Streaming issues? Report here
Nonn Botha 1500 x 1500 2020 Nonn Botha 1500 x 1500 2020
702 Music with Nonn Botha
14:30 - 18:00
volume_up
volume_mute

Up Next: This is Africa with Richard Nwamba
See full line-up
702 Music with Nonn Botha
14:30 - 18:00
Home
arrow_forward
Business
fiber_manual_record
Africa

How the Internet of Things (IoT) is connecting rural farmers to the world

6 September 2021 12:09 PM
Tags:
Telecommunications
Bruce Whitfield
ABSA Bank
absa insights
Jacques de Vos
Sponsored Content
absa insights 2021

The power of digital is giving farmers an increase in productivity and access to formal value chains to generate higher returns.

The world is ever-changing and, so is the sector your business operates in. You don’t just need data to keep track of trends that are shaping the economy – you need the expertise to turn that data into valuable insights and sustainable growth opportunities that will unlock your business’ potential.

In the Absa Insights podcast series, The Money Show’s Bruce Whitfield engages in conversation with the bank's sector experts about investment possibilities in Agriculture, Consumer Goods and Services, Enterprise Supply Development and Telecommunications, Public Sector and, Natural Resources and Energy.

Listen to the audio below:

Telecommunication companies are making a huge impact on agriculture and healthcare in Africa.

One of those companies is Mezzanine – which started its journey in the healthcare industry back in 2004 focusing on medical and healthcare opportunities until it was acquired by Vodacom in 2012 as a subsidiary of the Group with a mandate to support markets with the design and development of digital solutions customers in the agricultural and healthcare spaces across Africa.

Envisioning the era of IoT

From leveraging the basic services of feature phones such as SMS, USSD and voice services, the company has evolved into a digital technology market leader that co-creates digital solutions that enable productive societies.

As engineers, we always dream of the impossible. So, we have these cases in mind but what was overwhelming in a positive way was the reach of making these benefits available to resource-limited settings. So naturally, you would think that these very rich digital experiences will be available to the upper end of the market, but the benefit of mobile is really taking these services to the African continent.

Jacques de Vos, Chief Executive Officer – Mezzanine

Free, perfect, and instant delivery of services

For de Vos, the opportunity in leveraging the digital attributes of delivering free, perfect, and instant services to citizens on the content is exponential.

So, how do we leverage these digital attributes to create new value or business models and use these attributes to effectively deliver value and capture value to supporting governments and private enterprises?

The question we’ve asked is, how do we use mobile in combination with digital in bringing that benefits to the last mile. The definition of the last mile in Africa – it’s in the classroom, it’s on the farm, it’s in the clinic, it’s at the workplace.

Jacques de Vos, Chief Executive Officer – Mezzanine

Mobile has really brought these digital attributes to the broader subscriber base across the continent, says de Vos.

"So, how is this technology helping somebody sitting in rural Tanzania who can’t get to town for medical care,” asks The Money Show’s Bruce Whitfield.

In the case of healthcare, Mezzanine has seen digital, and mobile improves the access to health services, the quality of health services and the affordability of accessing those services.

A lot of these citizens or beneficiaries that reside within a resource-limited setting – let’s say a rural area in Tanzania is confined to a hyper-local marketplace. So, their need to interact and transact is really confined to whatever services are on offer within the immediate proximity.

Jacques de Vos, Chief Executive Officer – Mezzanine

The focus on health system strengthening preventions and solutions using mobile ensures that there is access to medical services where it is needed and when it is needed, a safe supply of medication and the quality of these services rendered by either public or private providers meet the requirement.

From medical care to connecting rural farmers to the outside world

Over the years, the subsidiary has worked on various ways to use mobile and digital to allow farmers to participate in formal value chains so that they are able to access financial services.

“We kind of think of agriculture as a large-scale commercial operation but the vast majority of farmers across the African continent are small-scale... getting them connected to the outside world is absolutely pivotal in terms of the survival of entire communities in remote areas,” says The Money Show’s Bruce Whitfield.

In the past, financial service providers deemed it too risky to service farmers with credit products or insurance products.

On the sub-Saharan Africa market, there’s about 77 million of these benefactor small-scale farmer families and the majority (which is) more than 90% of these small-scale families are not participating in what we refer to as the formal agriculture value chain.

Jacques de Vos, Chief Executive Officer – Mezzanine

Today, we see financial service providers making products available to this sector of the market because mobile and digital is able to manage and mitigate the associated risks of servicing the segment, says de Vos.

Giving the farmer the power

Thanks to the Internet of Things, farmers participating in formal value chains are given the power to choose which stakeholders to transact and interact with and, while it has resulted in an increase in productivity, it has also increased the income generated by farming families.

The part that we’re excited about is the fact that we can make these benefits available to literally millions of farmers.

Jacques de Vos, Chief Executive Officer – Mezzanine

At present, the digital technology company supports close to 3 million farmers with a number of these digital services.

“In the past, the digital tradition insurance products to farmers required an assessor to visit the farm to perform physical assessments of what the damage was after a hailstorm or drought – from an affordability point of view, this meant that small-scale farmers were not able to afford these insurance products,” says de Vos.

By using satellite imagery and earth observation capabilities to monitor soil moisture and rainfall within regions across African countries, agricultural insurers have introduced index insurance to farmers subscribed to the insurance product. And, in the case of drought or floods, farmers can now receive a pay-out without any physical assessments taking place.

So, we’ve used technology and we’ve used the reach of mobile, to in effect, enable the insurers to serve what was an under-served segment of the market.

Jacques de Vos, Chief Executive Officer – Mezzanine

New opportunities for agricultural insurers

The power of digital has linked agricultural insurers to 77 million new customers, which makes for an attractive investment opportunity to any multinational looking to expand into new regions and segments.

The question we should ask each and every industry is, how do we leverage these attributes to start servicing these segments of the market which we’ve ignored completely.

Jacques de Vos, Chief Executive Officer – Mezzanine

Why don’t we see a mass uptake of these digital services?

While the Vodacom Group is a trusted brand on the continent, de Vos believes that it is important to bring the benefit of digital combined with a trusted brand and a local representative with an appreciation for the local culture to present the service in the village before an uptake can be seen.

Intervention required on a government regularity level to create a more conduce business environment is a priority, and we invest a lot working with the African Union and working with the European Union in supporting governments in introducing a more digital-friendly e-commerce regulatory environment.

Jacques de Vos, Chief Executive Officer – Mezzanine

We need to free up and liberate our entrepreneurs to continue to develop new solutions and innovate and then we will see thousands of new spaces being delivered in these markets, concludes de Vos.

For data-driven insights that match foresight with sustainable possibilities, re-visit our Absa Insights page regularly to listen to thought-provoking conversations with Absa Corporate and Investment Banking sector experts in the Absa Insights podcast series.




6 September 2021 12:09 PM
Tags:
Telecommunications
Bruce Whitfield
ABSA Bank
absa insights
Jacques de Vos
Sponsored Content
absa insights 2021

More from Absa Insights 2021