Guide to the Use of Digital Financial Services in Agriculture

“Smallholder farmers (SHFs) have the potential to play an ever increasing role in feeding the world through sustainable supply of key agricultural commodities.”

This Guide aims to provide a quick and easy-to-use tool to understand how digital finance services (DFS) can help address some of the challenges that smallholder farmers are experiencing today - mainly, lack of access to financial services and convenient payment systems. As explained in the guide, farmers can use DFS to perform transactions via digital channels such as mobile phones, computers, and tablets. Evidence has shown that DFS can help farmers increase agricultural outcomes by reducing loss of money from transporting large amounts of cash, increasing social protection, extending services beyond bank branches, and creating new business models.

The Guide is intended to be a diagnostic tool to help organisations diagnose and assess the agriculture value chains to determine where and how DFS can be used to address the challenges that farmers are facing. The Guide is based on four in-country assessments conducted jointly by the USAID Bureau for Food Security’s (BFS) Office of Market and Partnership Innovations (MPI), the U.S. Global Development Lab's DFS team, and USAID’s FHI 360-led Mobile Solutions Technical Assistance and Research (mSTAR) project. The assessments covered four Feed the Future countries: Tanzania and Uganda, (with relatively mature DFS markets); Ghana (a rapidly expanding DFS market); and Haiti (a relatively nascent DFS market). The Guide offers a framework which draws insights from all four markets to help organisations (in particular USAID Mission staff and implementing partner staff) to perform similar assessments and plan DFS interventions for specific contexts, and specific results they are trying to achieve.

The steps explained in the Guide involve: identifying the value chain challenge or development challenge that needs to be addressed; looking at what existing services are available to meet this challenge, and identifying reasons that people are not already accessing these services; looking at DFS services, either existing or not yet available, that will help, and doing a quick assessment of the state of the DFS market. The last step is designing an intervention, keeping in mind that the best approach will likely include cooperation and partnerships with private sector and other implementing partners. 

The guide is accompanied by interactive online resource, which is intended to introduce USAID mission staff, implementing partners, and other interested parties to the guide, as well as instructional videos on DFS in Bangladesh, Malawi, and Ghana.