Kampala – Child labour has been on the rise globally due to extreme poverty and limited access to quality education. Uganda is not an exception, with statistics showing a 40% increase in child labour, excluding household chores, in 2021, ILO Uganda wrote in its report analysis.
The agriculture sector accounts for the largest share of children in child labour, with unpaid family workers. Financial constraints faced by smallholder farmers, including inadequate access to tailored financial services and digital and financial literacy, contribute to lower productivity.
To address the root causes of child labour, the International Labour Organization (ILO) is implementing evidence-based interventions through the “Accelerating action for the elimination of child labour in supply chains in Africa” (ACCEL Africa) project. This regional project is funded by the Ministry of Foreign Affairs of the Netherlands focuses on the specific supply chains, including Cacao, Coffee, Cotton, Gold, and Tea. The project is implemented in six countries, namely; Côte d’Ivoire, Egypt, Malawi, Mali, Nigeria and Uganda.
Summary – To support the design of financial services coupled with non-financial productive and welfare services in selected agricultural supply chains. The project integrates child-sensitive measures in financial services to reduce the risk of child labour within their operations and plays an active role in the fight against child labour.
The digitalization of financial services supports the implementation of the national financial inclusion strategy 2017-2022 of Uganda.”
The project operates in coffee and tea supply chains in eight districts in Uganda, in partnership with MobiPay AgroSys Ltd (MobiPay), a Ugandan-based agro-technology solutions provider that aims to increase digital and financial inclusion services to farmers across Uganda.
Adoption of mobile communication technology has significantly increased formal financial inclusion in Uganda, with 75% of smallholder farmers using technology in agricultural activities. The use of digital technology options provides an entry point to the agriculture sector, where farmers can benefit from tailor-made financial services such as credit, savings, insurance, improving productivity, and connecting farmers to markets. The ILO’s ACCEL Africa project seeks to provide a platform for farmers to access financial services and reduce the risk of child labour within their operations.
MobiPay has taken a unique approach to addressing the challenges faced by smallholder farmers in Africa. By leveraging the power of mobile technology, the company has been able to provide farmers with a suite of services that enable them to make more informed decisions, increase their productivity and profitability, and ultimately improve their livelihoods. One of the key advantages of using digital platforms like AgroBase and Payment Solutions is that they allow farmers to access vital information and services from the comfort of their own homes. This is particularly important in rural areas where access to financial services and market information is often limited.
“What we are using technology for, is to identify the problems, raising the red flags and then working with the relevant authorities to ensure that we can reduce child labour in our system.”
Eric Nana Kwabena, Managing Director and Founder of MobiPay
In addition to providing farmers with access to financial services and market information, MobiPay also promotes sustainable agricultural practices. Through its digital platforms, the company offers training and capacity building programs that help farmers adopt more modern and efficient farming methods. This not only increases their yields but also helps to reduce their environmental impact. MobiPay’s focus on sustainability and social responsibility has earned it a reputation as a leader in the field of digital agriculture in Africa, and the company is well positioned to continue making a positive impact in the years to come.
The preliminary results of the project show that digitizing VSLA operations reduces operation costs, improves transparency and accountability, and provides access to third-party financing from financial institutions. Digital technology also improves access to markets and market information, increases productivity using modern farming technologies, and alternative enterprises. Additionally, digital technology integration provides child-sensitive measures in service delivery, monitors school attendance, and on-farm labour, leading to the direct reduction of child labour. In conclusion, the adoption of digital technology in rural financial services has the potential to be a game changer for achieving sustainable agriculture growth, poverty reduction, and eliminating child labour.