This Is How A Ghanaian Software Is Enabling Financial Inclusion For Cocoa Farmers

A software for purchasing and monitoring cocoa electronically is set to drive the cash-lite agenda for financial inclusion in the country.

Popularly called CocoaAsempa, the software has enhanced financial intermediation and inclusion amongst farmers and farmer groups.

There has indeed been some level of success with mobile money platforms. They have provided successful reach in the rural areas while deepening financial activity in the urban and peri-urban areas.  The mobile money platforms have thus achieved a certain level of financial inclusion.

However, there is a need to rope more segments of the population into the mainstream banking system where they can operate bank accounts. As the government of Ghana continues to drive its cash-lite agenda and greater financial inclusion, rural penetration is critical.

Consequently, a solution that has exhibited the effective potential to achieve bankable financial inclusion is the cocoa software.  CocoaAsempa, a solution created by TBM Risks Consult, enables Licensed Buying Companies (LBCs) to purchase cocoa electronically.

The system shortens the purchase life-cycle from a couple of days to literally under 15 minutes. The emphasis in this edition is the potential to achieve the dual benefit of financial inclusion, in its cashless form, by using the CocoaAsempa software.

Bank Account 

CocoaAsempa software enables LBCs to pay purchasing clerks and/or district officers for cocoa purchased, electronically.  Once approved, the money moves straight into the bank account of the individual waiting to receive funds.

In the 2019/20 crop season, district officers virtually marched purchasing clerks to the Rural and Community Banks (RCBs) to open bank accounts.  These persons hitherto received cash and went on to distribute to cocoa farmers.  Not that cocoa farmers have never encountered banks, but they have negative perceptions about the banks.

The negative perceptions result from issues such as service delays which lead to mistrust for the banks.  Some customer experiences also have to do with defaulting loans and thus not wanting to show up at the banks again.

CocoaAsempa has turned these negative experiences into positive feedbacks by operators in the cocoa purchasing value chain.

Partnership with ARB Apex Bank

Leveraging on ARB Apex Bank’s network of 144 Rural and Community Banks and over 800 branches nationwide, the CocoaAsempa software enabled LBCs to move funds from Head office account to the approved location’s account.  Money was moved upon approval of the LBC to do so.  All the banking procedures and managerial risks associated with such transfers were adhered to.

ARB Apex Bank’s integrated and robust systems at the Head Office and the Rural and Community Banks’ (RCBs’) branches was a significant factor for the success of the Government’s financial inclusion agenda with regard to cocoa purchases.

Two major services of ARB Apex Bank, namely: Apexlink, and Apexdirect were both integrated into the CocoaAsempa software.  Apexlink is a remittance service, while Apexdirect is an account-to-account channel.  Both proved useful for the operations.  It gave the option for the district managers of the LBCs to pay money to the purchasing clerks, and farmers into their respective accounts, either through a direct intra-bank transfer or the remittance system.

Farmers’ Sentiments

Knowing the negative sentiments of farmers towards operating bank accounts, the RCB managers put in the extra to ensure liquidity for prompt payments. The proactiveness of the bank managers reduced the fears of liquidity constraints, which could mitigate the use and interest of CocoaAsempa.

One district manager in Sefwi Boako of the Western North Region could not hide his joy with the system, quizzing why such a system has taken so long in coming.  He revealed that the software has made his work easier and safer and was prepared to be an ambassador to the system.

Business Development Manager at the ARB Apex Bank, Halima Oboshie Torto, speaking on what motivated the Bank to partner with TBM Risks Consult in deploying the CocoaAsempa software revealed that, “we saw the potential to resolve one of the pertinent issues in the cocoa buying industry, which is what we have been working on.  The issue of financial inclusion and financial management by cocoa farmers would largely improve.”

Madam Torto added that “once farmers know that they would get their money anytime they need it, they would feel more comfortable keeping their monies at the bank.”

Universal Banks

A cross-section of universal banks are also integrated into the CocoaAsempa software. The software allows LBCs from whichever bank they have an account, to transfer funds through the Ghana Interbank Payment and Settlement System (GhIPSS) Instant Pay (GIP) to other banks.

A number of LBCs who also utilized the universal banking space had a positive operational experience with the software. The integration of the software into the banking platforms of the banks brought their operations and banking needs all on the phone.  This functionality is possible on both smart and feature phones.

Financial Inclusion For Cocoa Farmers

Mr Yaw Korankye Antwi, Managing Consultant of TBM Risks Consult indicated that “the cocoa industry could not be left out of the drive for the cashless society. Especially when it is bringing bankable financial inclusion. The advent of COVID-19 has also emphasized the need for a cash-lite society. Hence, there cannot be a better time than now to employ the cocoa purchasing software,” he said.

“CocoaAsempa has an objective to use its capabilities to drive financial services such as pensions and insurance to the cocoa farmers.  This is what provides financial security to the farmers out of their earnings”, he further added

The 2020/21 crop season would kick off with a lot of bold print of the cocoa software on the industry.  With more LBCs signing on to the CocoaAsempa platform, their operations are expected to deepen financial inclusion.

Cocoa is usually purchased and paid for in rural areas.  Thus as LBCs continue to deploy the software to pay district managers/officers, purchasing clerks and ultimately farmers, both the cash-lite agenda and financial inclusion are therefore receiving the necessary impetus, through the novel CocoaAsempa software.