Opportunities for digital financial services in the cocoa value chain in Côte d’Ivoire: Insights from new data
This research (PDF) by The Mastercard Foundation and IFC focuses specifically on mobile money accounts and discusses, first, how these have already expanded financial inclusion in Côte d’Ivoire and, secondly, how mobile money could help deliver products to cocoa farmers that meet their needs. Managing money can be particularly challenging for farmers since they receive the majority of their income during the harvest and this needs to cover their expenses for the rest of the year. Cacao farmers had relatively high annual incomes, but very few had bank accounts because of the perception that “banks are not for them”. However, various digital financial services (DFS) offered by mobile network operators does not have such constraints and have a high level of adoption (53%). Farmers who save money (35%) are better able to feed their families throughout the year. Encouraging good financial practices, by providing easily accessible remunerated savings, and enabling the associated credit scoring to support formal lending, would be of great benefit to many cocoa farmers. These services are more likely to have high adoption levels if they are delivered by DFS, because of convenience, acceptance, and the current widespread usage of DFS by farmers for more basic transactions. There are several types of DFS that may be used to service cocoa farmers’ latent demand for financial services, for example by expanding the range of services offered by mobile money providers, possibly in parnership with banks or microfinance institutions. There is also an obvious opportunity for formal financial institutions to introduce agent banking services and suitable entry/level accounts to penetrate rural areas.