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Financial inclusion is the availability and equality of opportunities to access financial services.

The biggest challenge that faces farmers is financing related problems, especially in the current economic crisis, Sudan is going through.

The technology incubation program offers an up to 90,000 US dollars finance on the warranty of African Development Bank. Also, the African Development Bank works towards achieving gender equality thus it encourages young females to apply for the programme.


Digitization of financial inclusion for farmers 

40% of people who are carrying mobile phones in Sudan today, have access to internet service.

Financial inclusion can simply be defined by providing financial services to all people in a community with the lowest costs. Financial inclusion will reduce poverty rates and increase standards of living.

The latest reports showed that only 10%-15% of the population has access to financial services.

Unserved farmers don’t have bank accounts as a result they don’t have access to finance.


Telecommunication companies role in financial inclusion 

In Sudan telecommunication companies entered in partnerships with some banks to provide financial services through mobile phones.

There are other models used around Africa that are very successful, as an example, there’s Mpesa in Kenya, one of the most successful services.

Those services are delivered through the lowest technologies available by USSD technology, so it isn’t necessary to have a smartphone or access to an internet connection.


Possible benefits of digital financial services 

  • This technology will help financial institutions in giving loans to farmers because it records all previous transactions, so financial institutions or banks will have statements that it can go back to, in order to make sure of the farmer’s ability to pay back.
  • A safe place for farmers to save their surplus money.
  • Pay electricity and water bills, as well as education fees and all other fees.
  • Insurance technology that allows farmers to pay all the insurance costs through mobile money services.
  • Ramekin services.

Most importantly, digital financial services will help in increasing financial inclusion, among farmers and poor people.


Banking model available for farmers

Financial literacy is one of the challenges that stand in the face of financial inclusion.

Important frameworks to focus

  1. Regulatory or legal framework.
  2. Financial and administrative framework.
  3. Technical framework.

Examples of social inclusion in African countries

  • Rwanda has 12 million people, their financial inclusion coverage was 75% in 2017. In the period of 2018 to 2020, they reached  90%, they have only 8 banks and about 500 MFIs.
  • The financial inclusion coverage in Kenya in 2018 was 82%, 26-27 banks, while Kenya’s population is about 40 million people, and they have 200 MFIs and SACCOs.
  • Ghana has 16-17 banks and their financial inclusion coverage is 68%, with 137 MFIs and SACCOs.
  • Financial inclusion coverage in Ethiopia is more than 75%, and their population is more than 120 million people, with 1 telecommunication company, and more than 200 MFIs and SACCOs. They also have more than 83,000 registered SMEs.
  • In Sudan, our population is almost 40 million people, with 40 MFIs only.

Most agricultural activities in Sudan are held in rural areas, where farmers are using traditional methods in growing, harvesting, and marketing their crops. They don’t trust modern-day technologies, so it’s very important to build their knowledge in order to gain their trust then include them financially. Moreover, Sudan doesn’t have a regulated MSMEs sector and this threatens the MSMEs sector because it’s subject to the same laws as large companies.

Before financial inclusion, comes social inclusion, the farmers need to feel included in the community, and in the healthcare system.


Informal financing methods in Sudan

The challenges that face farmers to get formal financing:

  1. Accessibility.
  2. Culture and historical experiences.

In conclusion, there’s no trust and communication between farmers and banks. The model that is currently used in Sudan is (Al-shail) which can be summarised as follows.

  • A trader gives the farmer the amount of money he needs to grow his crop.
  • In return, the farmer will pay the trader back by giving him part of his crop after he harvests his crop.

36% of Sudan’s GDP is generated from agricultural activities, while the governmental expenditure in the same sector is only 4%, we need to increase the expenditure in agricultural activities in order to raise it’s a contribution to the GDP and benefit the overall economy.

We need new financial products and innovations to encourage financial institutions to leverage their finance to the agricultural sector.


Three important points to look at before starting any digital financial services project

  1. Farmer’s profile.
  2. Ecosystem.
  3. Private sector’s role.