Women play a central role in rural economies, primarily through the agricultural sector. Yet these women face many barriers, including time poverty, lack of land ownership, fewer agricultural inputs, restrictive social norms, and less access to finance. The emergence of digital agricultural platforms has the potential to help rural women overcome these barriers and improve their livelihoods.

Digital agriculture platforms are a specific subset of AgTechs, defined as models that facilitate direct interactions between multiple users for the purpose of exchange. These platforms are built upon network effects—enabling multiple users on both sides of an exchange to interact, creating shared value for both platform providers and end users. The unique benefits created by digital platforms could be particularly helpful in leveling the playing field for women; however, platforms currently struggle to reach and engage this important customer segment.

In new research from CGAP, ISF Advisors and Value for Women, we look at how digital agricultural platforms can best integrate gender-forward practices, what the major opportunity areas are for creating shared value, and how donors and investors can support these efforts. This research builds on CGAP’s extensive work surrounding women in rural and agricultural livelihoods (WIRAL). In this blog post we summarize a few key findings, with a deeper dive into the opportunities surrounding sex-disaggregated data.

Understanding how digital platforms currently think about gender

Digital platforms have the ability to disintermediate markets, connect multiple users, facilitate information sharing, and provide farmers with a digital financial footprint. These benefits could be especially useful for rural women in overcoming gender-related barriers. For example, the exchange of knowledge and information that are crucial to competitively participate in markets (e.g., prices) is often out of reach for women due to restricted mobility and social norms that keep them out of male-dominated spaces. Digital platforms could connect them to this vital information with far less friction.

Unfortunately, although the digital platform market has grown rapidly, these AgTechs are struggling to reach rural women. While women make up half of smallholder farmers in sub-Saharan Africa, they represent only 25% of AgTech users. Even when AgTechs do reach rural women, usage rates suggest that they are not sufficiently serving them.

Many platforms recognize this missed opportunity and are thinking more about gender—but are only beginning to translate that into concrete action. While there are some encouraging examples of gender-forward efforts, this area is largely not seen as critical to commercial success. Platforms are generally focused on the short-term challenges of achieving profitability and scale. But platforms that integrate long-term gender intentionality into their models could tap into a large opportunity if they implement the best practices proposed in this research.

What are the best practices and biggest opportunities?

In our research, as seen in the figure below, we lay out a curated list of best practices that platforms, and their investors and donors, can adopt—with the ultimate goal of creating shared value for platforms and the women that engage with them.

The two practice areas at the top of this figure serve as foundational best practices that influence a platform’s actions in the other four areas. Internal prioritization of gender in the organizational strategy, budget, policies, etc. is necessary to then enable external-facing best practices around marketing, customer targeting, product design, and providing income generating opportunities.

Building on this, we outline the four biggest opportunities for platforms to increase shared value for themselves and for rural women. As in the best practices, two of these opportunities revolve around establishing a strong internal foundation for platforms to drive commercial and gender outcomes—and ultimately become more gender-forward:

• Embedding gender into organizational strategy
• Sex-disaggregated data for better decision making

The other two opportunities center on increasing impact for women as customers and income earners:

• Experimenting around women-focused innovations
• Increasing income-generating opportunities for women 

In this blog post, we will take a deeper dive into the opportunities around sex-disaggregated data.

Optimizing sex-disaggregated data for decision making

The collection and analysis of sex-disaggregated data is the typical starting point for increasing gender inclusion both within a company and in the external-facing products and services. A comprehensive business strategy that incorporates gender requires the ability to understand how many women a platform is serving, how well it is currently serving them, and the value women are generating.

Nearly all platforms interviewed collect basic sex-disaggregated data on their end users and their workforce, and nearly half of the providers that have agents on their platforms can also sex-disaggregate that data. However, the majority of platforms do not have a structured process for analyzing this data or taking action on those insights. Only one interviewed platform (CoAmana) seems to be collecting and leveraging sex-disaggregated data that enables it to better engage women customers. For others, there is a significant missed opportunity.

Many providers are aware of this opportunity, but 43% in our sample indicated that it is one of their top three challenges. With a more systematic approach to data collection, analysis, and decision making, platforms can leverage data for:

1. Target Setting and Prioritization: In our research, 50% of platforms surveyed indicated that they have made gender a top five priority, but they must link this strategy to concrete initiatives, set targets, and define metrics to track progress.
2. Understanding Customer Patterns: An important (and simple) next step would be to sex-disaggregate existing data—such as customer ratings or satisfaction scores—to understand satisfaction levels for different sub-segments of women (and other users, such as men or youth).
3. Designing Products: Insight on user patterns can then be leveraged in the product design process. This could result in finding ‘quick wins’ (i.e. shifting land requirements from individual names to family names given barriers for women to access land), or more robust product shifts (i.e. designing products specifically for women or youth).

The role of donors and investors

Importantly, platforms that implement this systematic data-driven approach can then quantify and showcase their impact to potential donors and investors. In fact, there are many entry points for donors and investors to influence platforms to become more gender-forward, especially at early stages of the business.

These entry points include:

• Building the case for gender inclusion through data and analysis; 
• Funding or facilitating technical assistance for platforms that want to become more gender-forward; 
• Providing investment or grant capital to reduce upfront costs and fuel the growth of gender-forward platforms; and 
• Incentivizing the collection of sex-disaggregated data and broader gender-forward actions. 

Investor and donor support (and influence) will be crucial for platforms to overcome market barriers and failures that currently prevent them from investing fully in rural women.

Data is growing in importance across all sectors, including agriculture. With the advent of new digital technologies and innovative business models, the amount of available data and potential use cases are increasing. Agricultural and Fintech innovators that recognize this trend are utilizing data in new ways, from creating digital platforms to delivering new, data-enabled services. Many are also exploring data partnerships, combining the power of multiple datasets to create greater impact for smallholder farmers.

In a new case study, ISF Advisors examined 33 engagements between Mercy Corps’ AgriFin program and 14 partners across four different countries. We found that around a quarter of the portfolio of AgriFin engagements—spanning various use cases—featured a strong data-sharing component. Underpinning many of these engagements are complex negotiations about how data sharing can unlock service delivery and enable different social and commercial outcomes for different players.

By analyzing these 33 engagements, we have uncovered lessons about the common barriers faced by data-sharing arrangements. In distilling these lessons, we hope to provide practical guidance and tools for overcoming these barriers to the broader ecosystem of actors involved in optimizing data sharing for agriculture.

The promise and role of data sharing in agriculture

Smallholder farmers’ remote location and lack of linkages to global markets have traditionally hindered robust data collection. But the penetration of mobile phones and other digital technologies into rural areas has made data collection and sharing significantly easier in recent years. New technologies such as drones, satellites, and sensors have also expanded data collection options.

Simultaneously, private companies are increasingly seeing farmers as potential customers and are turning to data to expand their understanding of this market segment. By entering into data-sharing partnerships, these companies can leverage combined datasets to develop new, tailored products for smallholder farmers, integrate farmer risk scoring, and optimize customer interactions. Some companies are even utilizing combined datasets to create entirely new business models where data itself is the commodity, sold directly to customers or to businesses that want to know more about their customers.

Despite the increasing use of data in agriculture, it is still in a nascent stage of development. At a foundational level, practitioners don’t even have a common data taxonomy to talk about what agriculture data is—making it difficult to learn from what others are doing. Additionally, many investments into new data-enabled platforms, models, services, and systems are still working out how to operate profitably at scale. Data-sharing engagements, while promising, tend to lack sophistication on several levels: 1) the types of data being shared (limited primarily to demographic data); 2) the format of data sharing (primarily static reports); 3) the level of analysis applied to the data (primarily simple analysis at the farmer level; and 4) the types of data-sharing agreements (primarily bilateral).

Barriers to effective data sharing

As might be expected in such complex arrangements involving a variety of actors, analysis of early data-sharing partnerships shows a range of barriers. Factors like the type of partners, type of data, use case for the data, and country where data is shared typically shape which barriers a partnership will face.

Looking at the AgriFin portfolio, we can see that the primary barriers to establishing a data-sharing agreement can be classified as:

• Cultural (e.g., the company’s leadership or established internal data-sharing practices);
• Capacity (e.g., the skills, technology, and experience each partner brings to the table);
• Commercial (e.g., example, the cost of data and how partners treat intellectual property and/or competition in the data space);
• Reputational (e.g., how partners think about the riskiness of sharing personal data); and
• Regulatory (e.g., national data policies and legal jusdictions).

Even for organizations that recognize the potential of data in agriculture, these barriers can prevent them from effectively assessing the business case for investment within different regulatory environments. Once a data-sharing agreement is created, the barriers tend to shift. For example, many organizations don’t have a dedicated team working on the engagement, which can lead to delays in sharing data. Data-sharing agreements also suffer when the partners don’t have on-the-ground staff members who understand how to work with disaggregated farmers.

Certain barriers are more apparent with certain types of partners. For instance, government and nonprofit actors often face skill and capacity barriers, while financial service providers often contend more with cultural and regulatory barriers. While each use case is unique, we have distilled a common taxonomy of reference barriers and a mapping of where they’re most likely to show up in different partnerships (see full case study for more detail).

Empowering effective data sharing

The future is digital

Build or buy: Understanding options for digitization

When an FSP decides to digitize, there are a range of options available, from building products and capabilities in-house, to hiring external digitization contractors to develop client-specific systems. These types of solutions can be mixed and matched to address a range of functional requirements—core banking, client registration and management, credit assessment, and more.

From an FSP’s perspective, the crucial considerations are strategic, financial and operational fit with the business. As in most markets, there is a general trade-off between affordability and customization. The more ‘bespoke’ a system, the higher the development and maintenance costs will be. From a functional perspective, building highly tailored systems internally will be required for organizations with a heavily tech-centric business model or operating in environments that have highly specific digital requirements (including strict privacy laws, regulations impacting FPS’ customer engagement processes, etc.). However, many FSPs could be better served by contracting with third-party providers, which can provider lower-cost options via standardized systems, with customizable modules and services a la carte when necessary.

So why does internally built digitization persist to such a high degree? In working with their partners, the Lab identified two main concerns that drive FSPs to rely on internal development of these systems. First, there is no ‘one size fits all’ system that will meet all FSPs’ needs to the same extent. There must be a minimum level of product customization and integration to successfully support an FSP’s digitization. Currently, many of the third-party providers are start-ups themselves, struggling to provide this necessary minimum support. Second, many FSPs simply don’t know where to look for third-party providers that meet their specific needs. And FSPs struggle with how to realistically assess their options given that providers’ track records are so limited—often there is no tangible proof of a product’s impact, just vague promises.

The fact is, the third-party provider market is not sufficiently developed to fulfill every FSP’s needs, and in-house systems will continue to play a crucial role for many organizations. But we suggest that the longer-term benefits of a robust service ecosystem for digitization deserve additional consideration, especially from donors that are impacting how this market develops around the world.

Donor objectives: FSP success and social return on investment

Imagine a world in which every company built their own email program. While early electronic communication may have been developed internally out of necessity, the maturation of the market clearly depended on a robust set of specialist providers. Lower marginal cost, specialized but widely available innovation, the development of skill nodes within the economy, and the ability to communicate between organizations were all bolstered by third-party providers meeting the needs of multiple organizations.

Digitization of FSPs is developing along a similar trajectory—though the need for strict privacy and security protocols adds an additional, and very challenging, dimension to the story. To date, many of these systems have been developed internally out of necessity. And currently, many donor-funded digitization projects focus on supporting the development of in-house systems and capabilities. As discussed above, there are benefits to this approach under specific conditions—digitization as part of the core business or specific digital requirements. However, is this approach to funding the right one if long-term impact and a vibrant digital ecosystem are the goals?

The case for considering two markets with digital investments

In this context, donors’ investments have the ability to shape the development of an FSP’s individual digitization service AND the digitization service market overall. In-house development contributes to an individual FSP’s capabilities and systems, but this type of internal, bespoke investment can present distinct downsides for the long-term impacts of digitization.

• First, when funding internal digitization projects on an individual basis, donors are foregoing economies of scale. Many of the systems currently being developed internally will be duplicative, meaning that donors are paying to develop the same or similar functionality multiple times. By directing funding towards third-party providers instead, donors have the potential to drastically increase the functionality that each dollar buys by avoiding scenarios in which each FSP is ‘reinventing the digital wheel’.
• Second, in-house development of digital systems results in ‘quarantined innovation’, where advances in digitization cannot easily spread through the market. There is also a paradoxical ‘downside of success’—when an individual FSP develops a highly successful product, the proprietary nature limits the impact of the innovation. And in the event that an individual FSP fails or abandons a system, the donor-funded digitization investment goes to waste. In contrast, if donors actively direct funding towards third-party providers they support a model of ‘distributed innovation’. The development of skill nodes and publicly available digital products broadens the scope of impact, and the rise of a robust service ecosystem offers the long-term potential for services at lower marginal cost.
• Finally, many donors actively profess an interest in data sharing and collaboration, which is hindered by the development of idiosyncratic systems. Widely adopted third-party systems offer the potential for interoperability and seamless data transfer that is unlikely with bespoke systems.

A call for a new donor mindset

Early movers

Some donors and actors are already incorporating these opportunities into their granting and investment priorities.

Mojaloop (previously the Level One Project, funded by the Gates Foundation) is an open source software that offers an interoperable payments platform to anyone in financial services. The intent of the project is to level the playing field for companies seeking to enter or expand the digital payment space by reducing the need to ‘reinvent the digital wheel’ for payment processing and to facilitate a connected ecosystem that allows seamless transfers across many actors within the payments ecosystem—in other words, the economies of scale opportunity and the data opportunity.

LenddoEFL (an Omidyar Network investee) and First Access (a Mastercard Foundation Fund for Rural Prosperity Innovation Competition winner) both offer credit scoring platforms for financial institutions seeking to serve underbanked people at lower cost—addressing the quarantined innovation dilemma by developing services that actively seek to serve FSPs around the world.

Other initiatives are aimed at addressing FSPs’ concerns about finding a trusted service provider. FinForward, a partnership between FMO (the Dutch Development Bank) and FinConecta (a Fintech company), offers a proprietary market platform “dedicated to accelerate the digitization of the financial industry in Africa by connecting African Financial Institutions (FIs) and Mobile Money Providers (MMPs) with Fintech companies worldwide.” Similarly, the ASEAN Financial Innovation Network (AFIN), a collaboration between the Monetary Authority of Singapore (MAS), the International Finance Corporation (IFC), World Bank Group and the ASEAN Bankers Association (ABA), has launched APIX—an open-architecture API platform for collaboration between FinTechs and Financial Institutions. Both these initiatives offer financial institutions easy access to a pre-vetted community of Fintech service providers (“marketplace” functionality) and a low-cost, low-risk environment to prototype and test potential systems (“sandbox” functionality).

Learning from other markets

As donors and ecosystem actors shape this nascent market, it is helpful to remember that this is not completely new territory. Digitization and specialist third-party service providers have been developing in many other markets around the world, providing us with valuable sources of learning.

In the early days of microfinance, donors were quick to fund the development of bespoke core-banking systems to accommodate the unique requirements of this new form of lending.  However, after a period of in-house replications of specialized software, a more sustainable and specialized vendor market emerged that built and maintained microfinance-specific core banking systems for the industry.  Part of that shift was facilitated by CGAP, which in the mid-2000s created an Management Information Systems (MIS) fund, which paid for MFI needs assessments. CGAP also facilitated access to quality vendors via an online library of pre-reviewed core banking systems providers, thus addressing the same type of concerns that current FSPs have around finding trusted vendors.

The digital health sector, while highly diverse across countries, has started to coalesce around a core set of software solutions and third-party providers. In the private sector, the challenges of standardization, interoperability, and quality have been largely addressed. In the cost-constrained public sector, and developing country consumer-facing sector, many digital health data collection systems have been built off 2-3 foundation software builds. One such example is OpenMRS, an open source electronic medical records system developed by a non-profit collaborative network of universities, NGOs, and software companies, funded by USAID and the Rockefeller Foundation. And in the specific market for client-facing data collection, there are a set of third-party providers, both non-profit and for-profit, leading the field, including CommCare, Medic Mobile, Ona, and Aether/Gather.

Just imagine…

Imagine a rural finance market where companies provide digital solutions to all players in the market with the sophistication of technology providers such as Salesforce, PayPal, or Oracle.  Suddenly farmer registration, integrated payments solutions, credit scoring, and integrated insurance bundles would be a matter of integrating into value chains rather than spending years creating the technology from scratch.

These opportunities, at this crucial stage of product development, makes considering two markets such an important conversation to have.  Rather than defaulting to siloed internal systems, is there an alternative that could spur the evolution of a supporting technology market to innovate solutions for longer-term, more systemic impact? Often, we think there is!

In 2016, our landmark report Inflection Point identified a series of enablers to help close the USD 50 billion smallholder financing gap and unlock growth in smallholder finance. To no surprise, market transparency and availability of market data were some of the most critical. To close the financing gap, providers and practitioners need to make more customer-centric decisions, understand how to build more sustainable business models, and identify the effectiveness of different smallholder solutions. Yet, without transparent markets and reliable data, stakeholders across the value chain are unable to make smart decisions on how to improve smallholder financial solutions.

Since the publication of this study, we’ve seen improvement in market data transparency, creating opportunity to unlock access to finance for smallholders. While this improvement is significant, particularly around transparency for demand-side and impact data, there is a notable gap in data transparency for supply-side needs.

1. Supply-side data is crucial for providers to better understand the competitive landscape and features of effective business models. With granular-level data, providers can understand what competitors are doing to serve smallholder farmers, understand a product’s value proposition, and identify which solutions have proved financially sustainable and how. However, there are three critical challenges providers face in regards to supply-side data: (1) there is a limited number of efforts aggregating data on market actors, (2) those that are aggregating data, often fail to provide enough granularity for it to be valuable and (3) providers themselves are often unwilling to share data publicly on their business model given competitive market risks
2. Demand side data is fundamental to understanding an actor’s target client and developing customer-centric products. To effectively provide financial solutions for smallholders, providers must gather and analyze data to understand who their target customer is and how to better serve them. For example, CGAP’s Smallholder National Survey data helps providers understand how to segment smallholders and build solutions that address the needs of each segment. Organizations like CGAP are doing an exceptional job at making demand-side data available, however, there needs to be a more concerted effort around making the data usable for a given audience.
3. Impact data is critical for providers to assess effective interventions in terms of farmer impact. For instance, evaluation studies by J-PAL and IPA allow providers to understand which smallholder financial products have the greatest impact on farmer livelihoods.  Research institutions and think-tanks tend to play a heavy role in gathering and sharing impact related data, however, smaller on-the-ground organizations often lack the resources to implement impact measurement activities at scale, particularly rigorous impact evaluations. Additionally, few organizations are aggregating and collecting sector-wide evidence to compare impact evidence across different institution types.

Bringing data transparency to the next level

Making credible, relevant, and quality data accessible is only one piece of the puzzle. To really reap the benefits of these data sets and unlock growth in agricultural and smallholder finance, data providers need to make the data not only accessible but, most importantly, usable. For example, the Lab is working with partners to think through how to make demand-side data usable for FSPs to better design products. This might include hosting workshops with potential users to explore data use-cases, organizing data “hackathons”, publishing case studies that highlight the business case for data, and developing how-to-guides for data usage. Additionally, to catalyze these efforts in data transparency, each stakeholder has a specific role to play:

• FSPs and DSPs can increase market transparency and user access by partaking in relevant databases – such as the Smallholder Finance Explore. This requires engaging with the data available, building their team’s capacity, and sharing information on their solutions.
• Funder and donors should support the development and maintenance of market databases as a public good to ensure improved market transparency is accessible for organizations at every stage; as well as data capacity building within organizations to ensure they are able to benefit from new data sets.
• Think tanks, researchers, practitioners can celebrate and communicate the progress of data resources to speed up uptake and usage from a variety of users.

In 2013 ISF developed a first of its kind global view of the technical assistance (TA) landscape for smallholder farmers. This initial briefing note described a highly fragmented USD8 billion a year industry – where 70% of resources were channeled through public extension systems, 20% through donor funded programs, and 10% through the efforts of large multinational companies. As part of this research, ISF developed a typology of existing programs in the technical assistance landscape (see figure 1) with updated size estimates and wiki features.

ISF’s 2014 follow up briefing note Rethinking technical assistance to unlock smallholder financing identified a gap in the way that these different forms of technical assistance were helping to facilitate access to finance for smallholder farmers. At that time, only 3% of funding for agricultural technical assistance went toward helping providers develop financial solutions for farmers. Despite slow movement, there have been positive changes in the last five years, along with encouraging spots of activity across the technical assistance landscape.

Integration and coordination: Significant new trends

The integration of TA with other services – particularly financial – promises to be more effective than TA alone.  And we are seeing significant new trends across three key areas:

• Greater focus on food systems and the role of the private sector: Overall, the design and implementation of technical assistance has experienced a significant shift from a value chain development view to a market systems view.  While this has always been core to certain types of technical assistance (e.g. certification, pre-competitive platforms) the market systems approach is becoming more mainstream and leading to more integrated technical assistance models. Examples such as Technoserve’s success with an integrated approach in their Coffee Initiative of East Africa, have been the focus of the last number of Global Forum for Rural Advisory Services global partner meetings.
• Greater coordination around key commodities: The rise of multi-stakeholder initiatives in key crop areas such as cocoa (Cocoa-Action), palm oil (Roundtable on Sustainable Palm Oil), tea (the Ethical Tea Initiative) and coffee (the Global Coffee Platform) are bringing new levels of market insight and coordination to the design of technical assistance in key producing countries.
• Stronger investment in TA and other support to financial service providers (FSPs): Led in part by The MasterCard Foundation’s USD175 million portfolio of grant investments in rural and agricultural finance, a new wave of programs are providing business development services (as well as sharing research and development costs) to support FSPs interested in serving smallholders. Foundation programs working with a range of local providers to develop and test financial solutions for farmers include Agrifin Accelerate, AGRA FISFAP, ICCO STARS, Kiva, and the Fund for Rural Prosperity. Other efforts include CGAP’s partnerships with financial institutions to pilot new approaches for smallholder families, and the agriculture efforts of Financial Sector Deepening Africa (FSDA),

New epicenters of activity

We are also seeing bright spots of activity emerging across the landscape — from renewed attention to existing systems to new collaborations and innovations:

• Re-energization of public extension systems: Ethiopia and Rwanda are creating a new standard for what government led programs can achieve, while countries such as Nigeria and Honduras are laying out bold new plans to try to re-energize their extension systems through training and involving a new wave of younger agro-entrepreneurs.
• New donor efforts: The USAID-funded Developing Local Extension Capacity project and less formal Transforming Extension Initiative are new collaborations by major donors to develop and coordinate transformative efforts at scale.  These programs are important platforms for driving new approaches through traditional farmer outreach and training models.  In addition, a consortium of donors and implementers have formed an interest group for promoting digital technology for agricultural extension.  They include the World Bank and the Gates Foundation, which has developed a comprehensive new ICT4Agriculture strategy with a major focus on technology in rural advisory services.
• Digital technology for extension: A growing number of digital service providers, over 200 enterprises and projects globally, are enabling organizations to deliver TA in innovative ways – from changing how traditional rural advisory services are delivered, to developing new participatory models, and finding ways of tailoring advice for farmers through precision technologies like remote and in-field sensors and much more timely and granular weather data. For instance, Digital Green is rapidly scaling its approach of applying video technology and intensive data collection to empower information extension and farmer-to-farmer training. In Ethiopia, the Agricultural Transformation Agency’s agricultural helpline is reaching millions of farmers each month with a new interactive voice response service. A new wave of tech firms such as Arifu and Farm Radio International are transforming the provision of advice to farmers from the ground up.

Fulfilling the promise of technical assistance: Action steps

As these developments show, progress has been made on many of the key recommendations from ISF’s research in 2013. However, we see a number of key areas where more continued concentration is needed:

• Stronger focus on mainstreaming climate smart agriculture and nutrition, in addition to gender, as core parts of technical assistance programming.
• Focus on sharing and pooling of data in ways that respect competition. Over time this will be an important way of standardizing metrics and measurement of results.
• More focus on the potential of technology. There are exciting glimpses of potential, but those serving smallholders can make better use of the transformative potential of technology in delivery of TA. For instance, in the Learning Lab’s digitalization study, FSPs who had begun their digital journeys were still unlikely to have digitalized support services for farmers (stay tuned for digital service provider landscape data from the Lab).

The smallholder ecosystem model of Inflection Point identifies technical assistance providers as key players in the enabling environment for smallholder finance. While the landscape has evolved slowly, new developments and epicenters of activity mean that we are better positioned than ever before to help close the financing gap and improve livelihoods of the rural poor.