E-wallet and agriculture

4 Minutes

There have been various ideas or applications connecting electronic identification and agricultural transactions (i.e. farmer's card, agri-registry etc), however the one that stands out is the Electronic Wallet System (or e-wallet), as developed in Nigeria. It was first introduced in 2012 and, through it, subsidized electronic vouchers for inputs were delivered directly to the farmers' mobile phones and then the vouchers were used like cash to purchase the inputs directly from agro-dealers.

Rewind: In the 1960s, before it turned to oil, Nigeria was one of the most promising agricultural producers in the world. Between 1962 and 1968, export crops were the country's main foreign exchange earner. Since then, Nigeria has dropped in the agricultural indexes. Taking into account the need to modernize agriculture and manage its vast workers' capacity combined with small-size holdings, new solutions had to be given. However, a large proportion of these inputs could not reach farmers, as a result of the high level of corruption, insincerity and political interruption in the distribution channels.

With support from the Nigerian national government and state governments and in partnership with others in the private sector, an organization called Cellulant spent two and half years developing a mobile wallet network that extends to tens of thousands of villages and some eight million farmers. Of these, approximately three quarters are active users of this digital financial service receiving direct subsidies. Several attempts had been made over the years to boost farmers’ productivity, among which are supplying farm inputs (such as improved seeds, agrochemicals and fertilizers) at subsidized prices to the farmers. With the government being no longer in the business of procuring and distributing fertilizer and instead transferring cash directly to smallholder farmers, these producers could shop for their own fertilizer through a newly created market of private-sector agribusinesses.

The e-wallet approach is designed for smallholder farmers. The criteria for farmer’s participation include:

  • farmers being above 18 years old;
  • having participated in a survey authorized by the government to capture farmers personal detailed information;
  • owning a cell phone with a registered SIM card with a minimum credit in the cell phone;
  • attending training programmes designed for the project
  • The fulfillment of these conditions guarantees the issuance of an e wallet voucher to the farmer. The voucher is used to redeem fertilizers, seeds and other agricultural inputs from agrodealers at half the cost.

Benefits and drawbacks of e-wallet The main benefit was and is the fact that farmers can access subsidies directly, something that had not been achieved in the previous years. Using mobile phones as a platform to conduct basic transactions and make payments. a private market for agricultural inputs is promoted pushing prices down: According to CGAP’s Focus note, the direct subsidies have helped up to twice as many farmers (at a sixth of the cost) and fertilezers' cost hase been cut to half. Through a national incentive system, key agricultural sector participants, including farmers, may access finance at single-digit interest rates, using innovative forms of security for their borrowing. For example, agro-dealers can borrow using stock as collateral and previous trade history as a reference. For their part, farmers can borrow as groups using mechanisms such as cross-guarantees. Proof that this has worked so far is that, between March 2012 and today, Nigeria has injected more than $122 million in loans to key agricultural sector participants. Finally, e-wallet was built on a large database that now includes 10.5 million farmers, creating the opportunity to link, through data, unbanked farmers into the financial mainstream and encouraging providers to view them as potential clients.

Dubbed as Growth Enhancement Support Scheme (GES), e-wallet, based on a study, had the following positive impact on Nigerian agriculture:

  • A huge proportion of the respondents did not benefit from any agricultural innovation/production intervention before the e wallet approach.
  • Quickened accessibility to improved seed, access to fertilizer, and subsidized farm input and renewed confidence in government programmes.
  • Participation in e-wallet led to increased output and increased quality of maize/rice production by 67.0% of the respondents.
  • Only 10% of the respondents indicated that participation in e-wallet actually increase their farm size.

However, a few challenges had to be tackled:

  • Low level of awareness by the farmers; this might result from the restricted source of information being utilized by them.
  • Insufficient fertilizer supply; it is a result of failure on the part of agro dealers to order and supply fertilizer from the manufacturing company.
  • Cumbersome procedure of getting approval from cellulants.
  • Low density coverage of agro-dealers; this might result from insufficient information in getting more agro dealers involved in training and registration for the program.
  • Poor telephony network; a major challenge of most of the telephone subscribers in Nigeria.
  • Insufficient seed supply.


  • Bolaji Akinboro (2014), Bringing Mobile Wallets to Nigerian Farmers, CGAP, http://www.cgap.org/blog/bringing-mobile-wallets-nigerian-farmers
  • Lilian Mutegi (2015), Nigeria: How an Innovative E-Wallet Technology Moved to Wake Nigeria's Agriculture Sector, allafrica, http://allafrica.com/stories/201509280351.html
  • agroNigeria (2015), FG Debunks E-Wallet Scrap, https://agronigeria.com.ng/fg-debunks-e-wallet-scrap/
  • Emmanuel Elebeke (2016), FG targets 30m farmers with e-wallet scheme, VanGuard, http://www.vanguardngr.com/2016/02/fg-targets-30m-farmers-with-e-wallet-scheme/