Dr.KendiMuchungiFIoTMEdit

Leveraging
on
Digital Financial Services
Emerging Trends
to
Drive Financial Inclusion
by Dr. Kendi Muchungi.
4th Gender Equality
and
Sustainable Development
Conference
September 27th - 29th 2016
FINANCIAL INCLUSION OF THE MARGINALISED, SEPTEMBER 2016 !1

Table of Contents
Abstract 3
The Status Quo: The Introduction 4
Emerging Technological Trends in Kenya 11
Digital Inclusion: 12
What has this meant for the Kenyan smallholder farmer? 12
Persona Interview 15
Financial Inclusion: Findings and Conclusion 19
How can the marginalised smallholder farmer access agri-specific services to facilitate financial inclusion?19
Works Cited 23

Abstract
The “Silicon Valley” of Africa, Kenya, better known as the “Silicon Savannah” is at the
forefront of the digital revolution specific to mobile e-services. If we consider that economic
development is inextricably linked to technological innovation, this should put Kenya in very
good stead. Or should it? Since 2004, the Kenyan Government put policy framework in place
such that the development of the country was tied to the agricultural sector. This was because
research had shown the Kenya’s economic growth was very dependant on how successful the
agricultural sector was. Can you see it? Economy - technology, economy - agriculture and so ….
technology and agriculture should also compliment each other, in the very least. There we have
it, in the recent past Kenya has seen over 100 agri-specific financing and non-financing digital
services and yet, out of the 34.54 million farming Kenyans, only 3.45 million have access to
these services. Of these, only 0.86 million are women. Meaning that only 4.97% of the total
number of women that farm have access to agri-specific digital services. Where is the
disconnect? How can we as a nation on the one hand be in the throes of a digital revolution
and still have so many people without access to digital services? How can we facilitate better
access to these much-needed services to expedite financial empowerment? In this paper we
look into the current state of affairs pertaining to farming and technology and propose how we
can leverage technology for financial inclusion of the smallholder farmers who constitute 75%
of the farming fraternity.

The Status Quo: The Introduction
According to Feed the Future's profile on Kenya, in East Africa, Kenya has the largest and most
diversified economy (Feed the Future, 2013). Considering that 75% of the 46.05 million
Kenyans get their livelihood from some part of agriculture and that this sector contributes to a
1/4 of Kenya's gross domestic product (GDP), the government is leveraging agriculture as the
prevailing development strategy (The World Bank , 2016). This strategy has been employed
since the 2004 Agriculture Sector Development Strategy’s 2010 – 2020 (ASDS) policy
framework was established (VSO Jitolee ) (Njenga, Mugo, & Opiyo, 2012). The reason it is1
important to tie the development of the country to agriculture is because the economic
development of the country is directly proportional to the success of the agricultural sector
(Njenga, Mugo, & Opiyo, 2012) as is evidenced by Figure 1 below. When there is growth in
the agricultural sector there is commensurate economic growth. The reverse also holds true,
when there is a decline in growth in the agricultural sector, there is a comparable decline in
economic growth.
!
Figure 1: Trends in agriculture and economic growth. (Source: GoK 2010: Statistical Abstract 2010, Nairobi)
1.5 billion people from impoverished countries live in smallholder households , many of who2
live in abject poverty (FAO 2012, 2012) Considering the fact that 80% of farmland in sub-
Voluntary Services Overseas (VSO) Jitolee is founded by The Ford Foundation1
A smallholder farmer is one who manages between 0.2 – 3 hectares of land for the purpose of sustaining their2
household. They tend to live from hand to mouth a lot of the time.

saharan Africa is run by smallholder farmers, any existing development strategy involving
agriculture should be geared towards this kind of farmer. With the knowledge that women
make up ½ of the agricultural labour force (FAO 2012, 2012) and yet do not have the same
level of access to productive resources that men do, there should therefore be more concerted
efforts made to better empowering women. Considerations of this nature would also go a long
way in helping Kenya meet her 2030 agenda for Sustainable Development Goals (SDGs), which
were adopted in September 2015, whose aim is to improve health, reduce inequality, and
address climate change (PMA2020, 2015).
In recent years, there has been a campaign raising awareness to the knowledge on feminisation
of poverty (UN Women, 2000). Even though it is said that a problem shared is a problem3
halved, we are yet to see the significant difference this awareness has brought about. This is
because women, youth, and persons with disabilities (PWDs) still represent the main
demographic domains of poverty and unfortunately, failure to effectively leverage the
opportunities provided by this reality minimises the economic window for national
development and further inclines society to political and social flux (Njenga, Mugo, & Opiyo,
2012).
Economic development via the vehicle of agriculture includes the full range of products,
services and relationships that act as enablers of agricultural and therefore economic
development (Kioko, Agricultural Market System Failure may Lead to Low Demand for
Financial Services by Smallholder Farmers, 2016). This range should consist of policies and
strategies that will facilitate the following:
1. Easy access to agronomic information.
2. Easy access to financing e.g. Working capital loans, asset financing and season based
lending.
3. Easy access to better markets for the farmers’ produce (supplier market tools and
trading platforms).
4. Bolstering the economies of scale.
UNIFEM (United Nations Development Fund for Women) describes feminisation of poverty as “the burden of3
poverty borne by women, especially in developing countries”. ~ Definition obtained from Wikipedia

5. Better modes of communication, especially with a populace that has a high level of
illiteracy.
6. Diversification of crops and animal produce.
7. Diversification of farming methods.
8. Better awareness and more transparency with regards to government participation
9. Access to a platform where the farmer can be heard, such that projects or endeavours
started with the aim of helping are actually getting to meet the needs of the populace
(think, a more bottom-up approach).
10. A central repository for all the endeavours undertaken to bolster the agricultural sector
so that there is very little overlap and better knowledge management.
Because we have determined that fate of the agricultural sector in Kenya directly impacts
economic growth, in recent years however, the marginal growth experienced by the agricultural
sector in both production volume and value has disenfranchised the farmer; This is according
to RAF Learning Lab (Makokha & Kidenda, 2015). This state of affairs in the agricultural4
sector is forcing smallholder farmers to start undertaking ‘side hustles ’. To mitigate against5
this downward trend of growth, service providers have invested in over 100 agri-specific
financial and non-financial products some of them are represented in Figure 2 below (Makokha
& Kidenda, 2015).
!
Rural and Agricultural Finance Learning Lab4
Side hustle is Kenyan slung that infers an alternate source of income to supplement one’s primary source of5
income. In the context of this article, what is being supplemented is the agricultural income.

Figure 2: Financial and Non-Financial products available to participants in the agricultural sector. (Source: Dalberg research
conducted for Mercy Corps’ AgriFin Accelerate program April – July 2015 (Makokha & Kidenda, 2015))
Apart from the issue of marginal growth, research performed by a Kenya policy research
organisation, Tegemeo Institute, has indicated that only 10% of smallholder farmers have
access to formal financing. Of this 10%, women are accessing less than 5% of this credit
service ((Kioko, Agricultural Market System Failure may Lead to Low Demand for Financial
Services by Smallholder Farmers, 2016) and (FAO 2012, 2012) ). Without easy or ready access6
to formal financing, the Kenyan agricultural market system today is finding that there is a
substantial unmet demand for agricultural products. The reasons for which are not directly
obvious, because even with the over 100 agri-specific financial and non-financial products
available, many smallholder farmers are opting not to use these services.
Figure 3: Shows an overview of Kenyans involved in farming and what population comprises of women and what number of
women have access to agri-specific financing and non-financing digital services.
(Source: Dr. Kendi Muchungi, based on research undertaken. September 2016)
Below are some statements obtained from a blog by MercyCorps, which highlights the
disintegration in the relationship between the smallholder farmer and formal financing
entities:
Food and Agriculture Organisation6

‘We have the money lenders and micro-finance that are illegitimate whose main aim
is to steal from the common man. It is through such experience that have made many
people to shy away from taking loans.’
‘I can never ever take a bank loan. Bank loans will sink you.’
A dairy farmer in Nandi County Kenya recounted how a micro-finance bank repossessed dairy
cows from a villager who was unable to repay a loan.
‘That family is now doing very badly. They took the best cows and without mercy,
sold them to fellow villagers, I can never take a loan. A big bank recently offered me
$2000 a while ago which I declined.’
If there was any borrowing to be had, more often than not, smallholder farmers would use
informal financing services, and even then most of the time for investments in anything other
than farming. Even if they take a loan to finance their farm needs, more often than not they
repurpose these loans for things like paying school fees, or, medical bills. Having said this,
small and medium commercial farmers, especially those growing cash crops and rearing7
poultry, and, pigs, tend to borrow from formal financial institutions. Financial Access states8
in a report that says, because banks categorise agri-business to be a highly risky endeavour, they
offset the risk by pegging high bank rates to these loans. This creates a situation whereby bank
loans are too expensive for the regular mwananchi.
Even though SACCOs and Cooperatives are informal sources of finance, they are not nearly
adequately equipped to meet farmer requirements. They do however help tide over other
household needs that could incapacitate a farmer and her farm, if these needs are not met.
Tegemeo Institute also stresses the need for fair prices for farmers. As things stand now, most
value chains are largely unstructured, therefore meaning that farm produce is largely sold at the
farm gate and after passing through multiple middlemen, finally getting delivered to market.
At market the price of the goods may be high, but the farmer only gets a minimal percentage of
the final price. Even when the farmer knows the end market price, this information is not
Cash crops are usually those crops that are grown for export, in Kenya these are coffee, tea and flowers.7
An agricultural financial advisory company8

enough to significantly transform the smallholder farmer’s livelihood (Kioko, Agricultural
Market System Failure may Lead to Low Demand for Financial Services by Smallholder
Farmers, 2016). To increase their income, smallholder farmers ideally need to be closer to the
end market and have a smaller/shorter value chain.
A long distance from end market, which leads to a long value chain, is not the only thing that
perpetuates market failure. Other factors that contribute to this state are:
1. Seasons cause markets to be flooded by farm products on season and thereby
contributing to a reduction in prices because competition between farmers is rife and
demand is easily being met.
2. Because most financing institutions use traditional lending models, farmers are
required to start payments of their loans immediately even if this schedule does not
complement the farming cycle.
3. Poor state of roads and lack of technologies for storage or value addition means that
farmers cannot delay sale to wait for prices to improve. When prices crash or become
unstable and unpredictable, farmers cannot afford to repay credit.
4. Other countries, offering the same agricultural products to the Kenyan farmer, that
subsidies their products such that their prices are much cheaper than those of the
Kenyan farmer. Thus making it really difficult for the Kenyan farmer to offer
competitive prices. The Kenyan farmer more often then not in these circumstances is
forced to mark down her prices, even if it means that marginal profits if any at all will
be made.
The Kenyan Government is now actively involved in enabling women, youth and PWDs
through the introduction of a few flagship programs, one of which is the Uwezo Fund. This
program affords easier financial access to promote businesses and enterprises at the
constituency level. The government is using this as one of its strategies towards meeting its
SDGs (one of which is the abolition of poverty) and the vehicle for increasing a shared
prosperity (Uwezo Oversight Board, 2016). Because smallholder farmers provide up to 80% of
the food supply, an improvement in how financing is accessed by the poorest demographic
(Women, youth, and PWDs) will cause a significant uptake in the percentage of those with

access from the current less than 5%. This in turn will cause an increase in yields on the
smallholder farm by 20% – 30%, thereby facilitating a more sustainable production system
(FAO 2012, 2012). With the numbers of those gaining access to financial services increasing
and with an increase in yields, it will only be natural that the smallholder farmer’s livelihood
should be significantly transformed, such that the 45.9% currently living under the poverty line
in Kenya (The World Bank , 2016) will dramatically decrease (FAO 2012, 2012).

Emerging Technological Trends in Kenya
The technological innovation of the printing press precipitated the revival of European art and
literature (The Renaissance), the steam engine forged the way for the vanguard of the industrial
revolution, semiconductor electronics and microchips pioneered the virtual world, mobile
devices lead to the digital mobile-commerce revolution stemming from Kenya; it can therefore
be said that economic development is inextricably tied to technological innovation (Kohli,
2015).
In 2009, the Kenyan government orchestrated the arrival of 4 fibre optic cables to the Kenyan
shores, introducing new and faster internet connectivity. This infrastructure became the
catalyst for Africa’s “Silicon Valley” in Nairobi, now known as the “Silicon Savannah”. By
2012, there were 74 mobile phones for every 100 Kenyans and of those who to access the
internet, 99% do so via a mobile device (Alexander, 2013).
As of 2013, 30.7 million Kenyans were mobile subscribers with over 1/2 this number having
access to internet; Safaricom having about 66% subscribers (Alexander, 2013). These9
subscribers are using the M-Pesa mobile payment system to facilitate basic financial transactions
(Alexander, 2013). Such transactions could be anything from paying one’s electric bill to the
loaning of money to a friend. Monthly transfers and payment of goods and services processed
via M-Pesa amount to around an astounding £733 million ($1.13 billion) and in 2012
contributed to the cash equivalent of nearly 1/3 of Kenya’s GDP ($37 billion) (Alexander,
2013) & (Kohli, 2015)). Mobile adoption in Kenya has contributed to an explosion in
innovation and had bolstered her economy by £20 billion by the year 2013 (Alexander, 2013).
Kenya’s leading local telecommunication firm9

Digital Inclusion:
What has this meant for the Kenyan smallholder farmer?
Kenyan farmers are beginning to awaken to the possibilities the digital platform has to offer. In
an article written for MercyCorps, by Lucy Kioko, of the AgriFin Accelerate Program, a number
of cases were presented in this regard (Kioko, Kenyan Farmers Go Digital, 2016). Below are the
some of the testimonials from this article showing how a segment of Kenyan smallholder
farmers are embracing this digital revolution.
1] Cornelius Kiptoo:
A 26 year old farmer from Metkei village, Uasin Gishu County, he is a smallholder farmer who
grows oats, potatoes, maize, and vegetables and also keeps dairy cows. In the past, he sold his
farm produce to middlemen at his farm gate, and even though he was paid immediately, he
never got competitive prices. To boost his gross revenue, he recently started advertising his
farm produce on OLX .10
“I decided to give it (digital marketing) a try after I saw it being advertised on
television, and to my surprise it worked! I took photos of my oats and posted them in
the online market place and to my surprise I got a buyer from the nearby town of
Eldoret. This buyer gave me $7.8 per bag of oats, which is a much better price than
the $6.0 that I used to get on my farm gate. Even with the cost of transport factored
in, I still made a good profit”.
2] Walter Cheboskwony:
A farmer from Metkei village, Uasin Gishu County. Walter is a member of ‘Mkulima Young’ .11
He uses this digital platform to gain new farming skills, market information and exchange ideas
with other members to improve his farming.
“I am fully digital”.
An online market place funded by U.S. venture firms including Bessemer Ventures and General Catalyst10
Partners, OLX sold a majority stake to the African conglomerate Naspers in 2010. OLX is free to use and makes
money selling promoted listings to users. (Payments are conducted offline, which has allowed OLX to avoid
dealing with legacy payment infrastructure in each market it enters. Source: Fortune, Erin Griffith, 29th October
2014
Mkulima Young is a social media platform encouraging young people to get into farming. Members of the11
platform share information on Facebook, Twitter, YouTube, and WhatsApp and on a website.

According to Lucy Kioko, of the farmers interviewed in Central and Western regions, 39%
owned or had access to internet enabled phones. Of these, 13% used their phone to gain
access to the internet and 34% felt that their phone was a conduit for agricultural information.
Mobile phones are being leveraged in Kenya today to facilitate:
1. Peer learning
2. Building farmer capability
3. Knowledge sharing
4. Growing the smallholder farmer community and raising a sort of informal ‘SACCOsque’
kind of structure
5. Connecting farmers to experts in the agricultural value chain
The current social media agricultural platforms are either general or inclined to a particular
agricultural value chain. The latter is usually driven by passionate individuals or by the private
sector. Some of these platforms include:
1. Digitalfarm, presently being championed in two counties, Kirinyaga and Embu. This
medium allows for voice recordings of questions from farmers and responses from experts
thereby navigating around the question of smallholder farmer illiteracy. Digitalfarm also
facilitates communication in vernacular, thereby facilitating better communication between
farmers and experts. (Gichamba & Lukandu, 2012)
2. Wanja Farm Rongai, is a Facebook group with over 26000 subscribers, which provides an
avenue for farming ideas and latest technologies for improving farming practices to be
shared. (Facebook)
3. Kukuchic is a business based in Eldoret that is using Facebook and Twitter to market and
sell indigenous day old chicks (Facebook).
4. Frescho is a seed company using Facebook and Twitter to promote the sale of rustic,
climate resilient and environmentally friendly seed varieties (Facebook).
5. Young Volunteers for the Environment is another group that is a group with about 3,000
members. It updates its members on the latest pertaining to the environment and climate
change. This empowers farmers because they are better able to keep tabs on weather
patterns and are informed on how to adapt their farming strategies so as to better cope with

climate change. They use the data provided to inform their decision on what and when to
plant or harvest.
At present, these sites have not incorporated online payment methods, which means that
farmers have to pay for their good in cash on collection, or, via mobile Money transfers.
Even with the skyrocketing advancements Kenya has made in this digital era via mobile
inclusion, 40% of the farmers in Lucy Kioko’s study intimated a preference for face-to-face
interaction to access any agricultural information pertinent to them. An indication of the deep
ingrained African culture, which dictates a more personal connection over the detached nature
proffered by a digital connection. This means that the reach desired for the smallholder
farmers, from the existing digital services, is still fledgling. However, as the trend of digital
literacy is continuously on the rise, especially mobile phone literacy, the desired reach should
also change quite significantly for the better, say 2020?
To allow greater perspective, we carried out the following interview of a community facilitator,
whom had access to women in very remote rural areas, with the hopes that we would better
understand how much reach would be needed to allow for financial inclusion.

Persona Interview
Name: Mrs. M
Gender: Female
Age: Over 50 Years
Status: Widowed, 4 Adult Children
Educational Background: Certified Public Accountant (C.P.A.)
Community Occupation: Community leader and change initiator
Farm Acreage: 2 Acres
# of People Farming the land: 3
Interview Period: September 2016
Table 1: Summary of Agri-specific expenditure for Mrs. M, per season of the specified activity, such that total expenditure
in a year can be tabulated. Unit for the manure, fertiliser and seeds are in bags. The dairy expenditure was not clearly
expressed. 2 Planting seasons
Table 2: Income and Expenditure for Mrs. M is tabulated for a good farming year and a poor farming year, so that profit can
be calculated.
Expenditure Quantity @
Season
# of Seasons
@ Year
Expenditure @
Year
Manure 50 10 2 1000
Fertiliser 70 10 2 1400
Maize Seeds 500 4 2 4000
Beans Seeds 0 0 2 0
Milk 3000 1 12 36000
Expenditur
e @ Year
Quantity
Yield
@ Season
# of
Seasons
@ Year
Income
@
Quantity
Total
Income @
Year
Profit
Plant
Farming
WITH
enough rains
6400 10 2 2000 40000 33600
Plant
Farming
WITHOUT
enough rains
6400 4 2 2000 16000 9600

Mrs. M lives in two counties. She travels across the country to offer accounting services for
her clients. She is an active member in her rural community. Mrs. M is the community
elected Chairperson for Development in her village. In this capacity she has facilitated a
number of strategic planning workshops for the village Polytechnic and Primary School. The
outcome of which was to establish 4 pillars of focus;
1. Improve quality of Education thereby raising the mean grade of the Primary School
2. Improve the infrastructure: - Ensure classes have windows and doors, fix the leaking roof,
plaster the floors and fence the compound of the school
3. Require attendance of students and have policy to enforce this
4. Foster a more transparent administration of the school resources, such that the School
administrators are accountable to the community and government.
Mrs. M also happens to be a very active member of her local Chama . This Chama is 1512
women strong, all of whom are smallholder farmers. This Chama is currently looking at a 3
plan strategy to promote the livelihood of its members. Their strategy
1. Agri-specific plan
1.1. Start a kitchen garden that grows spinach, kale, managu and onions
1.2. Start a coup with 10 chickens
1.3. A cow for each group
2. Home improvements - kitchen and home specific
2.1. 2 Sets of 12 cups, plates and spoons. 1 set for the family and the other for guests
2.2. 6 Sufurias
2.3. 3 Hot pots
2.4. Blankets, sheets and mattresses
2.5. Meko gas [in the distant future]
Animal
Farming
36000 1 12 4000 48000 12000
Good Year
Total
42400 11 14 6000 88000 45600
Poor Year Total 42400 5 14 6000 64000 21600
Expenditur
e @ Year
Quantity
Yield
@ Season
# of
Seasons
@ Year
Income
@
Quantity
Total
Income @
Year
Profit
Group of individuals who meet regularly with the common purpose of collective growth and development12

3. Home improvements - social speciﬁc
3.1. 10 Plastic seats for each member home for group and social functions
When asked if she had ever gotten a loan to facilitate her farming, she said she had not. When
asked if any of the other members had ever gotten a loan to finance their farming, she said that
none had to her knowledge. She indicated that even if there was financing available, none of
the members would take these loans because existing financing has very high interest rates.
Mrs. M informed us that if interest rates were brought down to 1% and repayment was flexible
enough such that it was pegged to the farming cycle, members would be more likely to get take
this kind of financing.
At the moment most of the members in Mrs. M’s Chama are not getting the same yield from
their farms she is, because they cannot afford manure and fertiliser. This was the reason the
group came to the conclusion that each group member needs to get a grade cow. “With a cow
they will have manure, with a cow they will have milk for the children, with a cow they will
increase their assets, because a cow will get a calf. Now there is growth.”, Mrs. M said. At the
moment, members are having to supplement their farming by taking up casual jobs, such as
digging someone else’s shamba and washing other peoples clothes, and therefore at the
moment cannot afford to buy a cow. It is for this reason that Mrs. M went to her local
government agricultural representative to ask for assistance in this endeavour, unfortunately
after one visit to their village no more followup was done. Being resourceful women, they
decided that in the course of this year they would each hire a plot (10 by 10, she wasn’t sure
about the exact acreage) that would go for KeS. 1000/= for an entire year. This plot is to be by
the river and therefore quite marshy, so that they can grow arrow roots. For each plot per
season the predicted profit to be made is KeS. 5000/=, and so for the entire year each member
would make KeS. 10,000/=. The total Chama would make in a year is KeS. 150,000/=. This
can therefore get the group 4 cows, each for between KeS. 30,000/= - KeS. 35,000/=. It will
take them 4 1/2 years to get each member a cow.
When Mrs. M was asked if she knew of any financing and non-financing digital services, she
gave an emphatic “no”, she added “I have only heard about M-Shwari, anything to do with the
ones from Safaricom. But I don’t even know all of them. I heard another day (about other
services from Safaricom) when in a workshop, I said I would follow-up, but I never managed.
But they are all expensive.”. On a little more reflection, Mrs. M indicated that she has recently
joined iShamba, a service that sends information to her phone on how she could possibly
improve her farming. “I called iShamba asking them to come and train our women and they
have not yet come”, she said quite disheartened. “Literally, I don’t know where I can get

information. …. I have tried. …. My main objective”, she pauses reflectively for a breath of time
and then continues, “I’m trying to find out how even I would have a group sms system
(through which) I could be passing any information I get”, Mrs. M finished her statement
thoughtfully.

Financial Inclusion: Findings and Conclusion
How can the marginalised smallholder farmer access agri-speciﬁc
services to facilitate ﬁnancial inclusion?
Previously, we indicated that there exist over 100 agri-specific financial and non-financial
products in the Kenyan market today, and yet, these services are not being leveraged adequately
to better support the existing smallholder farmers in Kenya, whose number makes up about
80% of the farming fraternity. Of this number only 10% are accessing these services, and even
then, less than 5% of these are women.
What can be done to facilitate financial inclusion of the marginalised (Women, youth and
PWDs), in this digital era? Based on the research done and the findings from the persona
interview (found at the end of this document), we propose the following:
1. The customer is always right:
Phares Kariuki, a mentor to entrepreneurs who left the banking sector, says that “In Kenya
everyone’s opening a mobile venture trying to solve a problem that nobody has.” This is the
sad reality of some of the existing agri-business financial and non-financial digital services
presently on offer to the smallholder farmer that is marginalised.
Any product that will be used should always be developed with the customer in mind. This
holds true also for the development of digital services for the marginalised smallholder farmer.
When coming up with a digital service, it would be beneficial to use Design Thinking. Below
are the Design Thinking steps:
i) Understand the problem the smallholder farmer is experiencing
ii) Observer the smallholder farmer in their natural habitat [I know, I know, this does read
like a national geographic documentary :-)]
iii) Synthesis observations made and then further re-define the problem with the help of a
Persona
iv) Brainstorm, always referring back to the problem, in order to ideate. Encourage wild
ideas and a mindset that promotes listening to each other and expounding on each
others’ ideas
v) Create a prototype

vi) Test the prototype on smallholder farmers. If the solution is a dade, it is better to fail
early and go back to the drawing board rather than spending lots of money and
resources on an ill-fitting idea
Apart from introducing Design Thinking into the process of service development, some
thought should be put into how these service providers should disseminate the availability of
their services. Mrs. M. suggested that the problem with these services was that they further
removed much needed human contact. She proposed that any digital service should also
require face-to-face contact from time to time. Not only would the face-to-face allow for
conversation about improvements to the service, it would also give the providers direct access to
the people they were servicing and maybe the much needed insight, obscured by distance,
thereby enabling them tweaking their service to best meet the specific needs of smallholder
farmer’s in a specific area; that is, customise their service community to community.
2. Information is power:
The development of non-financial digital services that facilitate the following:
i) Digital training on optimal farming practices, such that the smallholder farmer can
adapt their strategies to leverage the existing environment and climate
ii) Transportation logistics, which will help the smallholder farmer plan better and employ
strategies that allow for more efficient and effective transportation and storage of goods.
iii) Better market pricing of their products, because they are better informed on what
existing market prices are and what price would fetch them enough profit so that they
can transform their livelihood, without requiring a side hustle
iv) A network of varied market linkages that should offer a ready demand for their
products
v) A community of smallholder farmers that may or may not be from the same agricultural
value chain, who will encourage and support each other.
vi) The communication of the government of Kenya’s policy and strategy in regard to their
agricultural value chain, such that the smallholder farmer keeps abreast with the latest
news, guidelines, assistance information, requirements, and recommendations. This
should better enable the smallholder farmer to leverage GoK initiatives.13
Government of Kenya13

3. All on the same page?:
It is imperative that any financial digital service developed for the marginalised smallholder
farmer be fully aware of the farming cycles for each agricultural value chain. This should
therefore ensure that financing offered allows re-payment that is flexible and considerate of
when, within the farming cycle, re-payment is possible. Interest to be paid on these financing
should be much lower than the current rate being offered by the banks (Probably something for
the government to consider).
4. Give unto Caesar that which is his:
Although this saying is usually used to imply that the ‘little person’ should always follow the
rules governing them, especially when it comes to paying of taxes, it is used slightly differently
in this context. In this context Caesar represents the people of Kenya, in particular the
smallholder farmer. It is our contention that the GoK should employ policies and strategies
that empower the marginalised smallholder farmer. With the existence of services like
Digitalfarm that allow voice messages and communication in vernacular, the GoK should have
a framework in place to encourage more services like this one, which circumvents the issues
arising from illiteracy and language barriers. The GoK can support such endeavours by doing
the following:
i) Rolling out these services in all counties, whilst employing experts that can
communicate with the smallholder farmer in their language. They can do this by taking
advantage of the common routes of communication with the mwananchi; Religious
organisations, radio and television channels, government administrators i.e. chiefs and
sub-chiefs, and change initiators within communities, like Mrs. M, our use case for this
study.
ii) Offering digital literacy lessons in remote rural areas that are yet to get on the digital
revolution bandwagon.
iii) Offering subsidised mobile phones for those in remote rural areas.
iv) Subsidising airtime for the smallholder farmer that actively uses the available digital
services, as an incentive.
v) Using these services as one of their avenues for communicating with the smallholder
farmer. If they do this consistently, the smallholder farmer will become accustomed to
receiving information from GoK via these services, which would be another incentive
for the smallholder to better utilise these services.
vi) Offering basic business lessons that will encourage the smallholder farmer realise the
importance of re-investing in their farms, so as to grow their farms and eventually be
able to get better returns.
vii) Putting into place policy that ensures interest rates on agri-specific financing for the
smallholder farmer is marginal.

All in all, the English idiom that says, “You can lead a horse to water, but you cannot make it
drink”, still holds true. In as much as there is a role for all participants to play to facilitate
financial inclusion of the marginalised smallholder farmer, the final responsibility is theirs.
They have to be willing to take on the opportunities available to them, as they present
themselves.

Works Cited
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2016, from Feed the Future: The U.S. Government's Global Hunger and Food Security
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