Digital Innovation for Building Liquidity for Agricultural Payments

Agri- innovation wallet, a promising solution to the problem, is a novel value chain financing option that links farmers, input suppliers, markets and the financial provider. It is an e-wallet platform that facilitates timely and efficient transactions. It targets the unbanked smallholder farmers in contract farming. The off-taker pays the farmer through the wallet, and the farmer saves money restricted for the purchase of agricultural innovations. Input suppliers are also paid through the system, and if need be, farmers access overdrafts for the purchase of agricultural inputs. Digital financial services lower transaction costs, making credit more available. A study was carried out to assess farmers’ willingness to save and borrow funds through the agri-innovation wallet for the purchase of agricultural inputs. Specifically, the study sought to test and monitor the proportion of farmers who would purchase innovations with funds in their agri-innovation wallet and the effect of the innovation on agricultural productivity and the farmers’ income.