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IGF 2020 - Day 6 - WS163 Access Challenges among Rural Communities & Local Solutions

The following are the outputs of the real-time captioning taken during the virtual Fifteenth Annual Meeting of the Internet Governance Forum (IGF), from 2 to 17 November 2020. Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid to understanding the proceedings at the event, but should not be treated as an authoritative record. 




>> MODERATOR: By my watch, it is now 12:20 which is the official starting time for this event.  I would like to welcome you to the workshop on Access Challenges among Rural Communities & Local Solutions.  I'm Christopher Yoo from the University of Pennsylvania.  I'll be the moderator.  As is the case for all events, I want to confirm everyone's understanding that this will be conducted under the IGF rules of participation.  I'm making sure we're all aware of these issues or concerns about privacy and accessibility.

Most importantly, we're here, the reason we're convening this event is on a meeting one rural connected, it was determined to gather empirical information and evidence about innovative ways to bring the benefits of the internet to more people around the globe.  It is a labor of love that yielded a database of over 1100 entities and case studies which are published on our website of more than 125 now.  If you're interested in that, please consult, one being the number 1, not spelled out in letters and you can see the write‑ups on today's projects led by today's speakers and others.  We're could go an event on Thursday on data gaps for measuring progress which we invite you to attend as well.

The reason why we put today's panel together, it is that we became convinced that the more authentic and most important voices that are often left out of the conversations are the founders and the leaders of the projects who are actually doing the work on the ground.  I think there's important work done by different people in all levels of the enterprise that serve the goals we all share, but I have some concerns about it can be that the people who have the insights, the on‑the‑ground real world insights of the opportunities, the challenge, the realities of bringing these projects to life can be not given the prominence or the opportunities to showcase the fantastic work.

This is to bring together three ‑‑ was originally scheduled to bring together throw outstanding examples of this.  We have with us today Mary Olushuga, founder of the African women power network and Michael Spencer, founder of smart money international that will share their experiences in bringing in this case‑based initiatives to rural areas and we look forward to that very much.

The third speaker it had who was to be had a last minute conflict and won't be able to attend.  We're delighted to have both Mary and Michael here today to share with us their experiences.

>> MARY OLUSHOGA: Thank you for having us.  Thank you!

>> MODERATOR: Since you're off mute, we'll start with you.

A first thing we would love to do is start with a basic introduction to your initiative about what you are doing, what the goals are, how you are doing it?

>> MARY OLUSHOGA: Hello, earn.  Welcome to this incredible session.  Thank you so much for putting it together.

I'm Mary Olushuga and I'm founder of a WP network, I founded a WP network in 2012 and one of our first initiatives was working with Nigeria, I'm from Nigeria, helping the young students there put together their business plans.  We received funding at that time and we sort of evolved over time where I was able to secure funding from planet earth institute, the organization planet earth institute, it no longer exist, it is morphing into something else, a different organization. 

The initiative here, what this conversation will mostly be about, it was working with women farmers in three rural communities, trying to help them to improve on their agricultural practices to improve their yields and also to help them improve their crop productivity.  That's basically what that project was about.

It is currently an ongoing product that's morphed to something else which I would love to talk about as well.

I started that project in 2014, two years after starting the AWP Network and currently it has morphed into basically working with women cooperatives and farmer, women, helping them to create sort of products that they can put on the shelves and we have been able to establish a collaboration with Shoprite Nigeria.  It is our goal to continue to build upon relationships with larger retailers so that a lot of the farmers have somewhere to sell their crops.

>> MODERATOR: As I understand it though, you have expanded beyond just the agricultural education into some other aspects.  I wondered if you could share those with us as well?

>> MARY OLUSHOGA: Of course.

Like I said, we have currently ‑‑ we're currently building one of the largest vender databases in Nigeria, our focus definitely is women in Africa, specifically women in Nigeria.  So we're working with women entrepreneurs in Nigeria who manufacture products, women farmer, those that own farms and have created an end product.  If someone has a fish farm, for example, they probably plan to sell smoked fish or smoked cat fish, they have packaged it properly, everything like that so what we have done currently is built a relationship with Shoprite Nigeria, currently one of the largest retailers in Nigeria so that a lot of these women can put their products on the shelves.  It is our goal and intention to build one of the largest vender databases in Nigeria and so far that's going well, actually first cohort of women will be pitching to Shoprite on Thursday and that's exciting and we're looking forward to that.

I think you're on mute, Christopher.

>> MODERATOR: Occupational hazard.  I wish I could say that's the first time that's ever happened.

Michael, let's bring you in, smart money is doing fantastic work in the world of financial inclusion.  We would love to hear about it.

>> MICHAEL SPENCER: Thank you. 

Thank you to you and the team for being such terrific champions of this kind of grassroots work.

I think you're quite correct, unfortunately the implementers don't have much of a voice in the global conversation and there are so many learning that I think are important for others to hear.  I'm very excited to hear about Mary's experience with her training on the ground, her rural empowerment, I'm sure we have very similar experiences and it will be interesting to see those patterns come out.

Smart money is a digital banking solution that is focused on rural communities.  We started our business in about 2010 in rural Tanzania and expanded now in rural Uganda and that's really where we focus our operations today, rural Uganda.

We promote savings as a pathway to prosperity and we do this by providing a digital wallet, combined with a very unusual form of grassroots financial education and that's really the area of our business that is our greatest focus, it is the educational component.  We're a for‑profit business and we generate revenue by investing our customer deposits and also by charging fees to larger institutional customers.  We take an ecosystem approach so there are many different stakeholder groups in our community, including farmer, villagers, teachers, church member, but also larger institution, agriculture companies such as cotton and coffee, makers, churches and communities and schools.  A community‑wide approach to the solution.  We have gone 200,000 digital wallet holders in Uganda and through our education program we helped them to save money that they ultimately invest in new‑income generation, this includes investment in children education, expanding farms, buying inputs for farming, so forth, the goal being, of course, more income.  We believe more income is the necessary component of poverty reduction.

Along this journey, we pivot many times as it sound like Mary has as well as we encountered realities on the ground, looking forward to sharing some of that information with everybody.

>> MODERATOR: Let me draw out a little bit as you're talking this.

I know from our previous conversation, including a podcast interview we did with you before that there is at least two separate components, part of it, it is marketing to promote the take‑up both with the individuals but also the merchants and also trading.  Can you tell us about that, with marketing, you have done innovative things.

>> MICHAEL SPENCER: Thank you for that.  Right.

We don't speak so much about the marketing component any more.  We focus much more on the training.  You're absolutely right.  The marketing, it is key.  Let me try to frame what we're doing here.

Whether it is marketing or training, the goal, of course, it is customer acquisitions.  I don't care how great your fintech is, your business model is, if you can't acquire customers, you don't have a business, it is that simple.

Now, in the west customer acquisitions for a company like Facebook is relatively easy, they don't have to advertise, word of mouth, people sign up, it is free, they love it.  Right.  People assume that it is that easy in Africa.  Of course, it absolutely is not.  For a whole variety of reasons, the first challenge, of course, awareness.  Your customers in rural communities aren't on Facebook, they probably lack internet access, they probably don't have a television so they're not able to see any television‑based advertising.  There is no billboards at the top of mountain, you can't use traditional display advertising.  How exactly do you communicate to your target market what the brand is and who you are?  It is very, very difficult!  Actually have to go to the top of the mountain and you have to sit down and talk with people.  If you are doing this over a vast geography, it becomes extremely expensive very, very quickly.  So we found that from a marketing point of view it was necessary to gain efficiencies in this sort of brand awareness building by aggregating the population.  We found the best way to do that, the most efficient way to do that was through road shows.  You see this being done already by large Telecom companies and politicians, you know, they'll go into a community, organize a football match, maybe put on some music and draw out a crowd.  We have experimented with all of these different possibilities, large music festivals, smaller festival, football matches, we have tried every combination of event that we can stage to bring a crowd together.  Ultimately what we found, relatively small scale and nimble road shows are super effective, you know, you use small truck, you move around villages, you target the markets so you have to know when the markets are occurring in different towns, you have to create a very, very efficient schedule to move your trucks to the markets at exactly the right time so you don't waste fuel which is ultimately one of the biggest costs in doing this type of marketing.  You have to really get hyper local and understand exactly where the people are, when they are there, and you find aggregations at church, people are coming together at churches and we'll do small road shows at churches on Sunday and schools, of course, they're great places to do this kind of awareness building as well.

It has to be recurring so we mapped out all of the markets in the area where we serve and we created a rigorous schedule to move our marketers in the locations.  At each location, you have to be again very, very efficient, you can't waist time.  You have to train the local marketing teams to set up tents, conduct musical event, bring crowds, register them, it is very, very intense ground operational work and as you can see, very little of this has to do with technology.  It is really about mobilizing local teams to build awareness and to build trust.

The reason we have shifted our focus now towards training, it is because now that we have conquered customer acquisition from awareness‑raising point of view, we found it is not enough to sign up a customer, we signed up 200,000 customers in six months, which is pretty phenomenal to be able to acquire that many new accounts.  If the customers aren't using the service, you don't really have a service!  Right.  You don't have revenue coming in, the customers are not benefiting.  You have a bunch of dormant accounts, and that's the reality we have encountered and many other service providers have also encountered.  As you start to wade into that reality, we discovered education is the essential part of this, only way to drive adoption. 

Ultimately, you distill it down to trust building.  If a customer is not trusting your service, they won't use it, and clearly if they don't it, they're not going to trust it.  So you need to figure out the best, most efficient way to deliver that understanding and ultimately gain that trust in order to drive adoption which ultimately drives revenue, which makes all of this possible.

>> MODERATOR: Mary, I'll come back to you.  I would love to hear about the challenges that you have faced in terms of making your work possible.

>> MARY OLUSHOGA: Yeah.  Before I even discuss the challenges, I want to also add to the point that Michael stressed on, training is very important.  I'll give you, for example ‑‑ I'll give you an example.

For instance, a lot of the farmer, we have trained easily over 500 women farmers, like I said, in the three area, and a lot of the farmers use the broadcast seeding methods to sort of grow their crops.  One of the interventions we sort of ‑‑ the approach that we took, it was trying to help them implement or understand the transplant method so they sort of grow their crop in a very small nursery and they move the plant to the actual farms.  For instance, you know, when they use the seeding method they only grow 2 tons of rice, they focus on rice, cassava and maize, with this transplant method, it goes up to 4 tons, there is an improvement we see in terms of the yield that they're about to get from the crops.

I would say that there are three challenges that we faced.  Obviously we built relationships with local partners who were able to speak the local languages, the training was conducted in English, also in a local language as well.  Another method that we used was we purchased a farm so that we can show them the demos on that farm so that they can actually experience, see, touch, feel sort of the interventions that we were planning to conduct.

Another challenge that came up definitely, or that we have seen over time has been security as well.  When I check in with the farmers ‑‑ I believe it was before this presentation A week ago I checked in with a farmer, kidnappings have increased exponentially, a lot of farmers are very afraid to go to their farms because people are being kidnapped and insecurity is a major issue.

Another thing too, data.

One of the reasons why we also got the grant from planet earth institute, it is because we plan to ‑‑ we're building a database of farmers, the types of crops they're grow, getting information about the size of their farms and other details.  I would say those are the three main challenge, data, insecurity as a challenge, definitely the language barrier.  As you can see, we're sort of able to overcome the challenges because of our relationship with our partners on ground.

>> MODERATOR: To tease out a little bit of this, in terms of language, is the real challenge ‑‑ is it the number of the languages, the translation?  Can you tell us more about that?

>> MARY OLUSHOGA: Yeah.  Sure.

I mean, language, we found language to be a barrier because it is a rural community.  Right.  The educational background first of all is not really ‑‑ they're not like people with master's degree, undergraduate degrees, sometimes they have the SSC or a contractor from junior or junior high school, but they're very good farmer.  They're productive farmers, I feel if the government had invested more in ‑‑ more farming initiative, they would definitely be having more success stories coming out of those particular states in Nigeria.

In terms of languages, ensuring that, you know, the content and the training that we're sort of teaching, passing off to some of these farmer, it is very relatable in a way that they understand it.  I know that the thing we also taught them, it is the importance of record keeping.  So we're not going to go and start teaching them accounting practices because that would be way over their heads.  Simple record keeping, so that they can track, if the farms are making money, they can track the timing of when they should plant specific seeds and they can track, for example, when had he should be selling particular crop, the seasons and different types of things.  Basically simplifying the educational content that we were relaying to them.

>> MODERATOR: So Michael, would you share some of the challenges that you have faced in deploying ‑‑ you hit some of them.  We would love to hear more, if there are others that come to mind?  To prompt you a little bit, one of the things ‑‑ I know you faced, it is getting acceptance from the local farmers to be willing to engage with smart money as a different way of doing business.  It is obviously hard to change habits.  I would love hear more about how you confronted that and the things you tried to overcome it.

>> MICHAEL SPENCER: Amazing, Mary, we're living parallel lives.  It is quite astonishing.

All of the points you touched on are equally relevant to what we do.

What we discovered first of all in terms of the training, bringing understanding into the community, it is that it has to be delivered by local people.  It is not just that the language is an issue but it is also trust.  The customers you're trying to address, they really need to be trained by their own people, people from the community, from the same tribe, people they can really relate to where we work in Western Uganda on the border with Congo, people are speaking a derivative from the Congolese side of the border, it is an extremely unusual language and even people in neighboring districts in Uganda cannot understand it.  What it means, you cannot bring a trainer from Campela across the country to train in rural Casazi and you can't parachute in foreigners from London, New York City, it does not work.

So it means that you have to hire local people to do this training.  The sad reality is, very few people have professional experience as trainers and in fact, most don't have any type of real formalized education beyond high school level.  Before you send people up the mountain, out to the village to train the community you have to recruit and train the trainers and that alone is an enormously challenging thing, there is an enormous amount of people that want to work, when we pose positions people travel across the country in Uganda to interview for our job, lines of people standing outside of our office.  The skill level, sadly is really, really low.  We have to pick the best people we can and we have to train them extensively and the training we found is also quite interesting.

If you see how much development organizations operate around where we are at least, we have save the children, USAID, Catholic relief services, all of the organizations are passing through the community and conducting some type of training, invariably it is workshop‑based training, so they set up a workshop, invite the local community to come, give them a free lunch, a transportation refund, and then basically lecture them for a day and maybe handout some printed materials.  Naturally, we tried the same approach with thousands of customers and achieved absolutely no result at all.  It was as if we have never done anything, there was no comprehension, it was incredible.  This is being delivered by local people, speaking their local language, it wasn't a language issue.

In the end, we abandoned the entire workshop approach and we tried printed materials, handing out small pamphlets, that also proved completely ineffective, even though they're using illustrations made by local people, it was picture based and didn't work at all.  In the end, we're about to give up honestly, and we found that there was one method that really does work and that's practical.  It has to be hands on, high‑touch, sitting right next to the person, holding their hand with the phone or the shovel or whatever you're trying to train on and it has to be repetitive.  It is not enough to just show up once, you have to come back week after week after week after week, and we found it takes three months of weekly trainings before people really, really start to exhibit sustainable behavior change.  I'm proud to say if we do that, if we bring that weekly training for three months, 50% of our customers remain sustainable savers for up to at least two years, and it has now been two years since we started training our initial group of customers and they're continuing to save and it is really exciting to see that.

I would also add too, there has to be a lasting presence in the community.  If you just train and then leave they assume the intervention is over and they just stop.

This is very difficult to achieve.  You're talking about vast geographies, people are spread out, isolated, very, very remote places and how do you keep a permanent presence in their community when you're a for‑profit company, where is the revenue coming to sustain that kind of footprint?  The answer is, it is not.  You need to build localized solutions within the community itself to sustain and carry forward the knowledge in the community.  The way we achieve this, we created smart money saving clubs and these are organized at the institutional partners that we work with.  I mentioned before we work with agriculture company, schools, churches, each one of these institutions, we set up a club, we give them an agenda, they set up Steering Committee, and they meet every week.  Through the clubs they Chair knowledge, veterans share knowledge with the newer member, a sustainable knowledge base in the community, the community also services each other and we can talk a little bit about what that means in our model.  Essentially they support each other for depositing and withdrawing in their digital wallets.  We have an innovative method of could go that, not requiring any types of agents to be present in the community.

The saving club selves as a gathering point where the community can service each other.  Of course, then it maintains trust.  The community always knows that there is a place I can go at least once a week to answer questions and get the services I need.

This is really what we do, we build an ecosystem throughout the entire community of the clubs, supplemented by the digital wallet service that we offer and the training that bootstraps the whole ecosystem.

I also wanted to touch on the data point, which think is key as well.

A little story here.  We first started working with these institutional customer, I said to my cofounder on the ground in Casasa, run out, grab me a list of all of the schools, churches, agricultural companies, we'll systematically schedule meetings and I expected her bomb back with a lot of lists in a couple of days.  She says, wow, there is not a single list of all of the schools in our district.  I said that can't possibly be true!  Go talk to the government!.

Sure enough, they don't even know ‑‑ we knew more schools than they did.  It was incredible.

I said, okay, go up to the Catholic church, you know, you have contacts there, go over there to the Protestant church, they didn't though their own churches!  Unbelievable!  In the end, we sent our team out to talk to all of the local village officials and we compiled our own database and found in a single district in Uganda, just to give you a sense, there is 112 districts in Uganda, in a single district we had a database of 5,000 institutions.  500 Catholic church, Protestant church, schools, farmer groups, so we now have the only directory as far as I'm aware that exists of all of these institutions.  Look, we didn't do it for fun.  We did it because as you heard, we needed to be efficient about our operation and how can you be efficient if you don't even know your customers?

>> MODERATOR: Mary, I'm sure you have your own experiences.  You are doing this type of work as well trying to do this, trying to recruit trainers, sustained contact with unity, I would love to hear about the efforts and how experiences are working in that regard.

>> MARY OLUSHOGA: Yeah.  No.  I think ‑‑ you know, I talked about it earlier in terms of we worked with a local business owner who is very familiar with the community and we worked with local community leaders who helped us to bring together women farmers across these three different states that we worked in and actually the time we started the initiative, you know, there was a lot of activities in terms of terrorism and all of that.  It was really at the height.  Trust was very, very important and I totally agree with Michael.

The other point to that, Michael stressed upon that ensuring that the training that we were do, it was actually hands on.  Like I said, we purchased the farm so that we could actually teach the farmers in person what that transplanting method looked like and what that experience was.

So definitely.  Yeah.

I think at the end of the day it is really about collaboration.  It is about transparency, it is about accountability.  And how ‑‑ what ways can we continue to support these very rural communities?  Part of the things we also did with planet earth was to develop a mobile app for the farmers to keep in touch with them, stay engaged with them, provide them with the lessons on the agricultural practices.  It was multifaceted but very, very productive.  Like I said, it is sort of transforming into this experience whereby some of the women farmers are working in cooperatives and will be able to supply, you know, some of their food products to Shoprite in Nigeria.

It is ongoing, but we're still pushing.

>> MODERATOR: Mary, I would like to bring up a slightly different topic, sustainability.

I know you were founded by a grant, you have some plans to experiment with different models where the people you train again provides some support on a going‑forward basis.  Can you tell us more about your vision and about AWP network becomes a sustainable self‑funding organization or at least defraying the need for the outside support?

>> MARY OLUSHOGA: That's a really, really good question.

Especially a question we have had to think about, my team and I have had to think about especially during COVID‑19.  As you know, you know, so many things have been effected, you know, COVID, Nigeria, in addition to that, we had protests and even in the middle of our training, you know, for some of our program participants, for this initiative, you know, Shoprite was looted and some store, they were burnt to the ground.  There are all of these circumstances beyond your control, insecurity is an issue beyond our control.

Our goal, it is definitely to keep establishing partnership, that's very important.  Like I said, we're working with Shoprite Nigeria.  So some of the goods that will be sold, a percentage will come to the AWP network, it is our goal ‑‑ it is our sort of intention to ensure that in our training, for example, with the Shoprite project we touched on everything from understanding the supply chain, to keeping records, finances, all of that, because if the women develop their businesses they understand, you know, some of the issue, some of the concerns or understand some of the things that are needed to keep their businesses sustainable and then they can supply their Shoprite. 

A portion of the sales through Shoprite will definitely go to the AWP network.  In addition to us, you know, applying for different grants, definitely pitching to different partners, hopefully also working in collaboration with different state governments as well.  Those opportunities have come up.  We're pushing.

It is not perfect but a thing that COVID‑19 did or, you know, the experiences, it forces you to sort of think outside of the box.  When I thought about this idea for Shoprite Nigeria, it was my intention I would be in Nigeria, you know, there giving and working with people to conduct this training and then COVID‑19 happened and then we couldn't travel for a while and so everyone needed to come online and I remember I was a bit nervous because internet is not so great in Nigeria, I was like goodness, how will I, you know, conduct these trainings online.  You know, to my surprise, a lot of the women, they were in these trainings online using Zoom, paid for oil for the generator to be on because electricity is not so constant for three full hours because they're invested in building their businesses.  There are challenges but I feel what happened with COVID‑19 has sort of forced us to be more innovative, to be more efficient and to really think outside of the box.

>> MODERATOR: That's fantastic.

Michael, you have already talked a little bit about sustainability, charging on the customer side some of the larger institutional customer fees, taking percentage on the merchant side.

Tell me, have you ‑‑ are you feeling confident that the smart money is on its way to find that sustainable place?  From my understanding, you still continue to receive some degree of grant funding.  Tell me about where you are in that journey because you made the point, you're a for‑profit company.  How is this panning out.

We can't hear you.

>> MICHAEL OGHIA: Sorry.  I forgot to hit the unmute button there.

We're a for‑profit company and have been from the outset.  Sustainability I think is a really fundamental issue to all of these types of social enterprises in Africa.  I think there are some structural systematic issues that need to be brought to the surface.  What do I mean by that?  The reality in rural communities is that the revenue opportunities are extremely limited and the reason for that, it is just the fundamentals of the market conditions, people don't have discretionary income to be spending on anything that is beyond their basic needs and so if you come along with even the most attractive business opportunities, if they can do the same thing in a cheaper way, even if the cheaper way is perhaps more dangerous, less secure in some way, they will always go with a cheaper way.  This is extremely relevant in the case of fintech, it is our sector.  For now, how many years, 15 years we have seen mobile money spreading throughout Africa and it has, you know, taken off in certain isolated places like Kenya, South Africa, and it is dominant in urban locations.  What you don't see, you don't see it so widely used.  I think one of the most fundamental reasons is the cost.  Right, the fees that are charged on these mobile money transactions, it is prohibitively expensive.  For example, if you go in a local shop and buy a Coke‑Cola in Uganda, you're paying 30‑cents for that Coke‑Cola.  If you pay in cash, it costs 30 cents, if you pay with mobile money, the Coke‑Cola costs 30 cents plus 30 cents of MTM mobile money fees.  You just doubled the cost of the Coke‑Cola, nobody will do that.  This is a perfect example of how the market does not allow for that type of revenue in this type of use case.  As a consequence, in rural communities, people are not using traditional mobile money for consumer purchases.  It is just too expensive.  Ultimately you run into this problem as a business person where there are so, so few revenue opportunities so how do you possibly build a sustainable business.

If revenue is low, costs must be lower, that's how it works in business.  Ultimately, what it mean, if you put it altogether, it is that you need to run an extremely lean, efficient ground operation.  We have already talked about the critical need for a ground operation for marketing purposes, customer acquisitions and training.  That's a necessity to operating a business.  If it is also a necessity to dramatically minimize cost to generate sustainable profits, then you need to figure out how to deliver education at the lowest possible cost.  That's the game.  It is really not about technology, it is all about organizing extremely efficient ground operations.  Now, of course, when I talk about this with any investor their eyes immediately glaze over, they imagine thousands of people on the ground, truck, vehicles moving, huge security problems as Mary mentioned, and they immediately run in the opposite direction.

You know, the first thing I have to do, persuade the investors that, in fact, all of this is necessary, that there is no other way, there is no shortcut.  You can't just put up a Facebook page and imagine that your customers will flock to your service, it doesn't work.

It just doesn't work.

So you have to commit to this idea that if you're going to capture the rural market for whatever service you're offering, you need to field a ground force and that ground force has to be very efficient if you're going to realize profits.

Even if you achieve all of that, it is going to take some time.

This is where the structural issues come in.  Our experiences and investor, they have a limited amount of time to return profits.  So if you look at a typical impact fund, they're going to, you know, want to hear from you very quickly in your pitch how much money do you need, when do I get it back, how much do I get back and why should I believe you.

Ultimately, what they want it hear, it is that it will take no more than throw years for them to get a 30% return.  All right, first of all, our profit margins as you have just heard, they're relatively small, we have to overcome all of these enormous obstacles in access become experts in this ground game in an extremely difficult market environment and we have three years do this, achieve break even and return 0% to you, the investor, good luck.

>> MARY OLUSHOGA: Are you a magician!

>> MICHAEL SPENCER: It is just not happening!  You end up with these two situations both of which are terrible.

You have the entrepreneurs like Mary and I who, you know, either don't know the realities yet because we're new to the game, we think that build it, they'll come, we don't understand the name for the ground force, we project these amazingly profitable business models and investors look at it and say that's great, yeah, we'll commit money to that.  Three years down the road everybody is disappointed, founders are kicked out of the company and it is a bad situation.  That's one situation.

The other situation, you have veterans like Mary and I, we have been on the ground a long time, we know it can't be done in three years, we're not magicians and most likely you're looking at 5 to 6 years realistically to return 30% if you're lucky enough to get that far.

Often if we're truthful we'll present the reality that exists on the ground to the investor and they say no, we need a faster return than that.  They find other opportunities and other places where they can get those returns.  So what is this all adding up to?  A critical shortage of funding for early stage innovation in Africa and we have encountered this first happened, it is difficult.  We're doing our best, we're bootstrapping what we can and we have been lucky in terms of raising early capital for friends and family, we have had good support from donors, MasterCard Foundation, USAID, Mercy Corps, things like that we need an institutional partner that has an understanding of the market conditions we're addressing, is willing to commit patient capital and put it at risk and bridge us through this sort of next stage of growth until we're a mature company and at that point, there is gobs of money out there, we can get money from development finance corporation, you know, plenty of companies that are at a mature stage getting financing.  Unfortunately, most companies don't get there because there is not enough capital to bridge them to that point.   .

>> MARY OLUSHOGA: We have received interests from the IFC, that's very exciting, with this project in collaboration with Shoprite and I should add that we have gotten some major funding from Shoprite as well to sort of implement our project with women.

>> MICHAEL SPENCER: That's terrific.

>> MODERATOR: This is one place where I can share with you the perspective of the work that we're doing with 1 World Connected, you're ahead of the game.  We discovered two‑thirds of all initiatives have no revenue whatsoever.  There was no plan in place, there was ‑‑ these are idealistic, well‑intentioned initiatives and when there is no plan of how you can transition into the self‑sustaining you will only survive as long as the funding source continues to support you.  What we have talked through with a lot of people, the funding sources, you should insist as part of the evaluation process that there be at least a plan, understanding how difficult the plans don't often turn into reality, before you fund it, there should be a plan to turn into the self-sustaining, otherwise you're validating technology or something.

We also encourage them to think about this as validating business models that you learn from that case, a little seed money to figure out if this will work which means that you have to satisfy a little effort, is that something that I know you two would love to do, pressed time to do, evaluation, monitoring to do this, I know you like ‑‑ you're doing some of it, but we would love to do more and you have got a business to run.  Doing that sort of information gathering, it is a challenge.  To me, that's a role for the internet governance community to play, to find a grant for evaluation, so it doesn't have to come out of what you're doing to validate ideas so that we can learn from case to case instead of scrambling every time we start up a new enterprise to figure out, to reinvent the wheel over and over and over again.

We have been going for about 40 minutes.  I'll just let all of the people who are attending, we will entertain questions.  Post them in the Q&A session or in the chat.  Before we get to the question part, I would like to go back to Mary and Michael and say, okay, we need to give a voice to the people that have been on the ground, you talked about some of the challenge, some of the realities.  What advice would you give to a person who is attempting to start a new venture to try to bring the benefits of the internet to these rural communities that are struggling.  You have learned difficult lessons and paid for them in blood.  I would love to let you share them with others who are listen, wondering how decide do this.

>> MARY OLUSHOGA: Yeah.  No.  That's a terrific question actually.

Even though I was born in any Gloria, until my project I had not been to the northern part of Nigeria.  Like I said, when I started the initiative in 2014, you know, it was at the height of a lot of violence, all of that, and so, you know, for example, in my family, they heard I was going north, I traveled there several times oh, no, don't go!  Don't be afraid!  That's the first thing I would say.

When I went there, because I was with a lot of the local leaders, the local communities, it is a great fit.  The farmer, they're excited to see who is helping out with this project, funding it, initiating it, and it was a really great experience.  The first thing I would say is definitely do not be afraid.  You know, some news can sound really scary and sometimes you go to a lot of the regions and it is just business as usual for a lot of people unfortunately and then I would say also, be willing to try different things, you know, like you have said, you always have to keep trying different models, you have to be willing to pivot, you can't be so stuck to one idea and I knew I wanted the network to be a training platform, AWP network, who and what we wanted to train, I had no idea. 

We started to train students at colleges, helping them to figure out how to put together business plans and different things like that because they have never done it before, and then here am I receiving a significant grant from the Planet Earth Institute in the U.K. who had learned about my work, working with women farmers.  So I never would have connected the dots..  Now I'm working with the cooperative, the women to get on the shelve, they can be sustainable, grow the businesses, access more customers and increase sales.  Don't be stuck to an idea, be willing to move, innovate, pivot and also learning, you know, it is important to sort of be that student again.  I'm always ready to learn from everyone, from the farmers, you know, all the way to policy leaders and reading a lot of new innovations and things like that, learning about policy documents and things like that.  One, don't be afraid, be willing to learn and definitely, you know, move and meet people as you go along.  The sky is the limit.

>> MODERATOR: Michael.

>> MICHAEL SPENCER: Again, I echo everything that you have said there, Mary.

Absolutely.  You need to be curious, adaptable, you also I would say have to have some thick skin and be very determined.  You will have a lot of failure, a lot of setbacks, and honestly, depending how you look at this, if you are turned off by failure, it is maybe not the best thing to do.  If you find failure exciting because it is a discovery process, and you believe that you can get over the failure, then it is an addictive activity.  You are constantly problem solving and just when you think that you're summit, you realize there is even a bigger mountain behind that one.

That kind of challenge can be very exhilarating.  In terms of how I got started, I think this is something that I could share with people.  People often ask how do people go from Goldman Sachs to this area, how did that happen exactly?  Completely random.  It was never part of the plan.  I was dating a Kenyan lady in Nairobi and she invited me to come out to meet her family in Kenya, that was my first exposure to Africa.  You know, it all fell in place after that.  You know, what really got it started for me, after that initial contact with Africa, it was that I was lucky enough to have colleagues, business colleague, friends in the York area who already had connections in that part of the world in East Africa and I was able to leverage the trust in the relationships that they already had to gain entry into their network so they made introductions for me to different people and, you know, through that I was able to slowly build my own local network and that's absolutely essential.  It is all about getting to know the local people, figuring out how ‑‑ who you can rely on, who can help you, and just being as social as you possibly can.  You know, being open to wherever that leads you really as Mary said, if you're fixed on one idea you might get yourself a bit trapped and you really have to be able to move as opportunities present themselves.  I would also add to, I think it is essential that you have access to some kind of funding network of your own before you embark on this.  One of the very hard lessons I have learned, it’s the incredible financial hardship that it takes to get something like this off the ground.  You really do need access to early stage capital from your own network because, you know, getting donor fund, Mary can attest, it is not an easy process.  You know, it can take years of email, interactions before a donor may come around to supporting you in some way.

You need to survive through that, however you're going to do it.

I think it is key to become as a ‑‑ as elastic as possible, funding will come and you will get excited and ramp up the business and hire a bunch of people, get equipment and then the funding stops.  Now, you know, if that happened in the west, you would close.  If you're going to continue on, you have to adapt to that reality and quickly scale back the business and keep the lights on, keep the business going while the pilot light is on while you raise new capital and then you grow again.  It is an extremely inefficient process because customers wonder why they're big and then small and then big, then small, team members lose motivation, but you have to go through that.  That's a reality.  The funding just is not continuous, you have to learn how to be elastic like that.

>> MODERATOR: That's terrific.

We have a question in the queue, it is for Mary.

Mare Y you mentioned the app created in or the order to stay in touch with farmer, why did you create a new app instead of existing tools?  Do you plan to make it available for a wider audience?

>> MARY OLUSHOGA: A great question.  We created the app because we received funding for creating the app and so that's why, that's why we created the app.

Will it be available for a wider audience, currently no because as I said before, we have shifted what we're doing so yes, we're still going to trainings, so we just changed it so that we're creating a supply chain right now and it is our goal to sign up retailers.  So other supermarkets in Nigeria, so ‑‑ but the initial reason why we created the app is because we received funding to do so versus using existing tools which I know ‑‑ I totally understand.  Yeah.

>> MODERATOR: What I'm fascinating about, you both ‑‑ obviously, the purpose of this, it is to continue engagement.


>> MODERATOR: This is an efficient way to do this.  We have a very different model coming out of smart money.  I would love to hear you talk about how you made the decisions, you know, how you make these trade‑offs and maybe it is different for the dinner domains you're in just because of the nature of it, but you're taking ‑‑ I think everyone agrees ongoing engagement is critical, the two organization, they have taken very different approaches.  I would love to hear you talk more about that.

>> MARY OLUSHOGA: Michael, you want to go first?

>> MICHAEL SPENCER: No.  Why don't you go ahead.

>> MARY OLUSHOGA: No.  You go ahead!

>> MICHAEL SPENCER: You know, I want to clarify the question first, Christopher.

Are you talking about the ongoing engagement with customers specifically?

>> MODERATOR: I'm thinking about customers although you could be talking about ongoing engagement with merchants, other partners, we have not spent a lot of time talking about other partners as well.

I did have in mind the end users, but if you like to talk about other aspects, it is showing deeper knowledge in this issue than mine, I think the audience would benefit from that as well.

>> MICHAEL SPENCER: Sure.  Right.

Well, where to start?  When we started Smart Money, other focus was on rural and we were interested in using digital money technology, this is ten years ago mind you.

To address use cases of relevance to the rural community.  We quickly discovered that pricing, as I described earlier was prohibitive for consumer purchases.  We realized that in order to compete with cash, our service had to be free of charge.

You know, we built our own app, as Mary did, we had to do that for a variety of reasons which I'm happy to share.  But we also had to make the service free of charge, otherwise it simply wouldn't compete with cash and so we started to work with agriculture companies with the idea that the agriculture companies would use our service to pay our farmer force the crops.  This is how Smart Money got started.  The idea was these ag companies are paying now with cash, they literally are dropping bales of cash out of planes on to the fields with guys running around with AK47s distributing the cash out to the buying posts.  It is hugely expensive, a lot of theft, no accountability.  We said, hey, look, stop with all of that cash.  You know, let's set up digital wallets for all of the farmers and you can pay them electronically and you can then pay us fees to remove the cash out of your payment operations, much more secure, lower cost, so forth.  That's how we got started and we had to keep this engagement going with the agriculture company, very expensive. 

I was spending my life out in rural Uganda, Tanzania, developing and maintaining the relationships. we found the farmer rejected the solution.  Although it was free of charge, the digital money was not equivalent to cash for them and they couldn't buy it with any of the local shops, they couldn't buy things with digital money.  We had to expand our scope on the ground and begin training the merchants on how to accept this digital money.  That dramatically increased the scope.  The merchants themselves, again, you have to have this regular repeat visit or they would just stop using it.  You can imagine, going to every single shop on a regular basis, it is ‑‑ it is completely prohibitively expensive.

Frankly, this is the major reason why the innovations don't really take hold on a scalable basis.  It is just impossible to keep this presence locally in the community.

So we started to really evolve the model in many different ways by trying to push as much of the training and the marketing and the servicing into the community itself so that we won't continuously have to stroke the community with our team, we couldn't afford do it.  That's the concept of the Smart Money saving club, how it got started.  We found that we were relying too much on the shopkeepers to provide the critical service of facilitating depositing and withdrawing for our customers.  Digital wallet is only useful if you can deposit cash into it and withdraw cash out of it.  Most conventional mobile money solutions rely on having agents present in all of these villages.  The problem they always run into, there is not enough agents.  The distances are huge.  It is not a highly profitable business.  Even the agents they recruit end up closing businesses frequently, very, very expensive, it is known as a liquidity challenge in mobile money circles.

We said what if we don't need agents?  That's a cool solution.  The way we achieve that had, leveraging our free of charge pricing.  If you have digital money and I have cash, I wanted to deposit smart cash ‑‑ cash on to my Smart Money digital wallet and you want to withdraw digital money into cash, we come together, we exchange two equal forms of value.  You give me your cash, and I give you my digital money and you have done a withdraw and I have done a deposit.  The other way around, you have done a deposit, I have done a withdraw.

That's pretty much how the model works.  The community ends up sort of embracing this ecosystem change as sort of a communication technology within the community and of course that's what commerce is, it is a form of communication.  In the end, the way we look at it, it is the digital wallet is little more than a communication tool for exchanging value between two people and storing value during that intermediary period.  When they accumulate money for the investment purposes and the education is nothing more than a customer acquisitions strategy, it is a way of driving adoption of the communication platform.  So the way that our business model looks, the way we present it to investor, we have a high up‑front cost when we move to a new market and we have to build this ecosystem with the training I have described, so forth, but the understanding, it is kind of implanted in the community and then we can reduce the training that we do, we have the community servicing themselves, and our costs dramatically fall off, the revenue continues to grow as a deposit base gross and the fees grow that we're charging to the institutions.  It is a very long winded answer, I don't know if we answered the question.


>> MINDA MOREIRA: In terms of how the AWP network started, in terms of how the farmer project started, for example, the AWP network agriculture farming project, it was actually presented to me by a member of a community.  I had been writing a lot about why women  ‑‑ before I started this specific project, I had been writing a lot in a lot of Nigerian publications on why women were very crucial and important to sort of any Gloria's economic development and growth and so I think it was on Facebook, someone reached out to me, they said, okay, you love to work with women, you want to make an impact there, you know, I got this great idea and when they pitched me, I was like wow, I would love to do it!  I flew to the U.K. and pitched to ‑‑ it came off as a grant but sort of ‑‑ he was ‑‑ I would consider him an investor but he didn't expect the money back.  I went to the U.K., he took me to the U.K., I presented the idea and that's how it sort of took off.

In terms of, you know, how it has gone so far, once again, I'll just stress that the importance of collaboration, the importance of accountability, the importance of transparency, it is a great journey, you have to be willing sort of to move along despite the challenges.  Yeah.  I'm not sure I have much to add.  I think Michael explained a lot of what I would like to say.

>> MODERATOR: We have one question remaining in the Q&A queue and given the way that time is, that's probably our last question, what contributions each ‑‑ should each stakeholder group bring to face these challenges?  We have been talking about your part of it as the entrepreneur, the leader that's doing it, IGF is well‑known to have a stakeholder, multiple stakeholder groups, that is government, Civil Society, technical community, I had mentioned it in passing but I think that the question you asked, it really brings it home, what can the rest of us do?  What are the opportunities that you are wishing that people would be stepping up to help make the fantastic work that you're both doing   go even better?

>> MARY OLUSHOGA: In terms of what I'm doing, definitely more funding towards the work, more focus on farming communities in rural areas.

I mean, like I said, in securities, it is a major issue ‑‑ insecurity, it is a major issue in Nigeria, you know, trying to resolve that is another issue.  A lot of issues related to farmers have been highly politicalized in Nigeria.  There is this report that came out whereby the central Bank Of Nigeria I think gave about ‑‑ I want to say 500 million to farmer, people they thought were farmers and apparently none of people they dispersed the money to were farmers and, you know, one of my community leaders actually told me a story before I came on because I was just hoping to make sure I captured all of the points, and he said, you know, government officials came to his home saying that he had received the central bank lone but he never did so there was no documentation, no data on anyone ‑‑ there was no verification process so people received millions of Nira with fake addresses on there, and so my community, you know, my community partner, you know, basically said, you know, government officials showed up at the house and I didn't even get any of these ‑‑ any of the money.  I think less politicization of issues relating to farming communities in any category would be useful and supporting the actual farmers.  It is a combination, I agree, of Civil Society, a combination of government officials, it is a combination of partner, you know, whether it is the IFC, funding partners, and also we have a responsibility as entrepreneurs and proactive leaders in the community to bring all of these entities together. 

For example, there is Shoprite project, you know, we were able to ‑‑ I was able to pitch Shoprite and they loved the idea.  You know, and so they have come in now as a very strong founding partner, and the IFC, they're very interested in helping to build this sort of vender database that could really help with the supply chain in terms of helping more women to become, you know, suppliers on a large basis which could definitely help their sales, definitely help their businesses, and hopefully as we do that, the strengthening of their business, they could hire more people, support their communities at the local level and definitely, you know, I have pitched the idea to so many people who have loved it, supported it, in one way or another, if people support it, they're introducing me to other people that you just have to be vocal and believe in the idea, the initiative.  I think that people definitely buy into the story telling.

In terms of stakeholders, what challenge, you know, I think we have talked about everything.  If security could be resolved, less politicization of farming related issues, and definitely, you know, bringing in more funding partners and more strategic partners.

>> MODERATOR: Fantastic.  Michael?

>> MICHAEL SPENCER: Again, I will echo what you said, Mary.

Our experience, like I said before, it is that, you know, it is one thing to raise your early stage capital and get some minimal viable product into the market, get customers and a bit of revenue.

The challenge is when you get to that point.    the value why have death, if you're lucky enough to get, there you peer over the valley and nobody is available to fund you, you know, beyond that.  And why is this?  Why is that?  It is considered still high‑risk.  You haven't reached profitability.  Commercial investors will look at you, wow, that's a high‑risk, I need this massive return to offset the risk and, of course, the market doesn't allow the returns to be created as we have discussed before.

I think there are other problems too.  This is really where some of the stakeholder groups can really help.

There's just a lack of understanding in our experience of the rural market in Africa.  You know, there is so many studies being published by so many dinner groups and most of the discussions sort of conflates urban and rural Africa as it is one big thing.  I say in my experience at least, it is that rural Africa is about as different from urban Africa as urban Africa is from New York City.  It is a radically different market with completely different dynamics and there is very little attention paid to that.  I couldn't see conversation around those differences.  They're fundamental important differences.  What you see inevitably, the funding available, it goes into, you know, start‑ups that are operating in urban environments where it is much, much easier to acquire customer, providing service, the population is denser, they are more sophisticated, they have income, I could go on all day.  You could advertise online, you could advertise on billboards.  There are so many reasons why an urban market is easier to dap churr.  When it is captured, they didn't agree, it is so profitable, let's replicate this in the rural market.  It doesn't work!  It doesn't because the market is fundamentally different, you have to go back to the blank piece of paper and reinvent the business.  Most companies, they don't do that, they tinker with the urban model and they get penetration and really not much.

Again, the stakeholders could really help to populous size how different the rural market is and the importance of really starting your business in rural if not urban.  The 60% of the market at least in Africa is rural.  If you're not building the business for rural, you're missing out on a massive market opportunity.  I would like to see more funding to target early stage innovation, you know, beyond seed stage but not mature businesses.

You know, Jacquelyn Novengrat wrote a paper on this, From Blueprint to Scale, talking about exactly this.  She identifies the missing middle.  If you have not read it, I encourage you to read it, it is a fantastic Article.  Her solution is this is where philanthropy should step in, this is where the donor organizations should step in, to derisk the commercial capital, reduce the risk on the commercial capital to help these pioneers get over that valley of death from blueprint to a scalable business.

You know, since we're on this topic, the other challenge we have with donor organizations, of which we have worked with many, many of them, you know, over the years, it is that the people that are in the decision making positions in the donor organization, they're not really coming from business backgrounds, they're not entrepreneur, they haven't really spent a great deal of time on the ground like building actually sustainable businesses.  They're not really attune to the challenges that the entrepreneurs are facing.  Your story, Mary, I built it, the app because that's what the donor wanted.  That's exactly, right!.

>> MARY OLUSHOGA: I'm active in the Nigeria tech space and when you read pitch documents, people say Nigeria is the most populous, my product will be used by 200 million people, when you look at the actually data, you find that people with spending power, it is quite minimum.  It is even more minimum when you talk about rural areas and I think you touched on this before, in terms of people are just trying to spend money, like on food, basic things, in places like Nigeria, there is no electricity, you buy food and  when turn on the generator, you have to buy fuel, all of these expense, people are like a government on to themselves.  Philanthropy, a funding organization can help fill that gap.

>> MICHAEL SPENCER: Absolutely.

In our space, inclusive fintech, a thing that really astounds me, the amount of discussion around high‑tech solutions.

Everybody talks about blockchain, crypto this, crypto that ‑‑

>> MARY OLUSHOGA: Artificial intelligence.  Right.

>> MICHAEL SPENCER: All of these applications require some smartphone technology for the customer to use it.  Certainly internet access.  The vast amount of people in the rural communities cannot afford smart phones or the internet access.  You know as soon as the solution says we need a smartphone, okay, that's an urban only solution.

>> MODERATOR: We have reached the end of our appointed time here.  Thank you both for highlighting the importance of really focusing on the challenges that rural communities face in creating in this case solutions.  I think you put a real world color and depth to that understanding now in ways that I think hopefully will inform a lot of decisions in the future and we're grateful for you to spend this time with us and grateful for the terrific work that you have done.

Thank you, both.  We wish you well and we look forward to continue the great conversation on how your organizations continue to develop from here forward.

>> MARY OLUSHOGA: Thank you very much for having us.

>> MICHAEL SPENCER: Thank you, Christopher!  Thank you to the team for organizing.

>> MODERATOR: It was our pleasure.  On a somewhat different note, there is another panel that we'll do on Thursday on the role of in this case and achieving SDGs and existing data graphs to measure progress and we'll have another conversation on another aspect of this problem.

We hope to see you there.

Thank you very much.

>> MICHAEL OGHIA: Good‑bye, everyone.   


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