1. m-agri information services through ckws: the case …api.ning.com/.../grameenckwuganda.pdf ·...

Author: Alvaro Valverde

1. M-Agri Information Services Through CKWs: The Case of Grameen AppLab

a. Vital Statistics

Figure 1. Evolution of the customers of the program Figure 2. Evolution of the CKWs of the program

Figure 3. Evolution of information services Figure 4. Evolution of number of surveys

Figure 5. Revenue generated through surveys Figure 6. Impact of the CKW on food security


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b. The CKW Program at Glance

Years of Operation: 3 Number of Customers: 58,854

Service Offering: Weather; Agri Info; MIS; Trading Platform; Input Suppliers; Illness Mgt.

Partnership Model: 31 Partners, including: NGOs, IOs, Public and Private.

Delivery Channels: CKWs equipped with smartphones

Profitable: Currently NO. Expected Break-even: 2013

The Community Knowledge Worker (CKW) program began its operations in Uganda in 2009,

after a successful test of concept in 2008 and after being granted a 4.7$ million grant by the Bill and

Melinda Gates Foundation. The program uses smart phones through a network of farm leaders,

called CKWs, to provide smallholder farmers living on less than 2$ a day with all sorts of

agricultural related information. Since its inception the program has attracted the interest of

development academics and practitioners for several reasons. In terms of size, the CKW program

currently serves over 50,000 farmers in Uganda and plans to expand to 250,000 by the end of 2014.

Figure 7. CKW two-fold information flow

Source: Author’s Own

The CKW program uses a unique approach for research, piloting, and impact evaluation

process that allows the AppLab team to test several innovative services and assess their impact in

poverty reduction in a relatively quick way using the CKW network. Additionally, as shown in

Figure 17, the program has developed an innovative two-way information loop between farmers,

the AppLab’s CKWs, and development organizations. On one side (represented in blue) it provides

agricultural information to the customers of the program and on the other (represented in green)

Grameen conducts surveys and gathers information from the farmers that help counterpart

organizations improve their services to better address farmer’s needs.


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Figure 8. Inbound information flow


As shown in Figure 18, the inbound information flow consists of several steps. First the farmers

request information from the CKWs. Second the CKWs try to get answers through the software

installed in their smart phones, if they are successful they deliver this information to the farmers.

Third, if the phone search is not successful the CKWs contact the field officer and this

communicates the unanswered queries to AppLab’s Question Box, which searchs for answers in

data bases and websites and communicates the results back to the field officer, who communicates

with the CKW and this replies to the questions posed by the farmers.

Figure 9. Outbound information flow


Figure 19. shows the outbound information flow, which takes places in parallel to the inbound

information flow. The outbound flow consists of three main steps. First the CKWs conduct a survey

to the farmers; then they send the results of the survey to AppLab, where the questions will be

processed; finally they are delivered to third party actors for an agreed price.

The CKW program has not reached the break-even point so far. As the majority of M-Agri

initiatives that provide information services to poor farmers it has heavily relied on external funding

and struggled to generate direct revenue from customers. Acknowledging these factors and aiming

to be self sustainable, the Grameen Foundation has pioneered in exploring alternative ways of


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generating revenue through selling customer information to third party actors. The advanced survey

system offered by the CKW program has witnessed an increased and steady growth since it was

introduced. This service combined with new services like data mining services or the self serve

service offer a good alternative to generate enough revenue to cover operating costs in future years.

The Grameen Foundation estimates that as the customer base increases the cost per customer will

drop and the revenue generated through selling customer information to third party actors will

increase. This is expected to result in the achievement of the financial break-even point by 2013.

The Grameen Foundation puts particular emphasis on evaluating the impact of farmer access to

those information services provided through the CKW program on poverty reduction. The CKW

program has proved two major impacts on the lives of its customers: increased revenues and

increased productivity. For those farmers that belong to groups and associations, connection to

buyers and access to information about market prices has contributed to improve their incomes in

two ways. By knowing the prices of the markets, farmers can decide to store their harvest and wait

for a favourable moment to sell it in the markets and in case of depending on middlemen for selling

the harvest their bargaining power is increased. The productivity of the farmers is also increased in

two ways: by having higher yields and by reducing losses. By accessing improved agronomic

techniques and inputs farmers benefit from higher yields. Access to weather information helps

farmers identify favourable moments for planting and harvesting, and by accessing early detention

and treatment of crop and livestock diseases they are able to reduce losses and ensure the higher

performance of their yields. All this is directly related to an increase in the levels of food security of

farmers that harvest more food and/or make more money from the sales of products allowing them

to buy more food.

c. Operating Context

Uganda is a landlocked country and a key piece for the development of the East African region

given the recent discovery of the biggest untapped source of oil in sub-Saharan Africa in the area of

Lake Albert. The last census of July 2011 estimated its current population in over 34.5 million

people, with over 80 per cent of its labour force dedicated to agriculture as main economic activity

(CIA: 2012). Uganda’s economic growth has surpassed that of neighbouring Kenya in the last five

years with an average GDP growth rate of over 7 percent during these years (WB: 2012) compared

to Kenya, which has reported a growth rate of less than 6 percent during the same period. However,

despite its economic growth, in 2009 it was estimated that 24.5 per cent of Uganda’s population still

lived below the national poverty line, and 64.5 per cent of the population lived with less than 2 $ a

day (WB: 2012). These conditions together with an increasing ratio of mobile phone penetration


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offered the Grameen Foundation an attractive environment to establish an information and financial

services incubator for disadvantaged populations.

Telecommunications Landscape

Figure 10. Market share mobile phone operators in Uganda

Source Data: (PWC: 2011)

From the 1970s until the beginning of the 1990s, the telecommunications sector in Uganda was

led by a monopoly, the Uganda Post and Telecommunications Corporation (UPTC). This monopoly

came to an end in 1997, with the Uganda Communications Act, which reduced the government’s

role in the sector and encouraged competition and private sector participation. Since then, Uganda’s

telecommunications sector has fully opened the door to competition and currently has five major

mobile operators. MTN started its operations in Uganda in 1998, and since then it has achieved

continuous and solid growth in its customer base. Figure 20 shows the market share of the five

mobile operators in 2009 and 2010. MTN is currently the main player in the sector, accounting for

almost half of the market base, and followed by Airtel, UTL and Warid, which face a close

competition.

The telecommunications industry is currently the key driver of the economic growth of the

services sector of Uganda, which accounts for more than 50 per cent of the Gross Domestic Product

(GDP) of the country (PWC: 2011). Figure 21 shows how the growth of the telecommunications

industry in Uganda has been accompanied by an astonishing growth in the levels of mobile phone

penetration in the country. Current levels of mobile phone penetration are situated at around 38 per

cent and the industry captures millions of new customers every year (in 2010 the industry captured

3.5 million new subscribers). Moreover, the industry is expected to reach 25 million subscribers by


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2015, which would mean penetration levels over 70 per cent (PWC: 2011). However, despite these

promising figures, mobile penetration levels in rural areas are often under 10 per cent, which poses

a major challenge for the development of the industry and an opportunity for the mobile operators

to increase their market share while extending their services to those underprivileged communities

who are left behind in the technological revolution (PWC: 2011).

Figure 11. Mobile phone subscriptions (per 100 people)

Source Data: World Bank, World Development Indicators (2012)

Agricultural Landscape

Agriculture is still a key sector of the Ugandan economy. Even though it only contributes

around 14 per cent to the GDP of the country, the agriculture sector still employs 66 per cent of the

Ugandan labour force. The majority of agricultural production takes place on smallholder plots

(PWC: 2011). The Ugandan government claims the good performance of the sector in recent years

and reinforces the idea that the sector accounts for almost half percent of Uganda’s exports

(MAAIF: 2010). However, the agricultural sector faces some major challenges that need to be

addressed for the development of the sector. Variability of international commodity prices and the

management of producer prices are a key piece. Limited access to affordable credit or financial

services is also a major challenge to the sector. Additionally, dependence on unpredictable weather

patterns affects farmer’s crop production, particularly in the case of small-scale farmers (PWC:

2011). There is a clear space in agriculture for innovative services that address the latent needs and

challenges faced by the sector. Addressing these needs is particularly relevant for development

organizations, as the vast majority of poor population is located in rural areas and use agriculture as

their main income source.


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Financial Landscape

The liberalisation of the financial sector began in 1987 and since then it has been strengthened,

and its internal competition and domestic resource mobilisation have been increased. The banking

industry has witnessed the fastest growth, with double-digit growth rates for the last decade.

However, only 33 per cent of the bankable population currently access formal banking services. The

insurance industry has also grown rapidly and now counts with 26 licensed insurance companies,

with a strong foreign presence, particularly from Kenya and South Africa. Poor populations usually

struggle to access formal financial services, while some have access to semi-formal (some MFIs) or

informal institutions. The lack of new financial instruments and innovative technologies that target

this segment of the population hinders the development of such a key sector as agriculture.

Microfinance institutions and other actors are increasingly acknowledging the need for innovation

in financial services that target poor rural farmers.

d. Description of Grameen’s Community Knowledge Worker Program

Evolution of the service

The Grameen Foundation (Grameen Foundation) was founded in 1997 with the aim of helping

the world poorest break out of poverty through access to financial services and technology

solutions. One of the most relevant arms of the Grameen Foundation has been its Application

Laboratory (AppLab), which concentrates on exploring the potential of mobile phones to improve

the lives of the rural poor in the countries where it operates (Carbalho et al.: 2011). Grameen

Foundation’s AppLab is currently present in Uganda, Ghana, and Indonesia, and plans to expand to

other countries and regions including South America. AppLab’s office in Uganda is currently the

biggest in number of workers and it is one of the most relevant in terms of innovation in

information and financial services research.

In 2008 the Grameen Foundation, and MTN Uganda (Uganda’s leading telecommunications

provider) partnered together to conduct a desk and field research. The partnership received a grant

from the Gates Foundation to develop the test of concept of the program. For this purpose, the

AppLab collaborated with another 16 organizations including the International Institute for Tropical

Agriculture (IITA) and Uganda’s National Agricultural Research Organization (NARO). In

December 2008, AppLab started a nine-month pilot. During the pilot, AppLab recruited and trained

over 40 CKWs, prototyped 7 mobile information services and conducted mobile surveys. The

findings of the pilot included:

• The importance of the CKWs as trusted intermediaries


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• The need for continuous CKW training

• The strong representation of poor women among the customers

• The easiness of using a menu-based search system compared to SMS

• Pairing surveys with information dissemination has a built-in incentive for answering

questions

Figure 12. Evolution of the customers of the CKW program (projection: dashed)

Source Data: CKW Dashboard (2012)

As a result of the successful pilot phase, the Grameen Foundation received a $4.7 million grant

from the Gates Foundation for 4 years to expand the operation of the CKW program across Uganda.

Since 2009, the program has grown rapidly, reaching 800 CKWs, and over 50,000 customers

(Figure 22) from 8,000 villages (Figure 23).

Figure 13. Number of Villages Covered


The CKW program currently offers six different information services:

• Weather forecasts up to three days in advance.

• Agricultural tips and advice.


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• Market prices for 42 commodities in 20 districts.

• Market platform that links producers and traders.

• Input supplier directory.

• Detailed farming information including pest or illness management for crops and livestock.

During the implementation and expansion phase of the CKW program, the Grameen

Foundation partnered with Google to develop a set of innovative applications that could serve as an

additional channel for providing extension services to poor farmers. The three main applications

developed through this partnership were:

• Farmer’s Friend, an SMS-based database accessible to farmers that search for agricultural

information

• Google Trader, an SMS and web service to connect buyers and sellers and to find

transportation options for the farmers to bring their goods to the markets

• Weather Application, an SMS-based search engine for weather forecasts

A few months after piloting these applications, Google took the leading role in the applications

and the Grameen Foundation decided to step back and concentrate more on the provision of these

services through its own developed technology and network of CKWs. The technology of used by

the CKWs has been evolving since the inception of the program. The period between 2010 and

2011 was concentrated in four main technology decisions:

• Building for scale has been since the beginning a key decision area with the aim of building

a self-owned technology that allows its use around the globe. This includes web-based

access, a sales-force platform that gives the Grameen Foundation enterprise-level cloud

functionality, and shell applications that be easily used for content from any sector.

• Increasing the impact of smartphones has also been a key area of focus in this period.

This objective has been achieved through: advanced content and survey functionality;

increased data capabilities compared to the use of SMS, that is approximately 500 times

more expensive than data rates; GPS functionality that adds value to the data analytics; and

the fall of prices of smartphones from $450 per handset in 2010 to $150 at the beginning of

2012.

• To keep costs low, the Grameen Foundation has concentrated on developing only those

applications requested and paid by partners. However, all applications are built in a way that

can be added to the portfolio of services of the Grameen Foundation.

• To address the power needs of the smartphones, the Grameen Foundation uses a versatile

energy set that can charge up to 10 phones using solar or bicycle power.


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Design and Implementation

The CKW program addresses the information needs of poor farmers located in rural

communities of Uganda. Through partnerships with some of the leading extension agencies and

NGOs, like NAADS or the World Food Program, the Grameen Foundation carefully recruits, trains,

and supports a network of workers called the “CKWs”. The successful CKWs are nominated by

peers within their communities, helping in this way to identify those trusted farmers with an

entrepreneurial spirit.

For the development of the databases of agricultural information the Grameen Foundation

partners with experts organizations in the field, both to get the necessary information and to analyse

it and make it understandable and transferrable over mobile phone technology. The team of

software developers of the Grameen Foundation work closely with MTN to develop the necessary

mobile phone applications that support the two-fold information flow: the delivery of extension

services to the farmers and the collection of information from the farmers. The CKWs receive

specific training on how to channel both folds of the information flow. On the one side they receive

further training on how to use, interpret, and communicate the information accessed through the

mobile applications, and on the other side they receive trainings on how to conduct surveys to

gather information from the Farmers.

Figure 14. Information Services provided by the CKWs


Figure 15. Cumulative Number of Surveys Conducted by the CKW


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Once the CKWs are selected, trained, and equipped with the smartphone, bicycle, and

marketing materials they start operating within their own communities. CKWs are requested to

dedicate between one and two hours a day to communicate and explain the program in their

communities, to sign up new customers for the program, and to provide information services and

conduct surveys to already registered customers. Figure 24 shows the evolution in the provision of

information services and Figure 25 the cumulative number of surveys conducted in the last two

years. The performance of the CKWs in executing these tasks is constantly monitored through the

smartphone and communicated to the headquarters of AppLab in Kampala. CKWs are paid

accordingly to this performance in a monthly basis through MTN money.

Once the farmers are explained the services, benefits, and functioning of the program they

proceed to the registration process. This process consists of 30 questions, of which 10 are dedicated

to complete BRAC’s poverty scorecard of the farmer and his/her household. Upon completion of

the registration process farmers are given a customer card with a registration number, which is

required to access the CKW services. The registration questionnaire is key for the overall success of

the program, as it allows the Grameen Foundation to create customer profiles that can be both

tracked over the time and linked to access to specific services. Customer profiles and their

information needs and requests are stored in a database accessible to the Grameen Foundation staff

for monitoring and evaluation purposes and for providing and selling information services to third

party actors.

The first step for the inbound fold of information is after being registered, farmers approach the

CKW with concrete questions about agricultural practices, weather forecasts, crop/livestock

illnesses, market prices, information about buyers, or information about input suppliers. Following

the request the CKW introduces the code of the concrete farmer and navigates through the menu of

the software installed in his mobile device to find answers to the farmer’s query. The intuitive

software allows the CKW provide accurate answers by selecting the particular crop, region and

other aspects and the result of the query is a detailed explanation of the answer that in certain cases

is accompanied by graphical examples of the problem and solution. In case the CKW struggles to

provide answers to the specific query by simply using the software, he/she can contact the regional

field officer for further support. If the regional officer also struggles to find answers through the

software, he/she can contact AppLab’s Question Box for additional support. AppLab’s Question

Box will first search in local databases and then in approved internet websites to provide answers to

the query. If all this fails, the Question Box can contact Uganda’s National Agricultural Research


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Organization for more support. Once the Question Box has an answer to the query, it will

communicate it to the field officer or directly to the CKW that is providing the service.

After the pilot of the program, the Grameen Foundation concluded that the outbound side of the

information flow should work in parallel to the inbound side. By conducting surveys at the same

time customers access information, the willingness of farmers to respond to personal questions

increases. The outbound information flow works as described in green in Figure 26. Third party

actors approach the Grameen Foundation to access information about farmers in the regions where

the CKW program operates. According to the information needs, the Grameen Foundation develops

the surveys that will be included and accessible through the mobile software. Once the survey is in

place the CKWs are trained on how to conduct it. After providing an information service to a farmer

the CKWs request them to respond to the survey, which is automatically filled and transferred

through the smartphone to the databases in the Grameen Foundation, where the surveys are

collected, sold, and delivered to the third party actors. Additionally, the Grameen Foundation also

uses the CKW program and structure to survey additional farmer needs and to test new potential

services addressing those needs.

Figure 16. CKW Operational Process



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Customer Segment

Grameen Foundation’s mission is ‘to enable the poor, especially the poorest to create a world

without poverty’, and the Grameen Foundation sees access to information and financial services as

the enabling means to reach this goal. The CKW program targets poor smallholder Ugandan

farmers earning less than $2 a day, both focused on subsistence and commercial agriculture. The

program particularly concentrates its efforts in targeting remote rural areas were access to

agricultural extension information is limited or non-existent, and in this way addresses the

information gap that currently exists in the agriculture sector. At the beginning of the program in

2009, 64 per cent of the Ugandan population lived on less than $2 a day (WB: 2012), which meant a

target market of 20.7 million people in that year. Since its inception the program has made a big

effort to reach this population segment and also to have a strong representation of women among its

customer.

Figure 17. Percentage of Very Poor Customers


Figure 27 shows the strong commitment of the CKW program to reaching farmers living on

less than $2 a day, who are defined as very poor by the program. Currently, the proportion of very

poor customers is situated over the 40 per cent mark, what means that over 25,000 customers are

living on less than 2$ a day. As mentioned above, and as shown in Figure 28, the program tries to

have a strong representation of women among its customers. Despite some challenges like the

inclination of households to register the head of household, who is usually male, the program has

managed to increase the percentage of females among its customers. Current levels of female

customers are situated at around 30 per cent, which means that over 17,000 women are reached.


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Figure 18. Percentage of Female Customers


Customer Need

As mentioned in previous sections, the agricultural sector employs 66 per cent of the Ugandan

labour force and the majority of agricultural production takes place on smallholder plots. Ugandan

farmers usually confront two main challenges:

• Low productivity yields caused by lack of access to information, like access to weather

forecasts or pest management treatments

• Low incomes, due to lack of knowledge of market prices and reduced bargaining power

All these factors have made of farming in Uganda more difficult in recent years. These factors

have contributed to an increased demand for extension services like weather information,

agricultural information, and disease management advice. Organizations serving rural communities

have often struggled to disseminate this knowledge due to several reasons, including the poor

infrastructure and high transportation costs of reaching farmers in remote areas, and as a

consequence smallholder farmers have remained highly under-informed.

Primary research points to weather information as primary critical need of the customers of the

program, as farmers see access to weather forecasts as a way to partially reduce the uncertainty

associated with weather risks and shocks. Access to information about market prices is also highly

requested, as a great part of the customers of the program form part of farmer groups and

associations and their bargaining power increases with access to market prices. As well, agricultural

and livestock-related information comprises another informational need of the customers of the

program. The information gap and the information needs of the customers becomes more evident

when discovering that the majority of customers had no previous means to access these kinds of

information before the CKW program started its operations. No other organization was providing

these kinds of agricultural extension services before, and farmers had no informal means to access


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this information.

Distribution Channel

Conventional delivery of agricultural extension services to poor farmers in remote areas by

government program usually has four main distribution challenges associated:

• Poor quality of traditional extension services

• Inadequate number of extension workers

• High cost of transportation to physically access farmers

• High incidence of regional language variations

Figure 19. Conventional agricultural extension services VS CKW


To overcome these challenges, the Grameen Foundation decided to create a network of

Community Knowledge Workers equipped with smartphones that use advance software for the

provision of the service (Figure 29).


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Figure 20. Cumulative CKWs Deployed and Retained


As Figure 30 shows, the program currently has around 800 CKWs to serve over 50,000

farmers. CKWs live and work in the same communities as the customers of the program, which

offers several advantages:

• Direct customer access to customized information via the CKW

• Interpersonal interaction between CKWs and farmers

• Translation of agricultural information into local languages in real time

• Increased regional access to mobile phones, which may be provided by the CKW in areas

where they are scarce

Additionally, the usage of CKWs as human interface to a technology backend contributes to:

• Deliver extension information remotely

• Overcome customer literacy and language barriers

• Leverage interpersonal interaction to explain information and respond to customer requests

• Build trust within rural communities

The Grameen Foundation seeks a specific set of characteristics in the CKWs to ensure the

quality and efficiency of the service provided to the farmers. These characteristics include:

• Agricultural experience

• Secondary education

• Fluency in English

• Able and willing to commit a minimum of 10 hours a week to CKW activities


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• Able and willing to travel within a range of 10 km radius of their house

• Entrepreneurial spirit

In regions where the program had no prior presence, the Grameen Foundation organises town

meetings with partners and farmers and the farmers nominate peer farmers as CKW candidates. In

those regions where the program is already operating, farmers interested in becoming a CKW

contact those already existing CKWs and if fulfilling the requirements they enter the selection

process.

After being selected as a successful candidate, the CKWs are enrolled in an initial training for

about two weeks. Here the CKWs will be trained on how to find, analyse and respond to the

information requests posed by the farmers. They are also trained on how to use smartphones and the

software developed by the Grameen Foundation, including how to do registrations and how to

conduct surveys. The Grameen Foundation uses a radio program to advertise the services offered by

the CKWS, which is combined with trainings for CKWs on how to market and communicate the

program to potential customers. Additionally, CKWs receive further training from the Grameen

Foundation in a monthly basis. During these trainings, the CKWs receive further training on those

issues that were not covered during the initial training and on particular issues like new surveys.

Every CKW is equipped with a smatphone, a charging solution for the phone, adaptors for

charging other farmer’s phones, a bicycle, a promotional T-shirt, business cards, marketing material

and technical support. In exchange, CKWs are required to meet certain targets:

• Provision of a minimum of 48 information services a month

• Registration of at least 4 new customers a month

• Complete and submit a minimum of 12 surveys a month (when surveys are required)

CKWs are paid through MTN Money direct to their phones according to their ability to meet

the aforementioned targets, although 35,000 UGX is the maximum amount that can be received by

a CKW. Apart from their achievement-based salaries, CKWs are always rewarded with 5,000 UGX

in airtime credit, even if performing poorly. This payment system has a clear private sector

approach and helps ensure the good performance of the CKWs.

A crucial part of the delivery channel of the program is the technology used by the CKWs. The

CKWs provide a two-way information channel, which has on one end databases and on the other

smartphones that allow information flows through voice, imaging, video and GPS. Additionally,

AppLab has designed, developed, and integrated software in the smartphones that allows the CKWs

both to answer the information queries and to collect data from the customers, like surveys.


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CKWs do not seem to face any major problems while promoting the services. However, they

face some persistent challenges while delivering the services:

• Long distance travels to conduct surveys, particularly during the rainy season

• Managing farmers’ expectations with respect to information they are surveyed about service

immediately after this being surveyed

• Technical issues like limited network connectivity and limited battery life or difficulty

finding a place to recharge their smart phones

The CKW program is attempting to address some of these challenges by installing a highly

trained and experienced Regional Field Officer, who can offer technical support, training, and

advice to the CKWs.

Customer Relationship

The Grameen Foundation acknowledges that to serve the poor, and particularly the poorest of

the poor, it is necessary to build a strong relationship of trust. By choosing local trusted farmers as

the distribution channel of the program, the Grameen Foundation makes sure that the program

builds and maintains a close relationship with its customers. This close relationship is important for

the provision of information services, and it is crucial for the success of mobile data collection and

surveys. That level of trust and close relationship, combined with the access to free information

services make the customers less reluctant to answer surveys that question their personal lives and

behaviours. However, even if the level of trust allows the Grameen Foundation to survey the

customers, CKWs are trained before each particular survey on how to communicate the objectives

of the survey to the customers and how to manage their expectations.

Value Added of the Service

The Grameen Foundation through the CKW program is providing services to disadvantaged

communities of rural farmers, who otherwise would have no formal or informal means of accessing

these kinds of information. The consequences of not having access to weather forecasts at a time

where the unpredictability of weather is increasing, is translated in bad harvest and a direct negative

impact of weather on income at the household level. In the same way, even if cooperating with

other farmers through groups and associations, the lack of access to markets prices hinders their

bargaining power with respect to middlemen, seeing themselves trapped in a spiral of disconnection

from the markets and uncertainty that also leads to reduced incomes. Additionally, the lack of

knowledge of possible treatments for pest and illness management of crops or livestock has direct

negative impacts on the economic activity of farmers, which can lose everything in a matter of days.


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However, even if some alternative services like Google Trader and Farmer’s Friends cover some of

the needs of the farmers, these don’t always have access to mobile phones and if so they are not

always willing to access this information through SMS based systems on their own phones.

The main value added of the CKW program is that it provides highly valuable agricultural

extension services to poor farmers for free in their own communities. Another important value

added, as pointed out by the farmers is the delivery channel used by the program. Farmers

acknowledge the differences in languages in the country and also the differences in comprehension

capabilities between different farmers. Through the use of local trusted farmers as the delivery

channel, the customers of the program feel confident that the CKWs will understand them and

spend the time needed to solve and explain their information needs, while feel more reluctant to

access this information through SMS or even a call centre. Additionally, farmers pointed to the

reliability and accuracy of the data provided by the CKWs as a value added of the service. By

knowing that they can access regularly reliable data, the uncertainty faced by the farmers has been

partially reduced and they can incur in riskier and more profitable activities that lead to economic

growth and poverty reduction.

Key Activities

There are eight key activities for the execution of the value proposition of the CKW program:

• Development and implementation of powerful user-friendly software that supports a two-

fold information flow, including the delivery of information services and for conducting

surveys.

• Careful selection of trusted peer nominated farmers to perform the role of CKWs.

• Initial and continuous training that helps ensure the quality of the CKWs and the quality of

their services.

• Investment and provision of operational and promotional materials to the CKWs.

• Strong partnership with content partners that ensures the quality of the data.

• Rapid research, piloting, impact evaluation, and implementation process of new services.

This helps address remaining needs of the customers and access external funding to support

the piloting and launching of new services.

• Development of a two-way information flow that allows the Grameen Foundation generate

the necessary revenue to keep providing the information services for free to the customers.

• Fostering a close relationship between the Grameen Foundation and MTN. The relationship

between these two main partners allows a high level of communication between them and


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facilitates the design and implementation of new services to the farmers.

Key Resources

In terms of the key human resources, the Grameen Foundation relies on a good team of well-

trained agronomists, business and development consultants and software developers in its

headquarters. The quality and combination of profiles in headquarters is key for the development of

successful and profitable services that target the needs of poor Ugandan farmers. Additionally it has

agronomists and experience professionals as field officers of the CKW program. The field officers

of the program have professional experience working for the government or development agencies,

this experience gives them the necessary knowledge to solve the majority of the problems faced by

the CKWs while at the same time being connected to the reality on the ground. The CKWs are also

key human resource of the program, as they are experienced farmers with knowledge of the local

needs combined with an entrepreneurial spirit that allows them the achievement of the commercial

targets.

In terms of physical resources, the smartphones are the most important resource of the CKW

project, as it is the main source of knowledge of the CKWs. The importance of these handsets is

acknowledged by the Grameen Foundation and in case of loss of theft the Grameen Foundation

makes itself responsible of replacing the handset to the CKWs. Another key resource is the

databases where the information is stored, including both the information necessary for the

extension services and the data gathered from the surveys. MTN’s mobile network is the last

physical resource that helps achieve the value proposition, without the network such

communication with rural and distant areas of the country would be impossible.

The section covering the value proposition mentions the relevance of the data quality as one of

the main value added of the services to the farmers. This means that data quality assurance and

reliability of content partners is key for achieving the value proposition of the service. This

highlights the importance of selecting good and reliable partners as content providers.

e. Partnership Model

The development of strong partnerships has been since the beginning of the CKW one of the

key drivers for the success of the program. This strong partnership model was particularly relevant

for the initial content development needed by the program, as the Grameen Foundation has

developed applications and content that addressed the needs and requests of some of the partners.

From all the initiatives researched during this consultancy the CKW program leverages the greatest

amount of partnerships, being it a referent among M-Agri initiatives in the African continent.


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Additionally, it presents a clear differentiation between the two types of partnerships leveraged:

anchor partners and content partners.

The main partner of the Grameen Foundation for the CKW program and for the operations of

Uganda’s AppLab in general is MTN Uganda. The Grameen Foundation and MTN Uganda

maintain a close partnership based on mutual benefits and trust. MTN started its operations in

Uganda in 1998 and is the leading mobile phone operator in the country with over 45 per cent of the

market share. Since its inception the AppLab has been based at MTN Uganda’s offices and has

closely developed services and applications that could benefit the interest of both partners. MTN

Uganda mainly benefits from exploring new potential business lines while building trust in poor

rural communities and exploring an untapped target market. On the other hand the Grameen

Foundation benefits from MTN’s financial support, network infrastructure, facilities, technical

support, and MTN’s good brand image among rural populations to introduce the new services.

The Grameen Foundation currently has five anchor partners, including MTN. The role of the

anchor partners varies for each particular case, depending on the level of agreement and

commitment of the partner. However, there are a few common characteristics to all the anchor

partners: they show a high level of commitment with the Grameen Foundation and the CKW

program, and they contribute to the program economically or in kind; they also contribute to the

creation of new applications, services, or surveys to the customers of the program; and some of

them pay Grameen for conducting surveys or providing relevant information about the customers of

the CKW program.

The National Agricultural Advisory Services (NAADS) is one of the main anchor partners. It is

the extension arm of the Ministry of Agriculture, Animal Industry, and Fisheries, which aims to

increase farmer access to knowledge, information, and technology to promote profitable agricultural

production. NAADS is key for the poverty eradication plan of the Ugandan government and it has a

countrywide network of extension workers. One of the main contributions of NAADS to the project

has been its contribution of a number of workers to perform the role of CKWs.

The World Food Program (WFP) is another key anchor partner. The WFP has mainly

contributed to the success of the CKW program by recruiting, training and supporting CKWs. The

WFP has also promoted farmer groups and associations in the regions where the CKW program

established its operations and this helped ensure the positive effects of access to information like

market prices. Additionally the WFP has contributed to the CKW program by developing

information services and data collection surveys.


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A part from the anchor partners, content partners have an important role in the success of the

CKW program. The latest studies point to 26 content partners, which contribute with valuable

content to the program such as agronomic information or weather forecasts. The Grameen

Foundation usually pays for information from the content partners to provide it through the CKW

program to poor farmers. Busoga Rural Open Source and Development Initiative (BROSDI) is

among the main content partners. BROSDI has contributed to providing technical information and

farming techniques to some of the services provided by the CKWs and some others like Farmer’s

Friend, an application developed in a partnership with Google. The Ugandan Meteorological

Department has also contributed to the CKW program by supplying weather information and

forecasts. FIT Uganda is another content partner that contributes to the program by providing

market price information for 42 commodities in 20 districts.

One of the most remarkable characteristics of the Grameen Foundation in terms of leveraging

partnerships is the requirements expected from the potential partners. The most important

requirement is that partner organizations must share the goal of the Grameen Foundation of

targeting the poorest of the poor. Additionally, it is highly desirable that potential partners share the

importance of impact assessment. The last requisite is the willingness to contribute to the program

economically or in kind. By making sure that the partners share some of its most important values,

the Grameen Foundation avoids having potential disagreements that could challenge the overall

success of the program.

f. Performance of the CKW Program

Cost Structure

Due to lack of hard data on costs, the task of analysing the cost structure of the CKW is

particularly challenging. As pointed out in an interview with Jill Shemin, partnership development

specialist at Grameen AppLab, the average cost per customer of the program decreases as the

number of customers increase.

The CKW had no initial costs associated with the mobile network structure, as its usage was

offered for free by MTN. Some of the major initial costs of the CKW program are associated with

the costs of the materials provided to the CKWs. These include the smart phone, a charging station,

a bicycle, and the promotion materials. At the beginning of 2011 the cost of this package was

around 500 U$, of which half was recovered by the Grameen Foundation by levying fees on

CKWs’ salaries. This cost has been reduced since the prices of the smart phones have dropped from

450 US$ to 150 US$ at the end of 2011. At the beginning of 2011, there were 282 CKWs, what


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would mean an initial cost of 141,000 US$. In the period between the first quarter of 2011 and the

first quarter of 2012 the number of CKWs rose by 574, what would mean initial costs of 114,800

US$ considering the drop in the prices of the smart phones. Additional initial investment costs

include the development of the supporting software and applications needed to run the CKW

program.

The biggest costs associated with the program are its operational costs. At the beginning of

2011, when Uganda’s AppLab employed only 30 staff and 300 CKWs the year expenditure in

salaries amounted for roughly 1,000,000 US$. AppLab’s team has increased during last year and it

now employs 40 staff including field officers, and 856 CKWs. It is difficult to give an estimation of

the current operational costs, but previous figures point to high levels.

Revenue Structure

Since the inception of the CKW program, the information services have been offered for free to

the farmers. However, the Grameen Foundation is exploring new premium services that will be

provided to the farmers for a certain amount. These services and their pricing model still need to be

defined. As the vast majority of M-Agri initiatives, the initial phase of the project has strongly

relied on external donor funding to cover the costs of providing the information services. After the

pilot phase of the project, he Grameen Foundation was granted $ 4.7 million from the Gates

foundation to implement and expand the program to other regions in Uganda. However, this 4-year

grant cannot cover the operational cost of the program indefinitely.

The Grameen Foundation has also explored other sources of revenue apart from donor grants to

ensure the sustainability of the initiative in the long run. This effort becomes visible in the outbound

information flow. Since the pilot of the program the Grameen Foundation has explored data

collection through surveys for anchor partners and other organisations as a revenue generating

activity that offers sustainability to the business model. Given the size and the technology of the

program, surveys conducted through the CKWs are offered for half of the price that would cost to

third party actors to run that kind of activity in a conventional way (6-10 US$). Organizations pay

approximately $ 5 per survey conducted through the CKW network, what means that the Grameen

Foundation has made revenues of around 140,000 US$ through surveys during 2011 (Figure 31).


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Figure 21. Revenue generated through surveys


As the customer base and experience of the program keeps augmenting, the opportunities to

generate revenue from the available customer information also increase exponentially. AppLab has

recently launched a self serve service, that offers partner organizations with field staff and mobile

phones training on survey design and implementation through phones, as well as the development

of a salesforce. Additionally, AppLab is finalising the design of data mining services that pretends

to sell to partner organizations. As these services are still in the design and pilot phase it is difficult

to assess the amount of revenue they will be able to generate.

Profitability

The CKW program has not reached the break-even point so far. As the majority of M-Agri

initiatives that provide information services to poor farmers it has heavily relied on external funding

and struggled to generate direct revenue from customers. Acknowledging these factors and aiming

to be self sustainable, the Grameen Foundation has pioneered in exploring alternative ways of

generating revenue through selling customer information to third party actors. The advanced survey

system offered by the CKW program has witnessed an increased and steady growth since it was

introduced. This service combined with new services like data mining services or the self serve

service offer a good alternative to generate enough revenue to cover operating costs in future years.

The Grameen Foundation estimates that as the customer base increases the cost per customer will

drop and the revenue generated through selling customer information to third party actors will

increase. This is expected to result in the achievement of the financial break-even point by 2013.

Impact

As argued in previous sections, the Grameen Foundation puts particular emphasis on evaluating

the impact of farmer access to those information services provided through the CKW program on


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poverty reduction. Even if the Grameen Foundation follows a rigorous impact monitoring and

evaluation, and given the young stage of implementation of the initiative, it results particularly

challenging to link access to specific information on poverty reduction. Despite these challenges the

Grameen Foundation has in place an effective system for impact monitoring and evaluation that can

lead to initial conclusions about the impact of the CKW program on the lives of the customers.

As mentioned above, the registration process consists of a 30 questions questionnaire of which

10 are specifically focused on identifying the level of poverty of the particular customer. Through

these questions the program builds a customer profile and every time a registered customer poses an

information query to a CKW, the query is automatically linked to its profile. Over the time the

profile of the customers is adapted, which helps the CKW program link access to specific services

with the evolution of the poverty levels of the particular customer. Additionally, the Grameen

Foundation also conducts focus groups and direct surveys that aim to analyse the impacts perceived

by the customers of accessing particular information services.

Through primary research and focus groups with customers of the CKW program, this study

learned that farmers identify two major impacts of the program in their lives: increased revenues

and increased productivity. For those farmers that belong to groups and associations, connection to

buyers and access to information about market prices has contributed to improve their incomes in

two ways. By knowing the prices of the markets, farmers can decide to store their harvest and wait

for a favourable moment to sell it in the markets and in case of depending on middlemen for selling

the harvest their bargaining power is increased. The productivity of the farmers is also increased in

two ways: by having higher yields and by reducing losses. By accessing improved agronomic

techniques and inputs farmers benefit from higher yields. Access to weather information helps

farmers identify favourable moments for planting and harvesting, and by accessing early detention

and treatment of crop and livestock diseases they are able to reduce losses and ensure the higher

performance of their yields. All this is directly related to an increase in the levels of food security of

farmers that harvest more food and/or make more money from the sales of products allowing them

to buy more food (Figure 32).


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Figure 22. Impact of the CKW Program on Food Security (518 farmers survey)

Source: CKW (2011b)

Recent studies conducted by the Grameen Foundation argue that a proportion of the farmers

have increased their understanding of farming as a business and have taken steps forward like

starting a new farming enterprise or started storing the production at a warehouse to benefit from

high prices in the markets (Figure 33). In addition to the increased revenues, farmers are benefiting

for improved decision making for crop selection and utilization and this is translated into reduced

costs.

Figure 23. Actions taken by farmers accessing CKW information (518 farmers survey)

Source: CKW (2011b)

Apart from the direct impact evaluation the Grameen Foundation emphasizes the control over

the data collection process and data quality. In this way the CKW program ensures the

maximization of the impact of the services provided to poor farmers. The vast majority of the

farmers interviewed in this study highlighted the high accuracy of the services provided by the

CKWs, particularly in the cases of weather forecasts and disease identification and treatment. For

the case of information of market prices the majority of interviewed farmers mentioned its accuracy


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to the real prices in the markets, but one farmer argued that the reality did not always match the

information provided by the CKWs.

The customers of the CKW program seem to be overall satisfied with the current offer of

services. However, when asked about possible improvements in the services that could increase the

impacts in their lives and their economic activity they mention two things: access to transportation

facilities and access to finance. The small size of the farmers and their remoteness suppose a big

challenge when sending their products to the markets. Access to reliable and affordable means of

transportation combined with the already in place access to market prices would contribute to

increase even more farmers’ revenues. Finally, access to loans and financial services is seen as a

necessary step to incur in riskier and more profitable farming activities. The Grameen Foundation is

currently researching different ways of promoting access of farmers to financial services as a way to

improve the current impact of the program in the lives of the farmers and poverty reduction.

Competitive Advantage

Given the fact that the CKW program has no real competition it has several advantages,

resources and capabilities that comprise its competitive advantage. Since its partnership with MTN

and as the number of customers of the program has been increasing, the overall costs of providing

the services has been reduced. As the program keeps growing it will reach economies of scale and

the costs will be substantially reduced, giving the Grameen Foundation a strong cost advantage over

any potential competitor in the country. In terms of differentiation, the CKW program offers an

innovative combination of human distribution channel combined with smartphones and a two-fold

information model for revenue generation that will be difficult to be imitated by any potential

competitor. By its current research in financial services and the use of the CKW structure for the

rapid implementation of these services the Grameen Foundation can benefit from the early entrance

advantage and consolidate its competitive advantage compared to possible competitors in the field

of mobile information and financial services to the poor in Uganda. Additionally, MTN and the

Grameen Foundation through the CKW program are building a strong reputation among

unprivileged rural communities, what would suppose a clear advantage against potential

competitors.


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SWOT Analysis

Strengths: • Quick and effective process of research, piloting and impact

evaluation. • Emphasis on data collection and quality. • Innovative two fold information flow Customers-Grameen

Foundation-International Organizations. • Revenues generated by selling customer information to third

party actors are increasing rapidly and have reached levels of over 160,000 US$.

• As some of the services are designed as requested by an anchor partner, they can contribute economically to its design and implementation.

• The explicit and clear focus on targeting the poorest of the poor and impact evaluation facilitates access to external funding.

• Unique initiative in Uganda providing all the services combined to the target market.

• Pioneer initiative in the research of new financial services that target the poor.

• Strong partnership between the Grameen Foundation and MTN, key piece for success as MTN is well known and trusted by the farmers.

• Close governance of the initiative by MTN and Grameen Foundation is key for the sustainability of the program.

• The use of local peer nominated farmers as CKWs helps overcome the barriers resulting from having a variety of local languages, and increases customer trust in the program.

• The provision of free services through the CKWs promotes customer trust and loyalty.

• The fact that farmers trust the CKWs facilitates their task of conducting surveys and gathering customer data.

• Rigorous follow up of the evolution of the information needs of the farmers in the database.

• The use of smart phones allows the provision of a variety of innovative services.

Weaknesses: • High initial costs of the CKW tool-box, that include a smart

phone, a charging station, a bicycle, and marketing material. These costs amounted for 500$ at the beginning of 2011 and have now been reduced to around 200$.

• High operational costs (over US$ 1M) derived from maintaining an HR structure of 40 staff and over 800 CKWs.

• Difficult to be replicated in other countries due to the reliance on human assets.

• An additional investment is needed to adapt the service to new country contexts.

• Initial need for external funding during the research and pilot phases.

• Physical limitations for CKWs to deliver the service to farmers, like travel distances, particularly during the rain season.

• Physical limitations also affect field officers, as they may have to attend several CKWs simultaneously with technical problems.

• The main marketing of the program comes from the CKW himself, who introduces the program to the farmers in his/her region.

• Access to electricity to charge the phones may be challenging for some CKWs. CKWs are usually farmers and some may live in places without regular access to electricity.

• Needed for investment in financial literacy training for the new financial services.

Opportunities: • The combination of surveys with new services like data mining

can generate enough revenue to break-even by 2013. • Surveys and data mining services can make of AppLab a

referent for these kinds of services in the sector, as they help reduce the research costs of IOs.

• The information about customer profiles and behaviours acquired through the CKW program can reduce costs of developing other services to the poor like financial services.

• AppLab can become an effective incubator of mobile services that can help identify those services with greater impact potential.

• The rigorous impact evaluation of its services makes AppLab more likely to receive grants from IOs supporting its operations.

• Through targeting groups of farmers previously grouped by organizations like the WFP or FAO, the informational services can be more effective and have a greater impact in the lives of the farmers.

• Applab can promote farmer groups in those locations where WFP/FAO have not operated so far to insure the impact of the program.

• The financial literacy training can potentially create a demand for other financial services, and open a door for new partnerships.

• The presence of AppLab in various countries can facilitate the knowledge share across them and promote the expansion of the program to these new locations and regions.

Threats: • As farmers access a combination of different services, it is

difficult to establish the link between access to specific information services and poverty reduction.

• If farmer’s expectations are not well managed, surveys can create uncertainty, letting the farmers expect access to new services in a short period of time, and if not received, this can lead to customer dissatisfaction.

• Lack of literacy and access to mobile phones challenge the implementation of direct services to the farmers through the mobile phones, what would help to reduce the operating costs.

• As the AppLab covers the expenses of replacing lost/stolen marketing/operational material, exists the risk that CKWs may claim fake loses or thefts of their smart phones to receive new ones.

• Low incentives to CKWs can affect negatively their motivation to provide on time and accurate information.

• By only using the CKWs as source for marketing, a big proportion of the target market may not be reached.


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g. Future Steps

In the period between 2012 and 2013 the Grameen Foundation is planning to put forward an

aggressive strategy towards a cloud-based platform (Figure 34). With this strategy the Grameen

Foundation aims to save costs, increase gains in flexibility and efficiency, and create a cloud that

are easy to scale horizontally across the African continent. To reach this goal, on the server/backend

side the Grameen Foundation will move its services to the cloud (moving computation, software

applications, data access, management and storage resources to a remote, online accessible location)

and get rid of the middle tier over the time, and in the client side it pretends to improve the

applications to improve and maximise the usage of data and power. This period will also focus on

increasing the integration of third party actors and the integration of those mobile financial services

developed by AppLab’s Mobile Money incubator.

Figure 24. Technology roadmap at glance (2010-2012)

Source: CKW Dashboard (2012)

“Agriculture is the main source of livelihood for poor people in much of the world, including more

than 75 percent of Ugandans. Through the Community Knowledge Worker initiative, we are

helping poor, smallholder farmers, who may meet with an agricultural agent infrequently, access

vital agricultural advice, weather forecasts and other information to improve their lives”

(Alex Counts, President of Grameen Foundation: 2009)

1. m-agri information services through ckws: the case …api.ning.com/.../grameenckwuganda.pdf ·...

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