Mastercard, Ecobank partner to digitize agric value chains in Africa
The initiative is estimated to empower millions of smallholder farmers through digital and financial inclusion.
Mastercard and Ecobank Group have announced their partnership to connect millions of smallholder farmers in Sub-Saharan Africa to Mastercard’s Farm Pass – a digital platform that makes it safer and easier for farmers to sell their produce at a fair price.
Under the partnership, Ecobank will extend the reach and impact of the Mastercard Farm Pass platform leveraging its Pan-African network of 33 countries.
Many smallholder farmers in Sub-Saharan Africa face several challenges. These include limited access to markets, working capital to finance activities or secure quality inputs, and relevant financial tools to pay and get paid efficiently. This has led to insecurity, inefficiencies, and a waste of resources and food, preventing farmers from running sustainable businesses.
According to a joint statement by Mastercard and Ecobank sent to Financial Nigeria, Farm Pass brings together various agri-sector stakeholders from the supply and demand sides, in one agricultural marketplace, amplifying the collective positive impact on farming communities. Smallholder farmers can sell their produce at a better price, access quality inputs and farming information, get paid and pay digitally and develop a financial profile that can unlock financing opportunities for working capital and inputs.
The statement cited a report by McKinsey and Company, which says more than 60% of the population of sub-Saharan Africa are smallholder farmers, with the agricultural sector contributing an estimated 23% of the continent’s GDP. Yet only 3% of the sector receives banking credit, limiting the farmers capacity to grow their business or mitigate poor harvest losses.
By integrating their businesses with payment systems, Farm Pass enables smallholder farmers to build a digital transaction record that can facilitate formal credit or other financial services from banks and other financial institutions, Mastercard and Ecobank said.
Since its launch in 2015, Mastercard Farm Pass has reached nearly one million smallholder farmers in Uganda, Tanzania, Kenya, and India, enabling them to command 25%-50% higher prices and increase harvest productivity. The statement said Farm Pass is part of Mastercard’s strategy to connect underserved communities to essential services through Community Pass, a shared interoperable digital platform that supports the company’s commitment to connect one billion people and 50 million small and micro businesses to the digital economy by 2025.
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