This month we’re diving into Sustainable Development Goal (SDG) #1 – No Poverty.
SDG #1 is a big objective to tackle before 2030 and sadly we are not on track. Nearly half of the world’s population is currently living in poverty, and lack of food and clean water is killing thousands every day. There is no one solution, particularly as it is intrinsically linked to the other Sustainable Development Goals. Therefore, to achieve the goal of no poverty in a global context, we need holistic systems change and to be looking at collaborating with other people working on solutions to have a bigger impact.
One great example of this comes from Hubber Anne Mafeti, Learning Manager at the Mastercard Foundation’s Rural & Agricultural Finance (RAF) Learning Lab.
The Lab is a 7-year initiative of the Mastercard Foundation (MCF), jointly implemented by the Global Development Incubator and Dalberg. They are the dedicated learning partner for MCF’s +170M USD rural & agricultural portfolio.
In practice, this means that they work directly with the 10 different organisations within that portfolio to:
- Advise them on their learning and knowledge dissemination strategies
- Conduct independent research to fill key knowledge gaps in the sector
- Share knowledge generated by our partners with the broader RAF sector
- Facilitate collaboration between our partners and with the broader RAF sector
But how does it contribute to reducing poverty worldwide? Here’s what Anne had to say:
“Smallholder farmers are among the world’s poorest and most vulnerable populations. This is especially true in Sub-Saharan Africa, where lack of access to the right inputs (seeds & fertilizer), financial services (e.g.: insurance to protect against crop loss; credit to help turn farming into a business) and technology (e.g: mechanisation; irrigation) mean that a majority of smallholder find themselves trapped in a cycle of poverty.
Several years back, MCF made a decision to heavily invest in rural & agricultural finance to test the idea that increased access to financial services can help smallholder farmers and their families get out of the poverty trap. By investing in a diverse set of partners, working across the continent and deploying various business models targeting smallholder farmers, the Foundation was trying to understand what works when it comes to improving the livelihoods of the poorest. Part of our mandate at the Lab is to share insights coming out of MCF’s portfolio.”
We aim to answer the following key learning questions:
- How does rural & ag finance contribute to poverty reduction and improved livelihoods?
- What products/services/channels do different client segments value and use, and why?
- What drives the business case for rural & agricultural finance & what are the keys to business model sustainability?
- What are the enablers and catalysts of an inclusive RAF ecosystem?
By sharing with the broader development sector the insights coming out of MCF’s RAF portfolio, other actors (financial service providers, policymakers, investors, etc) will replicate successful, high-impact models and new actors will enter the market to help fill the enormous financing gap that currently exists.”
And when it comes to stand out examples, here are three that demonstrate how diverse and innovative their portfolio is:
- One Acre Fund works with smallholder farmers who own or farm on average less than 2 acres of land. They offer a holistic bundle of services (financing for seed/fertilizer), distribution of farming inputs, training on good agricultural practices and access to markets to maximize harvest profits. Gaining access to One Acre Fund’s bundle often means that farmers almost double their yields after only one harvest cycle. You can learn more about OAF’s impact on their website.
- AgDevCo’s Smallholder Development Unit works with agribusinesses to connect them to farmers and build outgrower schemes. Through matching funding, the SDU helps these agribusinesses set up the necessary systems, processes and technology to build inclusive supply chains that ultimately benefit both the businesses and the farmers that join the outgrower scheme and gain access to finance, training and a guaranteed market for their produce.
- Mercy Corps AgriFin Accelerate works with partners to leverage mobile phones to help smallholder farmers access digital services to boost harvests and incomes. They’ve been working with Safaricom in Kenya to help develop Digifarm, a mobile-based platform that provides farmers with access to financial products, inputs and training from a single USSD-based menu. As of May 2019, DigiFarm has 1,038,000 farmers registered on its platform accessing educational content, high quality inputs, digital input credit and harvest cash loans.
The work that Anne is involved in also takes into consideration how gender affects poverty in the communities that they work in.
It’s hard to overstate the impact gender inequality has on rural women and their ability to actively contribute to and benefit from local economic activities. Sub-Saharan Africa remains one of the world’s most gender unequal regions. As my former colleague from One Acre Fund puts it in her excellent piece for Project Syndicate, “perceptions, attitudes and traditional roles conspire to limit women’s access to healthcare, education and economic resources.” When it comes to agriculture, the vast majority of rural women are actively involved in farming and yet more often than not they are not allowed to own land, and restrictions on their mobility and agency mean they are often unable to access the financial services they need to invest in growing their farms. Financially including women has a transformative impact not only on the women themselves, but their households and their communities.
Part of the solution is to design gender sensitive financial products that take into account the specific needs, requirements and challenges rural women face. I’ve heard many times over from innovators and start-ups entering the agricultural finance space in Africa that they’ll think about gender once they’ve proven that the product is viable. But women face significantly more challenges to accessing the right financial products, including higher rates of illiteracy, mobility constraints that prevent them from attending trainings or reaching a bank branch and constant threats of violence that may discourage them from taking up a product unless they can be sure of its safety and privacy. A product that works for women will work for anyone, but the same is not true the other way around.”
When we asked if there are some simple ways that we can all support initiatives that work to combat poverty, this was what Anne said:
“VOTE. As most of you already know, the United Kingdom has a legal duty to spend 0.7% of its GNI on overseas development aid each year. This was entrenched in law in 2015. The Department for International Development (DfID) is responsible for most of the UK’s aid spending, and their mission is to promote sustainable development and eliminate world poverty. They deploy a number of different types of funding instruments to achieve this mission.
While the main political parties in the UK don’t officially oppose this 0.7% target, DfID and the development aid target in general are a frequent target of disinformation campaigns in the tabloids and the likely future PM Boris Johnson has been very vocal in his belief that DfID should be folded into the Foreign Office. So the simplest way we can all support initiatives that work to combat poverty is to vote people into Parliament that understand the importance of development aid. But beyond that, the UK government needs to get serious about tax avoidance. Every year, $170B sit in tax havens globally. HMRC publishes its tax gap estimate every year – and it’s been increasing steadily.
This is money that could be used to bolster infrastructure, health care and education at home and abroad.”