency and simplicity for members to contribute through mobile agency banking M-Pesa. M-KOBA digitalizes the VSLA processes and increases safety by using bank or M-Pesa savings accounts.
  2. Group savings products and potentially/eventually other bank products and services to the VSLAs formed i.e. Group loans and Group Life insurance.

Photos: ​Between August and October 2021 in Isanzu, Nyang’ingi, Sangabuye and Laela villages, saving group representatives met with TCB and Plan team to be trained on how to use M-KOBA, group loans application processes and life insurance.

Scale2Save


Bank financing for SMEs must be protected in Basel III finalization

The European Parliament (EP) should revise the measures that would eventually limit bank financing for ’unrated companies in the European Commission (EC)’s proposal for the finalisation of Basel III standards, said yesterday MEP Markus Ferber, Coordinator for the EPP Group at the EP’s Committee for Economic and Monetary Affairs (ECON).

At a panel discussion organised by the European Savings and Retail Banking Group (ESBG), the parliamentarian said that most SMEs are likely to be ‘unrated companies’ and do not have the resources to get external rating, in contrast to large companies.

“I really want to safeguard that SMEs have access to financing and I’m not very convinced that Commission’s proposal on the unrated corporates is the solution”, he said to the agreement of most of his fellow speakers at the panel discussion ‘The impact of Basel III implementation on the EU economy’.

“We hear the concern about all those corporate clients of the banks who don’t have an external rating” said Johanna Orth, Head of Group Regulatory Affairs at Swedbank and Chair of the ESBG Task Force on Basel IV, who moderated the discussion. The Commission’s solution of a preferential risk weight for unrated companies during a transitional period ending in 2032 is “highly appreciated but still has an end date”, she stressed.

ESBG’s over 800 members are savings and retail banks who have SMEs as some of their main clients and have an important role as a motor of the EU’s real economy.

The EC’s DG FISMA Head of Banking Regulation and Supervision, Almoro Rubin de Cervin, had kindly given a brief presentation of the EC’s proposal announced at the end of October.

One of the key issues for the EU’s financial sector moving forward will be “to advance with the banking union”, said MEP Jonas Fernandez, EP’s ECON Coordinator for the S&D Group.

CaixaBank’s Head of Public Affairs, Christian Eduardo Castro, considered the EC’s Basel finalisation proposal “well-balanced and realistic” but called for some revisions, including on equity investments and disclosure requirements regarding operational risk.

ESBG Managing Director, Peter Simon, closed the event, the first one organised in ‘hybrid’ mode. “This type of dialogue is important to enhance the cooperation between all stakeholders to ensure proper and well-balanced implementation of the final Basel III standards”, he said.