Global Citizenship Report 2017

Encouraging Financial Inclusion Through Digital Solutions Although the traditional banking infrastructure in many devel- oping countries is limited, mobile phone use is often high. As a result, digital solutions such as mobile payments are growing in popularity. This technology increases transparency and efficiency, which can aid in humanitarian relief efforts and encourage financial inclusion by increasing access to loans and other financial products. In addition, mobile technology can help bolster financial inclusion because it is often more affordable and widely available in rural areas where people might not have convenient access to a traditional bank. Citi supports this kind of technology through a range of efforts. One example is our engagement with One Acre Fund, a nonprofit organization that offers microloans to smallholder farmers in East Africa. The loans give farmers access to financing for farm inputs — primarily seeds and fertilizer — plus training in agricul- ture techniques and ways to better market their products and maximize their profits. In 2014, in partnership with Citi through our Citi Kenya and Citi Inclusive Finance units, One Acre Fund introduced the use of the digital mobile money service M-Pesa for loan repayments, replacing the previous cash-based system. In the cash-based system, farmers would make weekly microloan repayments to their One Acre Fund field officer, who would transport and deposit the collected cash. It would take up to two weeks to update loan balances and reconcile bank statements, in a process prone to uncertainty, inefficiency and insecurity. After the transition, farmers using the digital mobile money service instead of cash to make loan repayments reported a unanimous preference for the digital payments, due to their convenience, transparency and safety. In addition, farmers and One Acre Fund were freed from the burden of a long process with higher costs and a system that was much more prone to fraud. The platform is now being rolled out to additional countries. In 2017, the Better than Cash Alliance, which is based at the UN, published a case study on the Citi solution for One Acre Fund. Through the use of digital solutions to increase financial access in underserved areas, Citi is working to support SDG 9 , which aims to build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation. Our work to help One Acre Fund transition to its current digital payment system demonstrates our ability to contribute effectively to target 9.3 , which aims to increase the access of small-scale industrial and other enterprises, in particular in developing countries, to financial services including affordable credit, and their integration into value chains and markets, and to target 9.A , which focuses on facilitating sustainable and resilient infrastructure development in developing countries through enhanced financial, technological and technical support to African countries among others. SDG SPOTLIGHT: GOAL 9 Industry, Innovation and Infrastructure 100% preference for mobile repayment over cash, according to a 2015 survey of 250 farmers 85% decrease in losses from repayment fraud (dropping from $17,500 to less than $3,000 in one year) 2-4 DAYS total repayment processing time, down from 16 days 80% decrease in repayment collection costs 46% decrease in the time field officers spend on collection activities BENEFITS OF ONE ACRE FUND’S TRANSITION FROM PHYSICAL CASH TO DIGITAL REPAYMENT 28