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Mobile Applications for Rural Development. The World Bank 20 January 2011 Andrew Dymond & Steve Esselaar. What is a Mobile Application?.

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mobile applications for rural development

Mobile Applications for Rural Development

The World Bank

20 January 2011

Andrew Dymond & Steve Esselaar

what is a mobile application
What is a Mobile Application?
  • Use of a mobile telephone beyond purely consumer voice and text for collection or transmission of data for a particular commercial or administrative purpose
  • Overwhelming majority of applications (“apps”) today are for Entertainment and Lifestyle purposes – e.g., iPhone apps
  • This study looks at mobile use for economic and governmental purposes related to rural development, including:
    • Agricultural pricing information
    • Virtual market place transactions
    • Value chain automation
      • Tracing product collection & distribution
    • Cashless payments
    • Agricultural extension services
    • Information collection & dissemination
    • Distribution of micro-insurance

Pickup scheduled for 27 March 2009

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contents of presentation
Contents of presentation
  • Overview of the m-applications in Rural Development for three study countries
    • Kenya, Philippines, Sri Lanka
  • Categorization framework
    • Each country with a different blend of m-app interventions
  • Example of most interesting cases
    • Objectives & Concept
    • Business Model, Outcome Benefits, & Challenges
  • Business Models & Funding
    • Methodology used for the study
    • Categories
    • M-App Funding & PPP Planning Gaps
the rural m apps interventions
The Rural m-apps interventions




Market participation & linkages

  • Improved economic participation & income
  • Information, insurance & finance
  • Buy-sell trade without exploitation
  • Hands-on linkage assistance

Agricultural extension

  • Access and provision of agricultural information
  • Support and promotion of better farming methods

Distance education

  • Improved education results
  • Greater access & participation in education

Project M.I.N.D


  • Access to government information
  • Amalgamation of grassroots information online for purpose of effective response
  • Finance and insurance on fair and equal terms which overcome rural challenges
  • Ease of payment & receipt
  • Protection from impact of climatic disaster
  • Access to insurance for small farmers

Rural Finance, Infrastructure & ICT


  • Clean water at affordable price & for irrigation purposes
overview of kulimo salama
Overview of KulimoSalama
  • Create, demonstrate and launch an affordable index-linked input and crop insurance product for smallholder farmers that insurance companies are able to offer and administer at manageable cost
  • Reduction of risk for smallholder farmers to enable them to adopt more advanced farming techniques and thus increase their income


  • Mobiles used in sales of farm inputs, insurance policies & payouts
  • Mobile linked sales automation between farmer, agent and Insurance Co.
  • SMS sent to farmer for initial contract confirmations
  • M-Pesaused for input and insurance policy purchases
  • M-Pesa automatic pay-outs triggered by weather station report
  • Distribution model can be replicated & integrated with other applications, added to all value-chain systems to improve the security and credit-worthiness of farmers


kilimo salama 2
KilimoSalama (2)

Business model

Revenue (Cost of insurance)

  • Farmer pays 5% of input cost
  • Input company pays 5%

Product System Costs

  • Investments by Syngenta – server, weather stations, information services
  • Safaricom data transmission discount
  • IFC $2.5 m farmer education considered an essential element
  • User benefits – higher yield growing for smallholders facilitated by insurance, could eventually double farmer incomes
  • 1st Year Payouts gave credibility
  • Currently few suitable weather stations
  • High training & extension costs necessary to reduce farmer risks
  • Could backfire on farmers without critical information and education
  • Smallholder suspicion of insurance
  • Cost of information & education/extension services
  • Cost of insurance without premium sharing

Outputs / Benefits



drumnet kenya
DrumNet Kenya
  • Reduce dependence on brokers in the Kenyan Agriculture Sector
  • Reduce logistical transaction costs
  • Increase trust between value-chain players & reduce risks
  • Create performance quality standards
  • Improve reliability/quality of transport services
  • Bring traceability in the commodity markets


  • ICT & mobiles used in the finance, production, delivery & payment process in the agricultural supply chain
  • Pilots in the horticultural sector and the oilseed sector
  • Future target is all significant agricultural production segments







drumnet 2
Drumnet (2)

Business model

  • Revenues – Membership fee, linkage fee, transaction fee
  • Upscaling strategy - Form company (done), Develop new IT platform, Automate one segment Value Chain at a time
  • Investment - Need $1 million on commercial basis for IT platform, staff complement and first 2 years operations
  • Projections show self-sufficiency from Year 2 onwards based on the experience of the pilot projects and expectations in Business Plan
  • Pilot increased growers’ incomes by 32% and integrated market segment.
  • Targeting large scale roll-out to many sectors

Outcome / Benefits


  • Numerous mobile applications coming into the market dilute opportunity
  • Long process of engaging partners, negotiations could take long periods before finalized.


overview of e dairy
Overview of e-Dairy
  • Extension service targeting 30% increase in milk production through higher pregnancy rates in cows, by providing access to veterinarian services
  • There are 560,000 milk cows in Sri Lanka. Out of these at a given time only 45 % are milk-producing animals while 55% are dry. The application targets increased production through provision of information and timely vet services via ICT and mobile.


  • Pilot initiated in the Dambadeniya district in 2009
  • Enables dairy farmers to access information via touch screen computers and request veterinarian services via SMS
  • Uses pre-assigned codes to order vet services
  • Vet gets in touch with farmer directly
  • Build database to support farmers with dairy decisions


e dairy 2
e-Dairy (2)

Business model

  • Revenues – None
  • Cost of operations: $6k per year
  • Farmers pay cost of SMS (directly to MNO)
  • Upscalingstrategy – Expand to other localities
  • Upscale financing – $1.2 million (already allocated from USAID)
  • Market penetration
    • Currently 300 farmers signed up
    • No information on benefits to date, though the project has high expectations of improved techniques through ICT empowerment of the farmers

Outcome / Benefits

  • Expectation that service is free, though current research suggests that farmers may be willing to pay for the service
  • Reach is limited by connectivity in rural areas



the philippines cases
The Philippines cases

Project M.I.N.D

basic rural development themes
Basic rural development themes
  • Common theme of all applications is “Access’
    • Information
    • Markets
    • Resources
    • Job Opportunities
    • Governance
  • Some objectives are cross-cutting between sub-sectors
    • E.g., Access to Information is common, but impact deepens when timely expert assistance, education, finance, etc. is applied
  • Supply chain management in the agricultural sector has far-reaching impact
    • Market information, linkages, micro-insurance, education & extension are all related to supply chain operation
    • Efficient supply chains are key for the economy to be globally competitive
    • Benefits create spin-offs that stimulate social and economic factors (employment generation, added value, decreases of product losses, reduced fraud losses, etc.).
  • Financial component can also leverage other outcomes/benefits
    • E.g., access to credit, safe & rapid payment, insurance, can have transformative effect, creating steps in development towards independence and empowerment

Agric. sector apps link many players

Objective – improved, equal & integrated access between key players

Lack of knowledge of arable surface area & potential productivity

Need to master improved cultivation techniques

Little or no learning &/or sharing of best practices

No access to credit or insurance

Limited knowledge of weather expectations, impact & risks

No access to certified seeds, fertilizers, inputs and services

Market misinformation

Vulnerable to exploitation by middlemen

Suppliers, banks & ins.

Poor knowledge of farmers’ needs for inputs and services

Costly and complicated distribution to small farmers

Means of payments unsuitable to farmers

Systematic losses from small farm customers

Smallholder Farmers

Buyers & exporters

No effective means of communication with farmers

Poor knowledge of grower activities

High costs/low performance management

Low profitability

Vulnerable to speculation

stages maturity cycle
Stages - maturity cycle

Peak of Inflated Expectations:

71% of mobile apps reliant on

gov’t or donor funding

Plateau of Productivity:

15% of apps are sustainable


Slope of Enlightenment:

49% of apps in the

commercialization phase

Trough of Disillusionment:

37% of apps don’t go past

the pilot stage

Technology Trigger = mobile penetration


potential funding models
Potential Funding models





PPP: Service Contract (outsourcing)

  • Fee from government for non-core service

PPP: Management Contract

  • Fee plus performance-based incentive

PPP: BOT (without concession)

  • The government pays service provider on a unit basis

PPP: BOT (concession) , license or Lease

  • All revenues from service provision to private partner

PPP:OBA &/or other competitive vehicles

  • Government provides Subsidy for Private Participation

Grant matching

  • Donor / government matches funding raised privately

Donor support or Challenge Award

  • Donor funding or competitive award


  • Corporate social responsibility allocation of funds

Social Networking related sourcing

  • E.g., 1% Club and similar innovative vehicles


Equity matching

  • VCs match funds that the business is able to raise

Funding & expertise & networking

  • VCs supplies some funding, time/expertise & networks

Expertise & networking

  • No explicit funding, expertise & networking committed



  • Business able to go to banks for funds


  • IPO in order to access additional funds
ideal funding ecosystem commercial
Ideal Funding ecosystem – Commercial

Apex Fund

  • Observed gap - There is a need for financing sources that link the donor / start-up phase to the commercial world, which is less “intrusive” & faster
    • The mobile apps world requires agility and flexibility
    • Venture capital style rather than donor style


Debt / IPO / Access to capital markets


VC Funding

Small VC Fund

Small VC Fund

Small VC Fund

Small VC Fund



Donor /Gov’t funds

Commercial skills & expertise, together with funding

Continued Donor/Gov’t or PPP funding


Observed Gap Optimal Plan for success


PPP m-App Planning GapSuccess must be built on the following steps which are common to other PPP type infrastructure projects
  • Objectives
    • Set Government administrative deliverables – e.g. Information, Complaints & Feedback, Opinion, Disaster response
    • Set other objectives – e.g., eDairy 30% increase in milk production; Farmers’ Texting Service increase rice variety production
  • Financing Design
    • Set a model for private sector participation and design the parameters – how much to be invested, terms of relationship
      • BTO, BOT, Lease, etc.
      • OBA
  • Operational Design
    • Set targets & KPIs
    • Prepare RFP documents
    • Award contract
    • Monitor results

Thank you