With the help of mobile phones, financial institutions are able to develop huge databases of rural customers
decade ago, when Kenya’s Equity Bank used vans to provide banking services, it really seemed novel. Equity Bank’s genius at the time lay in demystifying the bank to the common ‘mwananchi’, making banking services more accessible to Kenya’s rural communities.
Similarly the mobile phone has brought financial services literally into our hands, facilitating the entry of millions of previously unbanked people into the formal financial sector. Services such as M-PESA, which allows users to transfer small amounts of money, are credited with Kenya’s huge leap in financial inclusion.
The mobile phone is now catalysing the way financial services are delivered to the agricultural sector, enabling access to financial services, for the first time, for African smallholder farmers. Make no mistake, financing smallholders remains a big challenge. Smallholders in Africa are trapped in a vicious cycle of poverty marked by old farming methods, inadequate resources, poor yields and low income. Poor infrastructure in the rural areas makes it expensive for financial institutions to serve rural communities and for farmers to connect to markets. Global warming calls for the adoption of new, climate-smart farming practices and technologies that will preserve the Earth. If they don’t adapt, African farmers will remain perpetually vulnerable.
© 2019 KPMG Kenya, a registered partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.