Michael Hamp, IFAD 27 October 2010

Overview of IFAD-funded ICT related activities supporting rural

enterprises

2010 Information Economy Report presentation at FAO

Outline

• Mobile-phone banking pilots• IFAD-WFP Weather Risk Management Facility• Rural remittances • Agricultural value chains and marketing

Why is branchless and mobile banking relevant?

• Branchless banking:- reaches large numbers of poor rural people - uses ICT and non-bank retail agents to deliver financial services

outside conventional

• Some example:- Kenya: 50% of population is registered for M-PESA (only 23%

has bank accounts)- Remote rural community in the Amazon: 5 BB agents have made

a night-day difference!

Branchless banking: A beacon of hope

Encouraging results:• branchless banks reach remote areas. In rural Brazil, deposits and

withdrawals constitute 38% of transactions compared to 8% in urban areas

• eight branchless banks reached 37% of people previously unbanked

• Five branchless banking providers reached more unbanked people than the largest MFI in country

• The same five providers grew rapidly, needing on average three years to acquire more unbanked clients than the largest MFI in the same market

IFAD-WFP Weather Risk Management Facility

• a joint initiative of IFAD and WFP with support from Bill and Melinda Gates Foundation

Objective Increase access of smallholder farmers to a wide range

of risk management tools

WRMF focus

The WRMF focuses on four areas:

• Building the capacity of local stakeholders in weather risk management.

• Improving weather and climate services, infrastructure, data monitoring and management

• Supporting the development of an enabling environment

• Promoting the use of technology to complement ground-collected data (e.g. use of satellites, remote sensing applications)

WRMF main outputs

• pilots in Ethiopia and China• Technical publication on: ‘Potential for Scale and

Sustainability in Weather Index Insurance for Agriculture and Rural Livelihoods’ www.ifad.org/ruralfinance/wrmf/index.htm

• A technical guide for donors: Effective ways to support index insurance

• Mapping exercise with Wageningen University to determine crop vulnerability to weather and climate risk, also relative to weather data availability and household socio-economic conditions

Rural remittances

Did you know that:

• 30 to 40% of remittances goes to rural areas

• Thanks to high mobile penetration rates in rural areas, more and more money is being transferred using using mobile phones

Did you know that:

• over 200 million people going north send home $350 billion

• Remittances to developing countries total 3 times Official Development Assistance (ODA)

Remittances and mobile banking

Konecta in Paraguay:

launching a new technological platform service for fast money transfer services targeting 75,000 people

IOM and Crystal Fund in Georgia:

setting up a mobile remittance platform integrating microfinance institutions and commercial banks, to provide microloans, microsavings, and micro health insurance products

Example of IFAD’s projects using m-banking & m-remittances

ACCESS Bank Madagascar:

piloting a wired and mobile IT platform to link MFIs and remittance companies to small farmers and families of migrants in rural areas

Pro-poor value chain programmes

Smallholders in Value Chains:

• Usually disadvantaged because they lack information, which affects their negotiations with other actors in the chain.

Benefits:Reduced transaction costsOvercoming information market

failuresImproved communication along

the value chain

Input suppliers

Customers’ feedback

Buyers (actual and Potential)

Market prices

Product specifications

Storagefacilities

Transportation

Packaging

Operations

Weather

Input prices

Small-holders

Pro-poor value chain programmes: Access to information

Zambia National Farmers Union (ZNFU 4455): Business model

Service focused on needs of smallholder farmers, producers and traders

Provided focused and targeted market information

Easy to understand, little or no bells and whistles

Covered entire value chain Open to all farmers – no registration

fee for farmers Traders need to register Local content and no massive pushing Sustainability: through advertisement

©IFAD/Mwanzo Millinga

Results

Smallholder farmers better access to market info and participate on equal footing with traders

Improve negotiating power Reduce transaction cost Win-win: convergence with radio,

mobile phone and internet service has had positive impact say:

90% traders 60% farmers

40% negotiated better price Over 50% increased income

Where to next?

• How do we move from piloting and more piloting to mainstreaming ICT4D in development activities?

• What is the future of m-applications?

• When will we all embrace m-development?

• Is public-private partnership really the panacea?

• What are other viable business models to embed ICT4D in rural development projects?