Payments for Rural Women in Agriculture

In November 2021, CGAP published a report about why financial solutions for women in rural and agriculture livelihoods is important, and strategies that can help address the challenges they face. While several financial solutions are discussed, solutions related to payments are particularly interesting because they are arguably the most urgent and the quickest win.

But who does CGAP mean when it talks about a Woman in Rural and Agriculture Livelihoods (WIRAL)? This is a woman who wears many hats. But essentially, she lives in a rural community, going through a set of defined life stages as a school leaver, then wife, mother, and matriarch. But importantly, she does many things for work – from running a small farm to feed her family and sell food, to having a micro enterprise, being a wage laborer, and caring for children, elders and her household – an activity that takes a chunk of time but is unpaid (most of her agricultural work is unpaid too). In short, she’s hardworking.

Why focus on rural women?

Now why does this woman matter?

She matters because her contributions affect households, communities, and yes, national economies. Up to 79% of economically-active WIRALs are involved in agriculture, and in Sub-Saharan Africa, they make up 40% of all agricultural labor!

Still, 56% of unbanked adults (mostly in rural areas) are women, and most products and services are never targeted directly at them – e.g., only 7% of extension services are specifically targeted at women. What’s more, they are more vulnerable to climate change than men because they only have limited access to resources which can make them adaptable and resilient.

Their challenges and constraints

CGAP’s research revealed that two high potential areas need to be addressed for Women in Rural and Agricultural livelihoods (WIRAL). The first is labor – because WIRAL earn less than men for the labor they provide. And the second is markets – because WIRAL have less access to information and markets than men, meaning they get paid lower prices. How can payments access and innovations help solve constraints for women across these two areas?

To answer this, we first need to know the specific issues driving the constraints around these areas for WIRAL?

Key constraints for labor

Globally, rural women are paid about 25% less than their male counterparts. Plus, they are more likely to have part time, seasonal jobs because they have less education especially due to societal expectations as caretakers so their families don’t invest as much in their education. As a result, rural girls are twice as likely to drop out of school than urban girls.

Women also have less access to tools that increase the productivity of their labor. For example, they have less access than men to training/extension services because these rarely align with particular needs of women around mobility, time restrictions due to home commitments, and their preference for female teachers who they (and their husbands) feel more comfortable around. They also have less disposable income than men to purchase tools and hired labor. When they do hire labor, they are seen as having less authority than men so they get less productivity in general from said labor. Also, women are more likely to get information to increase productivity from their husbands (so liable to inaccuracies and time-lags), while the husbands are more likely to get it from the main source (e.g., demonstrations, leaflets, radio announcements).

Key constraints for market access

Socio-cultural norms restrict many women from meeting traders and brokers (who are mostly men) to get timely information. Mobility and time constraints also hinder quick access to these personnel, as well as to farmer groups where this information is shared. A result of this can be seen in a Kenyan study which showed that 82% of women (compared to 61% of men) sold their milk at the farm gate, opting to not have to travel outside their homes to sell their produce despite that they would have gotten better prices if they had travelled to a market or collection center.

Rural women also have lower literacy and digital skills than men, meaning that their use of mobile phones (a popular source of market information) is limited. For example, study in Senegal revealed that 36% of women sampled (compared to 12% of men) said reading and writing was their biggest barrier to mobile internet access.

Opportunities for payments solutions to help close the gap

CGAP rightly notes that many of these constraints are driven by social norms that limit women’s time and resources given their primary caregiver status, and that limit their authority to manage labor in communities. As such, any solution needs to be bundled in such a way that these limitations are addressed, or at least mitigated.

CGAP discusses some of the following opportunities for payments specifically:

There is need to develop a mechanism that can connect female farmers who need to hire labor to female wage laborers who need labor opportunities right there in their rural communities. This mechanism needs to encompass finding local labor, ensuring safety at the workplace, easy payment of wages, and ensuring that the women have full control of those wages.

To have full control though, means that wages need to be paid digitally to an account or a wallet owned by the woman (and not her husband). Challenges discussed above limit this opportunity, which is why it is essential to pair this with financial literacy for both women (for digital skills) and the men in their households (to understand the overall benefit of a woman having control of her finances).

I’d suggest that the mechanism chosen needs to depend on agents (preferably women who are also based in and around the communities). These female agents could be trained to pass on in-person financial and digital literacy skills to WIRAL, while providing a labor matching service and a mobile wallet payment service like the M-Pesa model. Of course, feature phone and SMS compatibility will be necessary as these are lower entry digital tools and cheaper than smartphones. The agents can also help facilitate short-term loans to enable WIRAL pay wages, using their agricultural output as collateral. This network of agents and services will best be mobilized by a private sector fintech, but facilitating loans and literacy train-the-trainer sessions for agent may be areas of support from the public sector and community-focused banks.

CGAP does make a good point about the need for a community-based day care service which can help free up time for women to seek wage labor opportunities.

Meanwhile, this network of female agents can also be used to close the gaps in market access. Agents can get up-to-date market information, such as prices, and disseminate this to their women. The information can also be disseminated via SMS to the women’s feature phones.

CGAP mentions that off-take/collection points for produce can be expanded by supporting more female cooperatives, but perhaps these agents can help organize such expanded points as well to get it closer to their women who are facing mobility issues. Again, buyers can make payments remotely into the women’s mobile wallets.

I envisage the agents to be full-time (or just about), which also provides employment for rural women. Such models which leverage on local female networks have had proven success in other industries, e.g., Solar Sisters across several countries in Africa to sell affordable solar products, and Haqdarshak in India to assist with finding and applying to social welfare schemes.

Even as there are opportunities to bring local markets closer to women, CGAP recognizes that digital marketplaces that remotely match farmers with buyers and suppliers create a compelling value proposition for WIRAL. However, I suggest that such marketplaces can first be targeted at the more digitally aware WIRAL whose own successes may be used as cases to encourage others to upskill. Such a marketplace can also create a good use case for mobile money payments as a first option over cash. Once again, the agents can facilitate this, including helping with registrations and being a face-to-face channel to provide help.

The way forward

In conclusion, any provider of payments solutions for women in rural and agriculture livelihoods needs to consider add-ons or/and go-to-market approaches that address gender norms. CGAP does admit that more segmentation within WIRAL needs to happen as part of product development so that specific norms and constraints are addressed appropriately.

Overall though, combinations of financial literacy, digital literacy, a network of skilled female agents, a mobile money wallet solution, partnerships with cooperatives, collection centers and banks (e.g., for credit), a digital marketplace, and even community child care services need to be bundled in specific ways to serve segments of WIRAL.

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