patrick047
New Member
- Aug 15, 2022
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NAME: PATRICK CHRISTOPHER SAROTA
AGE: 23
NATIONALITY: TANZANIA
EDUCATION LEVEL: BSc. INTERNATIONAL ECONOMICS AND TRADE
CITY: DAR ES SALAAM, TANZANIA
MOBILE NUMBER: 0685678650
EMAIL: PATRICK.SAROTA@GMAIL.COM
Despite advancements in technology and innovation, many people in developing countries still lack access to essential financial services. The World Bank estimates that just over a billion adults world-wide are without a basic bank account – a large percentage of them being from African and Asian countries. This gives you an idea of the gap that exists between potential financial consumers world-wide and current fintech (financial technology).
If we focus our attention domestically, we find that a sizeable chunk of the Tanzanian population is detached from formal software-based financial services. According to the National Financial Inclusion Council (a faction of the Bank of Tanzania), 6.7% of the adult population in Tanzania are “using informal financial services” and 28% are “financially excluded”. Therefore, a total of 34.7% of the adult population are not fully utilizing the current financial software services available in Tanzania.
So how can we go about overcoming these financial challenges, especially from the perspective of small-scale farmers?
In this short piece, we’re going to focus on how we can expand the domain of financial inclusion to include small-scale farmers. How can we break down barriers that block small-scale farmers from fully utilizing financial software services? How would they benefit from this in the long run?
What is financial inclusion?
The term ‘financial inclusion’ refers to efforts taken to make financial products and services accessible and affordable to all individuals and businesses, regardless of their personal net worth or company size. Financial inclusion is imperative if small-scale farmers are going to realize their full productive potential. Having access to more sophisticated financial technology means better management of:
China’s model
A perfect model for financial inclusion is China. Over the past two decades, China has been striving to make large leaps in technological advancement and has achieved stellar improvements in infrastructure. By centralizing almost all of its financial services on a single digital platform (WeChat), it has allowed Chinese citizens in urban as well as rural areas to have easy access to monetary services; banking, health, insurance, travel, transportation, shopping and entertainment, and crypto. This has improved the standard of living for many mainland Chinese – especially those in the lower class – as it means more people have access to financial technology necessary for their day-to-day lives. Furthermore, this proliferates equality of opportunity, leveling the playing field for everyone to be better equipped with tools for financial management.
In hindsight, we can infer that China’s efforts for financial inclusion have paid huge dividends. Therefore, I think we should try to replicate China’s model for financial inclusion, if we are to have the same results for small-scale farmers and people in the lower class. This won’t happen overnight, of course, especially when you consider how long it took a country as efficient and as populated as China to achieve this level of financial inclusion. However, when you consider the fact that China has a population of more than a billion people and Tanzania has a population of only sixty-three million, maybe this is a model we can achieve in a fraction of the time it took China – all things considered.
Therefore, one approach we could take is by implementing a nation-wide, centralized monetary software system (similar to China’s WeChat), which will grant everyone (including small-scale farmers) access to essential, everyday monetary services. I say ‘everyone’ because it’s better to strive towards financial inclusion for the whole population so that everyone benefits. Why? The farming and agricultural industry isn’t isolated; it’s a node in a network with other industries, and they’re all connected. Therefore, implementing a blanket system of financial inclusion will spark a ripple effect throughout different industries – including agriculture. And when industries become more integrated, macro-economic productivity usually increases.
Digital application for small-scale farmers.
If we narrow our focus even further, we could also create a software application tailored for small-scale farmers, via institutions such as agricultural banks. This application should work like a digital marketplace where farmers and buyers can meet, interact and engage in trade, like Amazon or E-bay. Each farmer would have their own profile, product(s) on offer and rating. This would facilitate trade and overcome financial challenges such as pricing. Customers would be able to log on to the app, browse and find the best agricultural product and price to suit their needs. In addition, the rating system will promote goodwill between both farmer and consumer. This system or application should be convenient and easily accessible – for example, through smartphones.
Transparency.
Transparency is also key; information and news related to the industry should be published so that all small-scale farmers stay up-to-date and informed on any changes that are taking place, and how it’s affecting their industry. That is to say that financial inclusion should cover more than just monetary information, but qualitative information too. Keep in mind that most small-scale farmers are in rural areas where information isn’t as accessible as it is in urban areas, so giving them access to this information will proliferate equality of opportunity for small-scale farmers.
Cybersecurity and data protection.
Data and cybersecurity should also be taken into account when implementing new financial software technology. Small-scale farmers should be able to use this system with the knowledge and security that their data will be protected and not infringed upon. A legal framework should be put in place to cover the full range of financial consumer protection issues.
Educational awareness.
Finally, in order for all of this work, education is as tantamount as actually implementing this system of financial inclusion. Without promotion and education to small-scale farmers on how they can fully leverage financial technology, we won’t be able to reach as many potential financial consumers as we want. Small-scale farmers should be made aware of all financial technology that’s accessible to them, and how best to utilize them. Any new system that’s implemented (such as the one I’ve proposed above) should also be thoroughly communicated to small-scale farmers. This can be a lengthy and expensive process – however, looking at the bigger picture, it will bring huge dividends for Tanzania’s economy in the coming years. All in all, agriculture is vital for Tanzania’s growth and in order for us to ‘lift the tide’ in this industry, we have to support small-scale farmers as much as we can.
Research sources:
[1] National Financial Inclusion Council Report:
[2]World Bank Article on financial inclusion:
AGE: 23
NATIONALITY: TANZANIA
EDUCATION LEVEL: BSc. INTERNATIONAL ECONOMICS AND TRADE
CITY: DAR ES SALAAM, TANZANIA
MOBILE NUMBER: 0685678650
EMAIL: PATRICK.SAROTA@GMAIL.COM
HOW SOFTWARE TECHNOLOGY SHOULD BE LEVERAGED IN ORDER TO FACILITATE FINANCIAL INCLUSION AMONGST SMALL-SCALE FARMERS.
Despite advancements in technology and innovation, many people in developing countries still lack access to essential financial services. The World Bank estimates that just over a billion adults world-wide are without a basic bank account – a large percentage of them being from African and Asian countries. This gives you an idea of the gap that exists between potential financial consumers world-wide and current fintech (financial technology).
If we focus our attention domestically, we find that a sizeable chunk of the Tanzanian population is detached from formal software-based financial services. According to the National Financial Inclusion Council (a faction of the Bank of Tanzania), 6.7% of the adult population in Tanzania are “using informal financial services” and 28% are “financially excluded”. Therefore, a total of 34.7% of the adult population are not fully utilizing the current financial software services available in Tanzania.
So how can we go about overcoming these financial challenges, especially from the perspective of small-scale farmers?
In this short piece, we’re going to focus on how we can expand the domain of financial inclusion to include small-scale farmers. How can we break down barriers that block small-scale farmers from fully utilizing financial software services? How would they benefit from this in the long run?
What is financial inclusion?
The term ‘financial inclusion’ refers to efforts taken to make financial products and services accessible and affordable to all individuals and businesses, regardless of their personal net worth or company size. Financial inclusion is imperative if small-scale farmers are going to realize their full productive potential. Having access to more sophisticated financial technology means better management of:
- Credit
- Savings
- Insurance
- Risk management
China’s model
A perfect model for financial inclusion is China. Over the past two decades, China has been striving to make large leaps in technological advancement and has achieved stellar improvements in infrastructure. By centralizing almost all of its financial services on a single digital platform (WeChat), it has allowed Chinese citizens in urban as well as rural areas to have easy access to monetary services; banking, health, insurance, travel, transportation, shopping and entertainment, and crypto. This has improved the standard of living for many mainland Chinese – especially those in the lower class – as it means more people have access to financial technology necessary for their day-to-day lives. Furthermore, this proliferates equality of opportunity, leveling the playing field for everyone to be better equipped with tools for financial management.
In hindsight, we can infer that China’s efforts for financial inclusion have paid huge dividends. Therefore, I think we should try to replicate China’s model for financial inclusion, if we are to have the same results for small-scale farmers and people in the lower class. This won’t happen overnight, of course, especially when you consider how long it took a country as efficient and as populated as China to achieve this level of financial inclusion. However, when you consider the fact that China has a population of more than a billion people and Tanzania has a population of only sixty-three million, maybe this is a model we can achieve in a fraction of the time it took China – all things considered.
Therefore, one approach we could take is by implementing a nation-wide, centralized monetary software system (similar to China’s WeChat), which will grant everyone (including small-scale farmers) access to essential, everyday monetary services. I say ‘everyone’ because it’s better to strive towards financial inclusion for the whole population so that everyone benefits. Why? The farming and agricultural industry isn’t isolated; it’s a node in a network with other industries, and they’re all connected. Therefore, implementing a blanket system of financial inclusion will spark a ripple effect throughout different industries – including agriculture. And when industries become more integrated, macro-economic productivity usually increases.
Digital application for small-scale farmers.
If we narrow our focus even further, we could also create a software application tailored for small-scale farmers, via institutions such as agricultural banks. This application should work like a digital marketplace where farmers and buyers can meet, interact and engage in trade, like Amazon or E-bay. Each farmer would have their own profile, product(s) on offer and rating. This would facilitate trade and overcome financial challenges such as pricing. Customers would be able to log on to the app, browse and find the best agricultural product and price to suit their needs. In addition, the rating system will promote goodwill between both farmer and consumer. This system or application should be convenient and easily accessible – for example, through smartphones.
Transparency.
Transparency is also key; information and news related to the industry should be published so that all small-scale farmers stay up-to-date and informed on any changes that are taking place, and how it’s affecting their industry. That is to say that financial inclusion should cover more than just monetary information, but qualitative information too. Keep in mind that most small-scale farmers are in rural areas where information isn’t as accessible as it is in urban areas, so giving them access to this information will proliferate equality of opportunity for small-scale farmers.
Cybersecurity and data protection.
Data and cybersecurity should also be taken into account when implementing new financial software technology. Small-scale farmers should be able to use this system with the knowledge and security that their data will be protected and not infringed upon. A legal framework should be put in place to cover the full range of financial consumer protection issues.
Educational awareness.
Finally, in order for all of this work, education is as tantamount as actually implementing this system of financial inclusion. Without promotion and education to small-scale farmers on how they can fully leverage financial technology, we won’t be able to reach as many potential financial consumers as we want. Small-scale farmers should be made aware of all financial technology that’s accessible to them, and how best to utilize them. Any new system that’s implemented (such as the one I’ve proposed above) should also be thoroughly communicated to small-scale farmers. This can be a lengthy and expensive process – however, looking at the bigger picture, it will bring huge dividends for Tanzania’s economy in the coming years. All in all, agriculture is vital for Tanzania’s growth and in order for us to ‘lift the tide’ in this industry, we have to support small-scale farmers as much as we can.
Research sources:
[1] National Financial Inclusion Council Report:
[2]World Bank Article on financial inclusion:
Overview
Half of the adults around the world – around 2.5 billion people – don’t use formal financial services, and 75% of poor people are unbanked because of costs, travel distances and burdensome requirements involved in opening a financial account. While the poor don’t have the same access to...
www.worldbank.org
