Digitization: The Next Giant Leap for Global Coffee Communities

Today, cash payments are common practice in the coffee world. Farmers bring their beans to washing stations (processing sites), weigh and wash their cherries and receive cash on the spot. The only proof that these transactions ever took place is a handwritten receipt. It’s not the most fool proof system for establishing traceability or provenance. It’s also a difficult and inefficient system for the farmers, who have to then bring their receipts to payment officers to receive money for their coffee cherries. Aside from the inefficiency, the system also poses a security risk with so much cash around.

Leading into our recent harvest, our goal was to introduce an easier and more efficient system that is also safer for our farmers. A system that didn’t just solve these issues at a community level, but also  empowered them individually and financially. For help, we turned to a local bank and worked with them to create a system that was more efficient for our farmers and their communities. The bank was willing and able – what bank doesn’t want more clients? – but the obstacles were many.

Overcoming the many obstacles

There are serious obstacles standing in the way of digitalizing payments in a country like Ethiopia. The first, Ethiopian farmers, like most, distrust banks. The second, is the focus on the short-term in sub-Saharan Africa, at the cost of long-term commitment and the financial security it brings. This is by no means a critique, but a reality. It’s hard to plan for the future when you don’t know where your next meal is coming from. 

To overcome these obstacles at our recent harvest, we set out to demonstrate the tangible benefits of banking by emphasizing safety and the potential for empowerment. Digitalizing payments means that farmers no longer need to carry around large amounts of cash on pay day. Nor do they have to hide that cash in their homes. In fact, when banked, farmers no longer have to make the often tedious journey to our washing station to receive their payments. They just need to go to the nearest ATM.

Before the harvest began, approximately a third of the members in our coffee collective had bank accounts. Unfortunately, only a few of these were women, so we focused much of our attention on them. We saw digitalizing banking as a powerful opportunity to empower women. After all, direct access to bank accounts gives them greater autonomy over both their personal and family finances.

To convince our community – and again, the women in particular – of the benefits of a bank account, we invited the bank staff themselves to our farm during the harvest. There, they spoke directly with our community members and created bank accounts for them on the spot. Of the 371 new bank accounts opened during our last harvest, 93 of them were by women.

Empowering women

By any measure, our financial empowerment program during the recent harvest was a great success. In banking nearly 400 new farmers, we also provided them with one-on-one financial training, and issued them ID cards with unique QR codes that give them access to a personalized digital wallet. The personalized digital wallets are important in that they enable Moyee consumers to transfer value to our farmers directly. This is going to revolutionize the conventional consumer-producer relationship, and is a crucial step to providing our farmers a REAL living income.

Our focus now is encouraging and engaging our community to embrace this new digital system, and making sure the benefits are visible. We believe we will create a chain reaction across the community, with more and more members opening bank accounts once they see the tangible benefits enjoyed by their neighbours.

Finally, we took the time to set up a Women Empowerment Committee, which will function as a platform for our upcoming Microloans Project. Empowering women and integrating their needs and perceptions into our strategies is absolutely essential to our success. And to think, we’re only getting started…