Empowering East African Farmers Through Human-Centered Design
A new digital platform aims to improve farmers’ access to markets, increase price transparency and speed payments.
The Mastercard Lab for Financial Inclusion today announced the launch of 2KUZE, a digital platform that connects smallholder farmers, agents, buyers and banks in East Africa. 2KUZE, which in Swahili means “Let’s grow together,” enables farmers to buy, sell and receive payments for agricultural goods via their feature phones and opens up access to financial services.
We spoke to John Sheldon, senior vice president of Innovation Management for Mastercard Labs about the design and why development of 2KUZE and digital solutions for farmers and small merchants is important to Mastercard.
Why does Mastercard have a Lab focused on financial inclusion?
Sheldon: All of us in technology know that tech, when used properly, can be a great equalizer. Many employees dream of working on something that helps give back to the community – to help connect their work to a sense of purpose. Our Public-Private Partnerships team was talking with the Bill and Melinda Gates Foundation about the Foundation’s desire to open an Innovation Lab focused on Financial Inclusion. Through those discussions, it became apparent that perhaps the best opportunity would be if Mastercard would be able to apply the tools, technologies and talents we are using to innovate internally and point those directly at the challenges of financial inclusion. With support and funding from the Bill and Melinda Gates Foundation, that concept has become a reality. Our developers can now work on solutions that can make a difference to people who need them the most. Doing social good is good for business.
Sheldon: The team from the Gates Foundation we were working with had a focus on East Africa – Kenya, Tanzania and Uganda. We knew that region was ripe for innovation by following developments in the market and through several of our own impact studies. Kenya is at par with countries like Singapore, US and Canada when it comes to mobile innovation – and in some ways, like mobile money utilization, ahead. Technology is embedded in people’s everyday lives in the form of feature phones. According to the 2016 Mastercard Impact of Innovation study, 96% of Kenyans use their mobile phones as their primary device for communication.
What was the opportunity Mastercard saw with focusing on a product for smallholder farmers?
Sheldon: Mastercard’s global goal is to connect 500 million people to formal financial institutions and products by 2020. Improving the agriculture value chain in Sub-Saharan Africa is a large scale opportunity. According to the World Bank, about 69 percent of all sub-Saharan Africans work in agriculture.
Most farmers in Africa are smallholder farmers, which means they cultivate one to two acres of land. When farmers want to sell their crops or produce they need to bring it to the village or take it to a nearby marketplace, which could be miles away. They don’t know whether they will be able to sell the crop or what price they will get. End buyer’s visibility into these farming communities is limited and the marketplace is fragmented and full of middlemen who currently take a substantial, and arguably disproportional, percentage of the wholesale price of these goods. When the farmer does manage to sell at the right time and price, payments can be often delayed and are done in cash.
Generations of farmers have been involved in farming and selling their crops, yet there is no accounting for these transactions. They have no financial identity in the country, so financial institutions have virtually no data to assess risk, severely limiting the farmer’s access to credit in times of need or when they want to invest in their lands.
Using mobile technology, which is approaching ubiquity in Kenya, we wanted to deliver solutions that provide greater access to more efficient markets, increased price transparency and faster payments. We also saw an opportunity to create a financial footprint for these farmers and open up financial access.
So how did Mastercard develop 2KUZE?
Sheldon: We utilized an innovation process that we have been taking advantage of for a few years in Mastercard called Launchpad. Launchpad is a one-week design sprint where we get key players in the room to produce a working prototype within the week. We did not take an existing Mastercard solution and tweak it around to see how we could make it fit. Instead, during the week, we spent time talking with farmers, NGOs focused on their well-being and a few of our financial partners in the region to design a new solution. Following this sprint week, we created focus groups of farmers in Kenya, Tanzania and Uganda. We used them as a sounding board as we continued to evolve the solution. The goal was to quickly get to a minimum viable product with which to do some actual market testing and to pilot. We were able to go through a couple of rounds of this to get us to a place where we could begin to focus now on scale.
So what’s next for 2KUZE?
Sheldon: We are still early in the game. There is lots more to do. The early learnings from the pilots continue come in and we see that there are some additional features and services that we could add to 2Kuze.
At the moment, we are focused on the demand-side of the agricultural marketplace, i.e., facilitating buyer-driven requests for produce to engage the market. We are also actively looking into the supply-side of the marketplace and looking to create an environment where farmers can post details on their produce that buyers can view and bid on. This can facilitate group selling, open bidding, savings groups and improvements in payment flows.
What’s your advice to other businesses looking to design products that can make a social impact?
Sheldon: For Mastercard, with our focus on financial inclusion, our thesis has been that we need to solve a larger and more direct need for our customers. In this case, we focused on the farmers and how to help them capture a greater percentage of the wholesale price of their goods. Only then can we embed financial inclusivity as a part of that solution, gaining the larger benefits that come from connectivity to the formal economy.
You never stop learning in innovation. We are doing what we think will improve lives and build more inclusive economies. Time and scale will help us make the impact that we want. We just need to keep focused on identifying those larger needs.