Mastercards’ digital ordering platform: Andhra Pradesh farmers may get digital system to connect with wholesalers
Mastercard stated on December 7 that it plans to launch a similar but inverse system for farmers in Andhra Pradesh by March next year. (AP Photo/Alastair Grant) Mastercard stated on December 7 that it plans to launch a similar but inverse system for farmers in Andhra Pradesh by March next year. (AP Photo/Alastair Grant)
While launching its digital ordering system Kionect, which allows small kiosk owners in Nairobi to order products from wholesalers and pay through various means such as cash and e-wallets, Mastercard stated on December 7 that it plans to launch a similar but inverse system for farmers in Andhra Pradesh by March next year so that they can sell their produce to wholesalers easily and with transparency.
Kionect is currently being piloted with over 1,000 micro-businesses in three of Nairobi’s informal settlements — Kibera, Kawangware and Kariobangi — in partnership with Kaskazi, a for-profit wholesaler and distributor. Kionect provides a digital log of transaction data that qualifies these Kenyan micro-retailers for loans from Musoni, a regional micro-finance provider, to stock inventory. With every loan that is paid on time, the kiosk owner has the opportunity to take out a larger loan for a longer term.
“I am interested to bring this to India. In India, some of the brokers (in the farmers’ selling chain) are taking 70 per cent of the value for those few services that they are doing. We need to create a balance between their earnings as compared to the farmers’ earnings,” said Michael Elliott, vice-president Mastercard Labs for Financial Inclusion, in Nairobi on December 7. On October 5, global payments technology major Mastercard and the Andhra Pradesh government signed a pact to create a “digital ecosystem” in the state.
“I was there (in Andhra Pradesh) two weeks ago. I am going there again after two weeks. We have got all the buyers, big brokers, the government departments, the financial institutions, in one room and figure out how and when we can do this, with an idea of launching it during the next quarter,” Elliott added.
According to Elliott, the Kionect digital system provides three major advantages: it introduces less uncertainty in the supply chain, the order given by the kiosk owner is exact and it lets the kiosk owner to have a credit history that can help him get a short term loan easily. “The same advantages can be given to the farmers in India too,” he added.
“From what I have seen in Andhra Pradesh so far, it is that 80 per cent of this (Kionect) digital system would relatively be the same. The remaining 20 per cent of this would have to be tweaked and tailored…” Elliott added.
Mastercard is also in discussion with other states in India to launch such digital financial systems. “I am travelling around in a couple of different states and the discussions are at an early stages. We have had discussions with Confederation of All India Traders (CAIT) … They are helping us think through as to how to bring this to market in India.” Elliott stated.
For all the latest Business News, download Indian Express App