In a country like Mali where weather conditions are unpredictable, and transaction costs are high, financing of the agricultural sector is considered a high-risk investment by financial institutions. Access to finance is a headache for farmers who have trouble getting a loan with the bank.
To solve this challenge, Doun Ka Fa, a Malian company that produces and distributes improved seeds and fertilizers saw the potential of combining digital technology with inputs provision by launching a mobile savings platform called Dôni-Dôni that means “little by little” in Bambara language. The platform offers farmers the opportunity to save small amounts of money via their mobile phone and to use these savings to buy inputs packages. Three different products are available, depending on the size of the farm: ¼ ha (EUR 50), ½ ha (EUR 100) and 1 ha (EUR 200). Inputs are provided via convenience kiosks and agronomic advice is offered via a phone helpdesk and on-the-ground extension officers.
July 18, 2019
A digital savings service revolutionizes the purchase of inputs in Mali
One of 2SCALE’s goals is to facilitate access to financial services for stakeholders (consumers, businesses, producer organizations, etc.) excluded from the traditional banking and financial system. 2SCALE estimated the Dôni Dôni model to be an alternative to accelerate and facilitate producers’ access (especially women) to inputs. Thus, in 2018, Dôni Dôni was introduced as a pilot in the SONAF partnership.
As a reminder, SONAF (Société Nama et Fils) is a local trading company for dry cereals (mainly yellow maize) based in Sikasso, Mali. The company records a lot of orders of yellow maize per year, ranging between 20 thousand and 30 thousand tons for the local market and for exports to Niger and Senegal and is involved in service provision to allow smallholder farmers to upgrade their production.
Malian farmers, especially women, are used to a savings practice via tontines: small saving groups. Therefore this innovation of Doun Ka Fa was well suited to their usual money management practices.
Only 2 months after its launch, more than 500 SONAF yellow maize farmers have registered for the service and 20 jobs have been created. Earlier on May 2019, the first producers received their packages of seeds, pesticides and mineral fertilizers.
One of the major strengths of the Dôni Dôni pilot lies in its combination of savings, seeds, fertilizers and agronomic advice. In addition the system is accessible to all and does not require a smartphone or Internet connection as it works with agents at the community level.
2SCALE supports initiatives such as Doûn Ka Fa's to innovate access to input credit for smallholder farmers. 2SCALE will ensure that the pilot is scaled up in a process of accelerating financial inclusion; and in the long term will see the possibility of including other services such as credit and insurance.
Fintech solutions like Dôni Dôni are interesting because they test new ways of offering financial services to smallholder farmers, argued Mariska Lammers, Policy Officer at the Dutch Ministry of Foreign Affairs
In March 2019, Mariska visited Sikasso, Mali and was very impressed with the 2SCALE team when she observed how everyone was involved in the decision making process of launching the savings pilot. Smallholder farmers, young and old, men and female, traders and input providers: everyone was invited to the consultation meeting to share their opinions and concerns. All this input was used to improve the savings product to best fit the end users’ needs. By the end of her visit, Mariska added: