African leaders urged to educate farmers on financial inclusion

The MasterCard Foundation Fund for Rural Prosperity has urged African leaders to focus on linking the agricultural sector with financial technology to improve the general welfare of poor farmers in rural areas.

The Foundation, in a survey pointed out that financial technology can increase access to financial services for many; rural smallholder families in Sub-Saharan Africa to move them into financial inclusion.

According them this will also expand access to appropriate financial facilities that are key in helping smallholder families to manage their daily risks and improve their well-being .

“Most smallholder families could earn more if they could grow more with a combination of the right skills and better agricultural equipment , seeds and fertilizer as well as a more developed and organized market place”, the report stated.

It pointed out that, currently, there are many challenges to expanding access to financial and other asset building services for smallholder families.

First, there is the physical distance between many small holders and financial service providers , making it difficult to reach farmers in a cost effective manner.

Secondly, many of the farmers were discovered to have limited or no interactions with financial institutions; which prevents them from seizing opportunities that might be available to them through greater financial inclusion.

Another observation pointed out was that Farm families have complex financial diaries which compel farmers to make wrong decisions on important things that affect their lives.

The report stated for example that farmers make wrong decisions on how to appropriately allocate scarce resources to meet competing demands, such as how much of their crops be sold and how to acquire additional non-agricultural sources of income.

Additionally, the report stated that many smallholder farmers in sub-saharan Africa are not linked to a cooperative group that could help them to facilitate access to financial services.

Source: citifmonline.com