AGFAX: March 2010
Food and inputs via mobile phone
Mike Quinn: General Manager, Mobile Transactions Zambia Ltd
Summary:
Distributing food aid or farm inputs is normally an expensive and lengthy process. In addition, it doesn't usually support local suppliers and businesses. But in Zambia a different approach is being trialled by several organisations, including the World Food Programme. Instead of being given food, beneficiaries receive an electronic voucher, in the form of a scratchcard - similar to one used for topping up mobile phone credit. By taking the card to a local agent, they are able to redeem it for the food or other input that they are entitled to. Mike Quinn of the Mobile Transactions company, which has created the system, explains more to Chris Kakunta.
Suggested introduction:
What do you use your mobile phone for? Buying and selling? Arranging meetings? Or just for keeping in touch with friends and family? The spread of mobile phone networks have revolutionised communication in Africa in particular. And as phone networks spread, so do other services.
In Zambia, development and relief agencies are now using mobile phones to distribute subsidies and aid. Instead of waiting for a truck to arrive with food or other goods, some organisations are now distributing electronic vouchers, or e-vouchers, in the form of scratchcards. Each card has a unique number which allows the beneficiary to claim the donation, such as food or farming inputs, from an agent, usually a local shopkeeper.
The service is being run by the Mobile Transactions company. Chris Kakunta asks General Manager Mike Quinn to explain more about how it works.
Tape in:
Electronic voucher is a way for organisations...
Tape out:
...Thank you very much Chris.
Closing Announcement:
Mike Quinn and Chris Kakunta on how organisations in Zambia are distributing farm inputs and food through mobile phones.
Making the most of it:
What other innovative ways do your farming listeners use their mobile phones in agriculture? You could have a competition - How my mobile phone has changed my life - and get listeners to send in their stories. A prize for the best one, or the most innovative use of a phone?
Further information:
Mobile Transactions Zambia Ltd website: www.mtzl.net/info/index.php?op...
Transcript
Quinn
Electronic voucher is a way for organisations to deliver subsidies directly to beneficiaries without having to move cash. The way it works is, we at Mobile Transactions work with a client organisation. For example we are working for the World Food Programme and the Conservation Farming Unit right now. And the client organisation will then issue a scratch card to a project beneficiary. So maybe I will just take the Conservation Farming Unit as an example. CFU will deliver scratch cards just like Zain or MTN scratch cards. The farmer that receives the scratch card will then take the card to a mobile transaction agent in the area, that we have trained and set up with a mobile phone as a point of sale device. The agent will scratch the scratch card and enter in the PIN number on Mobile Transaction system and the system will check first of all whether that individual is a beneficiary of the project. After that it would redeem the voucher and the agent would give the person product. In this case in the Conservation Farming Unit it is agricultural inputs such as seed and farming tools.
Kakunta
Exactly what are you trying to address?
Quinn
We are trying to really support local private sector development. With a scratch card really it drives people to local businesses and local shops. So instead of the Conservation Farming Unit having to distribute seeds and their farming tools directly themselves and bypassing the private sector, they can issue a scratch card and then that scratch card is redeemed at a local business in their community. The organisation, our client organisation, is able to monitor which vouchers have been redeemed, where they have been redeemed, for what products. So it improves the efficiency and effectiveness of aid is really what we are talking about.
Kakunta
You have just mentioned that you are currently working with the World Food Programme and the Conservation Farming Unit. I believe there are quite a few challenges that you are facing in implementing the e-voucher system? And if there are challenges, how are you trying to overcome them?
Quinn
One of the biggest lessons we have learned is that as Mobile Transactions we provide a system and a technology platform to a client organisation but the difficulties are always going to come in implementation on the ground. So this is selecting the right agents, making sure the agents are properly trained, making the field staff of our partner, client are properly trained. So we now play a much more active role on the ground working with World Food Programme staff or Conservation Farming Unit staff to make sure that the agents are 100% ready to redeem vouchers, they know what they are doing, they are well supported. That is a function that Mobile Transaction plays.
Kakunta
How do you deal with situations where the beneficiary is not able to read and write? How are they able to manage a thing like password and so on?
Quinn
It is a very good question. All they need to do is to present their scratch card to a local agent and then enter in the PIN number on that scratch card to the agent's phone. So if they cannot do it directly then the agent can do it for them or they can have somebody read it out to the agent. But we actually have not come across any of those problems yet with difficulties redeeming vouchers.
Kakunta
Do you think this system actually is one way of really addressing the needs of the poor?
Quinn
Absolutely, I think you have to segment almost who the poor are. So in one case our agents could be very small shops and local businesses. What the voucher does for them is it provides them with a guaranteed market and instant payment for product. So in the World Food programme case the agent has to bring in a mealie-meal, cooking oil, sugar and salt but they have a guaranteed market to sell that and they do not have to wait for two or three weeks to get payment for that. So as soon as they redeem the voucher their bank account, or their Mobile Transaction account rather, is instantly credited and they can move that money into their bank account at anytime. In terms of the beneficiary it reduces their cost and their time of having to wait for and maybe line up at a distribution point to receive a subsidy from an organisation. For example the World Food Programme would traditionally bring a truck full of food and then have a food distribution point and then somebody may have to wait all day there and walk from a very far distance. Now they get a scratch card that they can redeem when they want it at an agent that they choose because there will be multiple points of redemption in their community.
Kakunta
So you are actually empowering the local persons on the ground as well as also helping the poor out there?
Quinn
Yes that is absolutely correct.
Kakunta
You are currently, basically working with about three organisations. Do you think in the near future you would like to scale up this particular programme?
Quinn
We are doing it right now. So I think the Conservation Farming Unit was the first voucher project. We successfully redeemed over 13,000 vouchers. We are working with World Food Programme. That programme is live right now to do 20,000 vouchers and I know they are very eager to scale up on a countrywide programme that we hope to roll out with them. And I think we are looking at even expanding in other markets regionally.
Kakunta
It has been a pleasure talking to you Mike.
Quinn
Thank you very much Chris. End of track
