For farmers, the app also created a quick way to apply for fertilizers and mobile money advances, to view balances and available money, and to repay mobile money advances during coffee deliveries. With mobile money loans, farmers can also bridge cash needs; instead of feeling forced to sell unripe cherry off the trees when they’re in need of cash, they can wait until cherries are ripe and they’ll receive the best prices.
The program has been enormously successful, with farmers seeing dramatic improvements even after the first year. For example, Naggayi Florence, a mother of six who shoulders her household expenses alone, had trouble paying school fees, since they didn’t coincide with her single harvest payments and day-to-day expenses relied on the full payment. To cope, she took out loans with village traders, based on low, fixed per-kilo prices for her coffee. Once she had access to the NKG BLOOM mobile money credit line, she could immediately access funds when she needed them, and she could sell her coffee at a fair price. “It has never failed me,” she says.
“In Uganda, we learned that it’s possible for us to finance even the smallest of smallholders directly through a combination of technology like mobile money, an IT solution specially designed to support operations in the field and microfinance methodologies that have been developed in the past by Grameen Bank and Procredit Bank,” says Catalina Eikenberg, head of NKG’s Sustainable Business Unit and a main force behind NKG BLOOM.
“We also learned that through the provision of services to farmers, especially financial services, it’s possible for our export companies to significantly increase the volumes sourced from those farmers. In Uganda, we saw farmers go from selling 10 percent of their coffee to us to 70 percent, and this encouraged us to pursue NKG BLOOM in other geographies.”
Initially, the Ibero program began by working with 80 farmer groups; when it reached the point of wanting to expand, it found there weren’t many other groups in place, though there were still more farmers they weren’t reaching. So, they developed what they called Village Coffee Organizations (VCOs), which act as organizing structures. The FSU can go to districts where farmers lack agricultural training and access to financing and hold Farmer Field Schools (FFS).
Through the VCOs, farmers receive guidance on how to improve the quality of their coffees, so they can receive better prices, and BLOOM is able, thanks to the groups, to more efficiently offer its services and ultimately reach more people.