Coffee is Uganda’s top-earning export crop. Most importantly, it is estimated that approximately 20 percent of the entire population earn their cash income from coffee.

The coffee season in Uganda begins in July or August and, depending on the rain, stretches up to January or February. In this period, coffee farmers travel to the washing station every day and often several times per day. With their laborers, they harvest and, at half crop, send someone from the family to the washing station to have the coffee weighed against a receipt for the payment. At the end of the day the story repeats itself.

The waiting time is between three and four hours to get paid in cash, as the same individual who verifies the weight is authorized to make the payment. And the two tasks have to be performed separately.

The washing station is busiest at the end of the day between 3pm and 8pm. The waiting time stretches till night falls and payments can only be processed the next morning, which means another trip to get paid.

Farmers are under pressure to pay quickly. Laborers do not like to be paid the next day, food has to be bought today, school fees have to be paid on time. Considering that schools are generally very far from the village, travel and lodging expenses also sum up.

Plus, farmers worry about security. Carrying cash around can be challenging when it is obvious that you just received a big payment. Getting robbed on the way home is thus another big worry.

Cash is not always instantaneous, after all!

In 2015, UNCDF MM4P partnered with Kyagalanyi Coffee Ltd, a leading coffee company in Uganda, to digitize the payments to its 7000 farmers around Mount Elgon.

The main difficulty was that there was no electricity or network on the scenic slopes of Mount Elgon, therefore no phone. How do you roll out digital payments without electricity, network and phones? You team up.

MM4P brought together MTN, Yo Uganda and Fenix. MTN provided network coverage and mobile money services, whereas Yo Uganda designed the bulk payment solution and Fenix offered subsidized phone loans and solar charging solutions to the farmers.

Thanks to the new network and the phones, Kyagalanyi can communicate real-time prices to the washing stations, where larger volumes of coffee are now delivered. Staff are paid digitally and have become the ambassadors of digital payments in the community of farmers.

On the farmers’ side, the Kyagalanyi-MTN-MM4P partnership has changed their experience with payments by offering new options.

Today, farmers can choose to be paid for the coffee partially or entirely in mobile money on the basis of the receipt released at the washing station. Since last August, small-holder farmers have the option to access a new digital financial service through their MTN subscription: MoKash. Thanks to MoKash, they can save and borrow for immediate needs – ex. to buy spray of fertilizer or cans, and to pay laborers – as well as for school fees, which can be paid via mobile money.

Since last October, to encourage uptake of the digital services that come with a cost for farmers, those who chose to be paid digitally are pre-reimbursed the withdrawing fees in mobile money. This has proved to be a great incentive to try out complementary mobile money services such as saving via MoKash, performing peer-to-peer transfers and buying airtime.

To facilitate the uptake, a trained network of 129 agents was deployed in the Mount Elgon villages. A management information system (MIS) was piloted to keep real-time track of agent float & cash balances. As a result of a reliable agent network, approximately UGX 190,000,000 (USD 53,000) had circulated within the agent network in the first month of the MIS deployment.

Community trainings on how to use the services were rolled out. Furthermore, farmers benefit from a 50% to 100% bonus on loading airtime – you top-up UGX 3,200 (USD 0.89), MTN loads UGX 3,200.

Among the farmers who are now active users, those who chose to be paid in mobile money can leave the washing station as soon as they have the paper receipt. They receive the corresponding value plus the equivalent to the withdrawing fees instantaneously, as soon as the washing station manager starts to process the payments.

Nowadays in the slopes of the Mount Elgon, farmers who go to the washing station every day during the coffee season are now experiencing the option that comes with digital finance. As they have their coffee weighed, they are asked: “do you prefer to be paid digitally today or in cash tomorrow?”.