Page 243 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

• Example: Pride Africa, an NGO, started the DrumNet project in 2003 to create an Information and
Communication Technology (ICT) platform to help value chain partners (buyers, farmers, agro-dealers,
and banks) operate more efficiently. DrumNet was a rules-based platform involving “a fixed price purchase
contract offered by a buyer, signed by producers and managed by a master contract establishing the
roles, rights, and responsibilities of all chain partners. The contractual agreement allowed producers to
access credit (first directly from DrumNet and later from partner banks) and purchase farming inputs
from certified input retailers. At harvest, contracted produce was aggregated and graded at designated
collection points, then sold to the buyer. DrumNet facilitated and tracked payment following a successful
buyer-seller transaction, ensuring credit was repaid and payment to producers was both secure and
accurate.” DrumNet charged fees for these services. 9

Figure 11 – DrumNet process flow

Existing and planned capabilities included:

• Payment: Collecting payment from buyer and distributing to farmer groups and banks.
• Information flow: Providing an SMS system that:

a) informed buyers what/when farmers planted, allowed buyers to monitor growing progress and
enabled buyers to communicate with farmers;

b) continually updated agro-dealers about stocking requirements;
c) informed farmers about collection dates and locations.
• Control: Allowing supply chain partners to track contract compliance and report/monitor supply chain
activities.
• Financial risk management: Collecting a 25 per cent line-of-credit deposit from farmers, and facilitating
micro-insurance for crops.
Value propositions vary:

• Farmers: Higher prices (broker disintermediation), fixed price contracts, and access to credit.
• Agro-dealers: Visibility into stock requirements, higher sales, and no need to offer credit.
• Buyers: Lower prices (broker disintermediation), more predictable supply, greater visibility, and lower
cash handling costs.
• Banks: New customers and lower cost and risk.

9 Interview with former DrumNet executive in March, 2016.

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