Samuel Oladimeji is the MD/CEO of Fortis Mobile Money Limited. In this interview, he gives insight about the company’s project; Digital Finance for Rural Agricultural Development (DiFRAD), a digital agricultural initiative aimed at supporting smallholder farmers, especially in the rural and peri-urban communities in the North-central, North-east and North-west. Patience Ivie Ihejirika was there for LEADERSHIP Friday
Mobile Money is still struggling within the Nigerian business environment as consumers still confuse it with Mobile Banking, why do you think that is?
It has been really difficult for the Mobile Money Operators (MMOs) to craft a value proposition that will address the real needs of their target market, of course, we know that target markets might differ across MMOs but conceptually speaking, Mobile Money target market should be the base of the pyramid customers who are often in rural or peri-urban communities. This gap has made most MMOs to compete with the banks for the same customers, thereby unwittingly forcing Mobile Money nuancing with Mobile Banking. So far, MMOs have been losing this competition.
This looks a bit grim for the industry, is there a solution?
We at Fortis Mobile Money have always believed in going the whole nine yards. We believe it should be done the right way. We have refused to take the short cut to immediate but fleeting profit. Of course, we know that we can choose to drive value through bill payments and wallet-to-bank transfers but then any sort of aggressive marketing of e-channels by the commercial banks would leave MMOs scrambling for market share in an already saturated market. What we have done is that we have consolidated our Base of the Pyramid (BoP) proposition with innovative products that is tailored to the needs of the BoP customers. These products include Mobile Microfinance, Cash Transfer Package and recently DiFRAD.
What is DiFRAD?
DiFRAD is an acronym that means Digital Finance for Rural Agricultural Development. It is a product we developed last year for BoP segment. Particularly, this product was developed for smallholder farmers especially ones in the rural and peri-urban communities in the North-central, North-east and North-west. This is a digital Agricultural initiative. The product was inspired by a first-hand encounter with some farming communities in Niger and Cross River States, during some of our Cash Transfer Programs. We discovered that most of our beneficiaries are actually farmers who are constrained by lack of financial services and sometimes, know-how. We immediately started toying with the idea of filling their gap by bringing the banks to them and linking them with Agricultural developers. To achieve this, we had to partner with microfinance banks, agricultural developers and insurance companies as we worked on a suite of products that will cater for the extensive needs of the farmers. We rolled out the project last year but will aggressively expand it this year.
What is unique about this product? What does it offer differently?
It may seem to be a variation of what the banks are already offering; well, this product focuses on the value chain instead of isolated financing. We, in partnership with the microfinance banks and insurance companies finance the entire value chain starting from provision of farm land, through its clearing to its harvesting, processing and selling. It is our passion to end the marginalization of smallholder farmers by buyers and even nature by providing knowledge and guidance as they journey through the digital finance value chain. Our package even extends to the provision of inputs and we have consulted critical expertise to look at the proposition and ensure that we achieve the desired impact. This is why the whole process is mostly digital. Going digital guarantees a level of transparency and accountability. Digital process is easily auditable.
What is inside this suite of offerings?
The farmers will be exposed to micro-loans, micro-savings, micro-insurance and knowledge sharing. We have negotiated a most clement interest rate for the smallholder farmers and have sought partnership with reputable insurance companies. This suite of offering includes exposing the farmers to competitive buyers for their products and trying the best to shield them from exploitation. The idea is to provide competitive alternatives for the farmers throughout the value-chain. We want to ensure that the days of farmers begging for buyers for their produce or looking for much needed finance or due to the lack of knowledge or connection to navigate through the value chain is over.
What is the goal of this DiFRAD Project?
We see ourselves, Fortis Mobile Money, as a socially responsible organization, and DiFRAD, to us, is part of the ways we give back to the community. The overarching goal is to reduce the poverty level in rural communities seeing that their most recurrent occupation is farming. EFINA 2016 reports opined that financial exclusion level has grown in the rural areas. We see these rural areas as predominantly farmers. Smallholder farmers are actually the providers of about 85% of the locally produced food in the circulation in the markets. So ensuring that their capacity is optimized would actually impact the economy hugely as we continue to climb out of the recession.
Is this an improvement on Mobile Microfinance, the product you mentioned alongside DiFRAD?
They are actually different but that will take a whole new interview. But summarily put, Mobile Microfinance concentrates on delivering microfinance products through the mobile phones to financially underserved customers. Through this product, we take micro-finance to BoP customers.
What does Mobile Micro-finance really mean to small businesses?
We believe in the capacity of mobile micro-finance to instigate massive economic growth by making credit criteria and requirements less cumbersome. We modeled a system that would grant micro loans to small businesses through their mobile phones. We all know that mobile phones, due to its ubiquity, has a lot of potential to drive financial inclusion. Mobile penetration is high in Nigeria. It is over 80 percent, I believe. What Mobile Microfinance does is to leverage that penetration serve the underserved and reach the hard-to-reach segment of the market. This will save them the cost of accessing micro-finance services, save them the stress and does not really need collateral. We initially drove this business as a project between 2014-2016 and won the industry-coveted EFINA grant. Now, our ambition is to drive this as one of our products and our unique differentiator in the market.
Why is your organization always focusing on Base of the Pyramid (BoP) customers?
Yes we are focused on them and rightly so. Base of the Pyramid customers may not be paying customers right now but we are solidly projecting that with the right proposition, BoP customers who form the greater percentage of the Nigerian population will pay more. However, at this stage, we are not really focused on the reward. It is a social investment basically at this stage. It is a project that we expect the government to adopt when it is fully matured.
Do you mean that you require any sort of government assistance in deploying this project?
No. Maybe we require regulatory support. But at this stage, we have the capacity to roll out this project and run it. If there are NGOs or government agencies that want to partner with us or support us, we will look into their proposal and see if their ambition mirrors ours. Of course, financial support will help us drive the project deeper especially in the aspects of sensitization and advocacy, training, building capacity and marketing. That said, we have resolved to drive this with all our resources. Here at Fortis, we set ambitious targets and with our dedication, commitment and efficient work force, we meet those targets.
DiFRAD is about agriculture, what do you think this Administration is doing wrongly in terms of Agriculture?
I do not think that it is in my place to comment on the activities of the government. I believe the current administration is doing its best with regards to Agriculture. Commenting strictly as a citizen, we have seen the emergence of locally produced rice with admirable quality. We have witnessed demonstrated resolve of the government to properly incentivize Agriculture. While the government faces challenges especially with regards to reaching the BoP, smallholder farmers, I believe that the solution is Public Private Partnership. The privately owned organizations with the right organization and the right process has the opportunity to bridge the gap between the government and the rural farmers. At Fortis Mobile Money, we are fully investing in that proposition. We are focused on providing a platform that will enable government, NGOs and the financial institutions reach the smallholder farmers. Like I had earlier stated, when DiFRAD is mature, it will become a veritable platform to access rural, smallholder farmers and end their marginalization and exclusion.
This DiFRAD is predominantly for the grassroot population, how would they know about it?
This is where partnership with some agencies would come in; sensitization helps. We are using every medium available (Electronic, Print, media even House-to-House advocacy). We also have agents that will assist in creating awareness, training and deployment of this project. We have a team of very young, driven staff that take their job seriously. I daresay I have the youngest, yet most vibrant team playing in this space. So I do not expect the cascading of information to those that need it to become a challenge. We will do what needs to be done to ensure that information gets to the right people at the right time.
Will DiFRAD create more jobs?
Of course, we have started to expand our agency network. We have started increasing our staff strength. We have started engaging Agriculture developers that will craft viable and rewarding propositions. We estimate that at full operational scale, DiFRAD will add at least 6000 jobs with most of the jobs occurring in agency, agency network management and Agric-value chain. We at Fortis Mobile Money are not unaware of the rising spate of unemployment bedeviling the country and we are resolute in our commitment to provide a respite. Like I said, we believe that in time, federal government will see the merit in DiFRAD and run with it. We have arable land to ensure that Agriculture becomes a huge foreign exchange earner in Nigeria. We are gunning for a legacy. We want posterity to remember us as that Mobile Money Operator that catalyzes change, that innovates, that provides real solutions to societal posers.
You mentioned that your organization leverages the mobile penetration to drive financial inclusion, do you use only mobile phones or are there other solutions?
We are empowered to drive financial inclusion by providing safe, affordable, easy, fast and convenient financial services using the ubiquitous mobile phones. But that does not mean that we cannot deploy other viable solutions towards the achievement of this goal. So at Fortis we try to be innovative especially by marrying trending technological solutions to the challenges we encounter in the delivery of financial services. Last year, we deployed the ‘Tap and Pay’ Near Field Communications Technology specifically for the bottom of the pyramid customers who may not have the required knowledge to process transactions through the mobile phones. Just last year, we, again, completed the migration to the highest version of our MFS (Mobile Financial Services) Platform. The Platform is robust enough to accept many innovative plug-ins as we pursue our target of including one million Nigerians by 2020. Also in response to the challenges of network connectivity in most rural areas, we deployed an offline technological solution that can conduct seamless financial services in remote locations. It is our aim to be at the curve of innovation, not only providing solution but also the knowledge base for financial inclusion to thrive in Nigeria. I do believe that our IT team is the best in the industry.
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