The digital sharing community for rural agricultural finance

Developments are compelling financial service providers to adapt. New distribution channels and digital financial concepts can play a crucial role in facilitating access to appropriate financial services in rural areas.

Microfinance institutions find it challenging to afford the high costs associated with accessing these new digital services. Given the relatively low financial profitability of microfinance institutions in the Central African Economic and Monetary Community (CEMAC) zone, the digital transformation process is progressing very slowly.

In order to facilitate the digitisation of financial products and services, incorporating financial offers tailored to rural areas, and to support partners in their digital transformation journey, the ProFinA project has assisted its microfinance partners in implementing a digital platform/digital sharing community. This platform will enable them to continue their digital transformation process even after the project concludes.

What is the digital sharing community?
 

Statistics reveal that the usage of digital financial services in Cameroon is among the lowest in sub-Saharan Africa. For instance, less than six per cent of the rural population in Cameroon have access to digital financial products and services, whereas this figure rises to ten per cent in urban areas (World Bank data 2021).

As the ProFinA project gradually phases out, brainstorming has been initiated to pool efforts to accelerate the digital transformation process, given the constraints linked to the weakness of financial and human resources. The idea of creating a digital sharing community within the microfinance institutions is the result of a long process in which the global project has been supporting the microfinance institutions in digital transformation.

The digital community serves as a platform for sharing experiences, pooling resources, conducting research and developing digital solutions. The urgent objective of this community is to enable institutions to improve existing products and services or create new ones through digital solutions that cater to the needs of small rural farmers, cooperatives, and agricultural small and medium-sized enterprises.

How the platform came to be
 

The idea of creating the digital sharing community platform was conceived during the International Conference on the digitalization of agricultural finance in Lusaka. At this conference, several microfinance institutions welcomed the initiative and joined the GIZ AgFin nedtwork. The following phases guided the establishment of this community:

• Phase 1
  Designing the functional, operational, and organisational models of the digital platform.
• Phase 2
  Planning the implementation of the virtual platform, as well as the physical, logistical, and chronological aspects of the community members’ (face-to-face) meetings.
• Phase 3
  Developing or installing and configuring a professional community management software application/solution.
• Phase 4
  Managing and animating the digital community.
   

Why become a member of the sharing platform?
 

Any individual or organisation interested in the digitalisation of agricultural finance, regardless of their location, can become a member of this platform. This includes financial institutions, fintechs, donors, OTMs, open-source developers and more.

The advantages of being a platform member:
 

• a legal framework recognised by the Cameroonian law on associations;
• a secure framework (organisational and IT security) for sharing knowledge, good practices and pooling of efforts.
  To illustrate this, more than three IT projects within two microfinance institutions (an application for collecting savings in rural areas and an application for granting credit scoring to soybeans producers in the northern region of Cameroon) are in a pilot phase before the official launch of the platform;
• a framework that is sustainable because its financial and operational autonomy is assured by the charter;
• a framework in which the acquisition of an application or an IT solution will be 20 per cent cheaper than on the local and international market thanks to the framework agreement that is imposed on the consultants and application vendors who are members of the platform.

Contact: Denis Fonkoua Tadie, Conseiller Technique, Promotion du Financement Agricole (ProFinA), Bafoussam, Cameroun, E-Mail:  denis.tadie@giz.de 

More information:

Link to MFI Digital Community (in French)

Link to GIZ project: Promotion of agricultural finance for agri-based enterprises in rural areas

Link to International Conference on the digitalization of agricultural finance in Lusaka