Whenever I travel to rural parts of the world, the farmers I meet talk about one thing that holds them back: they can’t save their money.
They don’t mean they spend more than they earn. They mean that, literally, they don’t have a safe place to put their money, since 235 million of the world’s farmersdon’t have banks.
Storing it at home is risky. Your house could catch on fire or be swept away in a flood—or someone could break in and steal all of your savings. For many poor smallholder farmers, the solution is simple: you don’t save at all.
If you don’t have a safe place to store your money, the smartest thing to do is spend as you earn. That’s a problem, though. Farmers make most of their money during harvest time, and they spend the most during the planting season when they buy seeds. Without money saved up, farmers can’t afford high quality seeds and fertilizer.
Luckily, there are a number of innovative companies working on creative solutions. A Mali-based company called MyAgro has a particularly clever approach.
MyAgro is essentially a layaway system that takes advantage of the fact that more than half of the world’s unbanked farmers own mobile phones. Each farmer gets their own MyAgro account, and they use their phones to add money little by little to it throughout the year. Once they’ve saved enough, they can use their savings to buy better seeds and fertilizer than they would have access to normally.
The thing that impresses me most about MyAgro is their ability to develop trust with their customers. If you’ve never used a bank before, handing your money over to someone else requires a huge leap of faith. MyAgro has put a lot of time and energy into building trust, and the results show. The company worked with 45,000 farmers in Mali and Senegal this year, and they expect to reach 200,000 by 2020.
They’ve done it in part by giving their customers a clear view into their accounts. You can use your phone to check your balance at any time. When you reach your goal, you get a text congratulating you, and the system automatically triggers a delivery. MyAgro’s seeds and fertilizer are calibrated to the local ecosystem, so they’re more likely to thrive. They also train their farmers how to microdose, which is a way of planting that uses fewer seeds and fertilizer.
The results so far have been pretty impressive. MyAgro reports that farmers who use their system see a 50 percent larger harvest overall. That’s no minor achievement. A bigger harvest could mean the difference between affording to send your kids to school or not, or between having enough food to survive a bad year or not.
The ability to save money using mobile phones could transform the lives of farmers and help lift them out of poverty. I’m inspired by the innovative ideas coming out of companies like MyAgro, and I can’t wait to see what other brilliant minds come up with in the future.