#MifiMon: Agricultural Finance–Tapping Into an Untapped Market

Bimonthly, we hold the Mifi Monday Twitter discussion on a number of topics related to microfinance. Next time, on Monday, Sept. 27, 12-2 p.m. CDT (GMT -5), join our discussion on educational finance, including small-scale educational entrepreneurs, and the impact of educational opportunities on all people, especially women and girls.

In last Monday’s #mifimon conversation, we delved into http://www.opportunity.org/blog/john-magnay-on-food-security-in-africa-and-agricultural-finance/agricultural finance[/intlink], issues of financial sustainability, the opportunities and challenges of tapping into an untapped market, and issues related to power and electricity.

We were so pleased to have @ADKoehler @wwkendall @neddenriep @danalunberry @sperezlaut  and @andrewsprung on the most recent #MifiMon. Here are a few of the session highlights:

Recruiting Quality Local Loan Officers

As @ADKoehler, an http://www.opportunity.org/blog/interview-with-ghana-agricultural-finance-officer/agricultural finance officer[/intlink] for Opportunity, points out, without great http://www.opportunity.org/our-work/local-staffing/local loan officers[/intlink] for rural clients, agricultural finance can be difficult to enact. That’s why management works hard to recruit great local staff out of university graduates and national service graduates. “Our loan officers have the work ethic of ten people,” ADKoehler says. “The loan officers stay in the field Monday through Friday and have remote offices there.”

Technology and Strategies Being Employed

As @sperezlaut said, business and agricultural http://www.opportunity.org/our-work/training/training[/intlink] is a key component of making agricultural finance successful on an individual and community-based level. But clients are also reached with http://www.opportunity.org/our-work/rural-outreach/mobile banks[/intlink] and satellite branches. @neddenriep said, “It seems the sparse client density would be one of the biggest challenges to reaching a sustainable operation level in rural areas.” And @ADKoehler points out that in http://www.opportunity.org/our-work/where-we-work/microfinance-in-africa/microfinance-in-ghana/Ghana[/intlink], infrastructure like roads and bridges is growing, but it can still be a challenge to physically reach clients. http://www.opportunity.org/our-work/where-we-work/microfinance-in-africa/microfinance-in-malawi/Malawi[/intlink] also faces this problem. And Malawian clients have embraced high-tech http://www.opportunity.org/our-work/technology/technological innovations[/intlink] to overcome these limitations in infrastructure, making it more possible than ever before to reach their clients.

As @wwkendall points out, M-PESA http://www.opportunity.org/blog/cell-phone-banking-examination/cell phone banking[/intlink] service has the potential to be the most effective way of reaching agricultural clients.

Energy Issues

Cell phone usage for banking transactions is growing in popularity, especially through M-PESA. But in rural areas, as @danalunberry points out, electricity to charge cell phones can sometimes be unreliable. So to access these geographically remote clients, there need to be energy solutions in place. ADKoehler looks to solar panels to charge cell phones. There is a lot of sun in Ghana, he points out, and when needed, the panels can also be connected to car batteries to hold their charge. In the absence of personal solar panels, most clients have access to schools or clinics that run on solar power.

http://www.opportunity.org/blog/update-innovations-in-technology/Solid oxide fuel cells[/intlink] are also in development, which can run on indigenous and readily available fuels, such as palm oil, and will be available in the next couple of years. ADKoehler answered danalunberry’s query over expense and ease of use for cell phones by saying, “If they run on indigenous fuels and are cheaply produced, like they say, then I think this could be huge for alternative energy, which Africa needs desperately.”

This was a great discussion on all the intricacies, the challenges and the opportunities for agricultural finance clients. Do not miss the next #mifimon discussion about http://www.opportunity.org/blog/back-to-school/educational finance[/intlink] on Monday, Sept. 27, 12-2 p.m. CDT (GMT -5).