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Mobile Applications for Rural Development - PowerPoint PPT Presentation

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Mobile Applications for Rural Development. Presented by:. Steve Esselaar. Introduction. 92 mobile applications were studied from Asia, Africa & Latin America 15 in-depth case studies were conducted in Kenya, Sri Lanka & Philippines Key Messages:

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Mobile Applications for Rural Development

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Presentation Transcript
  • 92 mobile applications were studied from Asia, Africa & Latin America
  • 15 in-depth case studies were conducted in Kenya, Sri Lanka & Philippines
  • Key Messages:
    • Standard phones (non-smartphones) will continue to dominate rural areas for the medium term (2015)
    • There is a lack of appropriate funding, especially after the pilot phase
    • Mobile money (or an equivalent) is a pre-requisite for commercial apps
    • Rapidly evolving sector
    • Government m-apps lack clear objectives
    • Common platform would increase efficiency and reduce the cost of customer acquisition
results chain
Results Chain

Better prices, more market-oriented produce

Market information

Better access to information

Better disaster/risk management

Climate, disease information

Increased income for smallholder farmers

Agricultural techniques and good practices

Better access to rural extension and advisory services

Higher yield production

Accurate assessment of pasture health

Extension services

Reduced transaction, logistical and distributional costs for input suppliers

Improved market linkages and distribution

Linking farmers, supplier and buyers directly

Minimize exploitation by middlemen

Reducing inefficiencies in the distribution chain (e.g. transporting goods to market)

Improved traceability and quality standards for buyers

Greater efficiency and predictability

Better recording, accounting & traceability

Reduced admin costs

Reduced fraud

(Better) access to finance


New opportunities for financial institutions

Higher yield, more diversified production, less losses


Payment method

lessons learnt selection
Lessons learnt (selection)


Development impact

  • Supply chain automation improvements (mobile & ICT) in specific market segments lead to reduced transactional and logistical costs
  • These benefits, as well as greater accuracy of farm gate measurements impact farmer (income), buyer (cost reduction) & market productivity for the segment.

Ecosystem players

Business Model

  • This model has relied on one major player (e.g., national scale buyer) financing an application that is deemed good for the buyer dominated ecosystem
  • Also improved farmer credit worthiness and can indirectly draw banks to the value chain.
  • Applications focused on meeting/ automating specific customer needs without including full value chain can grow at a rate that matches need and capabilities.
lessons learnt selection1
Lessons learnt (selection)


Development impact

  • Better access to market information leads to increased income.
  • Linking suppliers and buyers directly, cutting out the middlemen, removing information asymmetry leads to increased income

Ecosystem players

  • Local content on market prices created by local staff in market resource centres (MRCs) is responsible for KACE’s value creation as well as supporting their virtual market using broadcast radio and linkages between buyer & seller
  • Platforms, such as Ovi Life Tools (OLT), could ensure wider availability of applications and therefore scalability
  • Partnerships with MNOs are vital

Business model

  • Affordability can limit the entry of smallholder farmers, thus planned multi-level services are effective (market info at no cost, leading to value added market linkage assistance at a price can migrate beneficial participation)
lessons learnt selection2
Lessons learnt (selection)


Development impact

  • Small scale farm input insurance can be transacted using mobile phones, and transaction cost can be reduced to cost of an SMS
  • Increased farmers’ security against crop losses, and more diversified crop types and higher yield
  • Potential to protect rural inhabitants against other forms of unexpected life events

Ecosystem players

Business Model

  • Identifying farmers and their crop types and farming methods (such as inputs) means that other extension services can be offered
  • Higher quality inputs, such as drought resistant crops, could potentially reduce potential losses
  • Index based automatic payout insurance model
  • Good extension services, such as training, are essential in order to educate the market about a product or new technique that could carry risk, to increase usage and adoption
  • A win-win result in the early stage of implementation creates trust
lessons learnt selection3
Lessons learnt (selection)


Development impact

  • Targeted relevant information, like expert advice, can result in increased production

Ecosystem players

  • Government information on productivity and sector issues combined with ICT implementing resources can generate practical m-ARD concepts

Business model

Farmers’ Texting Service (FTC)

  • Clear objectives (such as increasing milk production by 30 percent) are correlated with apps that graduate from the pilot/ concept stage.
  • Main challenge is formulation of plan to migrate from Government led to effective PPP
business models costs
Business models - Costs

Typical costs for commercial apps

KACE: Costs of expansion

  • Typical costs for non-commercial apps:
  • Similar to commercial m-apps, in that the cost is relatively low
  • Non-commercial m-apps major challenge is moving from information only to other value-add services (such as transactions)
business models revenues
Business models - Revenues
  • 29 percent of all the m-apps surveyed receive some form of operating revenues from normal business activities through the share of SMS, transaction fees or membership fees
  • 71 percent of m-apps are all partially or completely dependent upon external financing, such as government or donor funding, for continuing operations as they do not have sufficient operating revenues to sustain their operations
  • Cost analysis seems to indicate that, so long as investment funding could be secured, pricing for viability does have possibilities
  • Most common revenue stream for information services is a share of SMS revenue
  • Share SMS: Application owners typically receive only a small portion of SMS revenues, ranging from zero to approximately 18 percent ($0.016 per message)
  • Transactions fee: Both famers and buyers pay for services to expedite produce contracting, collection & delivery; payment, tracking and reporting on produce collection etc. Farmers have demonstrated willingness to pay a fee of 5% in various cases
  • Membership: One-time fee that provides farmers access to network of partners & basic services.
  • Other: Operating expenses covered by donor/Funder/Government
  • Lack of appropriate funding is one of the major findings
  • Including some of the relatively successful cases such as Drumnet, KACE, GrundfosLifelink, KilimoSalama, Farmer’s Texting Center, and 1919
  • The financing gap is particularly acute between the Pilot stage and Stage 1 (scalability); and during the transition from donor funded (Pilot stage) to either commercially funded or government funded
  • The findings also indicate that while there is sufficient funding at the start-up stage, donors, who provide the most funds at this stage, are not operationally suited towards providing long term funding, particularly as m-apps attempt to scale up
  • Key challenges for commercial m-apps:
  • Lack of firm clustering
  • Lack of access to financing
  • Lack of healthy ecosystem
  • Key challenges for non-commercial m-apps:
  • Lack of clear objectives
  • Difficulty in assessing costs vs. benefits
assisting development impact
Assisting Development impact


Areas of intervention in the m-app environment

Enabling: Policy & regulation


Hyperlocal (yet challenging)


thank you

Thank you

Steve Esselaar