FAO Pledges To Scale Up Direct Use Of Digital Financial Transfers

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Director-General says joining the Better Than Cash Alliance is part of stimulating more innovation and financial inclusion for smallholders

22 February 2021, Rome – In another step towards creating a “digital FAO”, the Food and Agriculture Organization of the United Nations is committing to increase by 50 percent its delivery of digital financial transfers and vouchers to beneficiaries.

As part of joining the Better Than Cash Alliance, FAO is also pledging to expand its use of digital payments in at least ten more of its Decentralized Offices.

FAO Pledges To Scale Up Direct Use Of Digital Financial Transfers
Identity verification for a benefits programme in Burkina Faso. | www.brandspurng.com

Director-General QU Dongyu set these ambitious targets, while officially joining the Better Than Cash Alliance. The Alliance is a United Nations-hosted partnership of governments, companies and international organizations that accelerates the transition from cash to digital payments in a way designed to generate savings and boost transparency and efficiency while also reducing poverty and driving inclusive growth.

“We must make sure that farmers and rural population are empowered to participate in and benefit from the digital world,” said the Director-General. “This partnership is a signal of our commitment to leave no one behind. Cash in the digitized form will open numerous doors for people engaged in small-scale agri-food activities and offer great benefits. It is a high road to resilience.”

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“FAO’s announcement today is a landmark for the agriculture sector in emerging economies. FAO’s visionary leadership means that millions of small-holder farmers will now get the assistance they need more quickly, safely and transparently.

It also means those farmers – many of whom are women – will have access to a wider range of related services to improve their livelihoods”, said Dr. Ruth Goodwin-Groen, Managing Director of the Better Than Cash Alliance.

“We are delighted that FAO is joining other member UN agencies, including UNHCR, UNICEF and WFP, in their bold commitment to responsible digitization of financial transfers to those most in need. This is even more important now as the COVID-19 pandemic is increasing poverty and inequality.”

Under Director-General QU’s leadership, FAO is taking big steps to embrace and produce digital solutions, as they are destined to affect every actor in the global agri-food systems and can be designed to offer opportunities to address the challenges of poverty, hunger, inequality and climate change.

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FAO already uses mobile money transfers. One example is in Somalia where its Mobile Money and Livelihood Assistance platform delivers cash directly to beneficiaries’ cell phones, allowing farming families to purchase goods and services they need most in their local markets.

Recipients are registered with the use of biometric data, which is evolving into a voice-recognition system, making this a safer, cheaper and better-targeted means of conveyance than physical delivery and distribution.

Joining the Better Than Cash Alliance represents a step-change in scaling up such efforts on all levels, and participating in an exchange on best practices in a fast-moving sector.

The new partnership holds significant promise, as FAO has already reached more than 19 million people in 58 countries with cash and voucher programmes. In 2019 alone, FAO transferred almost $50 million – a bit under half in digital form – to 2.8 million beneficiaries in 29 countries.

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As FAO’s field activities – aiming to strengthen the resilience of rural livelihoods to shocks by supporting productive investment in agriculture – tend to engage vulnerable people living in rural dispersed and remote areas with limited infrastructure access, its digitalization experiences and needs will complement those of other Alliance members.

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On the ground

Scaling up digitized financial transfers enables direct contact to beneficiaries, many of whom have no bank account, and avoids the need for physical cash distribution, which entailed transporting banknotes to hard-to-reach areas – especially amid conflicts or in the wake of natural disasters – and engaging agents to act as distributors.

Today, digital payment options continue to grow, accelerating our ability to reach the unbanked while mitigating financial risks.  Building broader digital networks allows broader participation, thus intensifying the pace of adoption and transformation of local economies.

“Cash injects value in local economies, and digital cash is likely to produce an even stronger effect through financial inclusion, by fostering greater access for the beneficiary to credits, loans and other financial instruments that have typically been scarce in rural economies and have curbed investment as a result,” says Étienne Juvanon du Vachat, from FAO’s Office of Emergencies and Resilience specializing in cash and voucher design. “A mobile wallet opens the door to more services.”

Compared with traditional rural finance systems reliant on trust and authority, e-money can bolster programmes aimed at fostering opportunities for women and youth. At the same time, it is quite adaptable to diverse existing community savings and loans institutions such as tontines or hawala, he added.

FAO’s showcase project in Somalia proved invaluable when the COVID-19 emergency disrupted movement. Since March 2020, FAO has transferred the equivalent of $38.1 million to over 187 000 households, providing them with the means to acquire food and agricultural inputs to support local food security and supply.

In Mozambique, in 2020, FAO deployed an adapted version of the ecosystem initially developed in Somalia to move an existing voucher system onto a 100-percent digital foundation. Beneficiaries, in particular targeted women farmers, use the vouchers to access seeds and fertilizers.

Digitization adds incentives to suppliers to adapt to the technology, helping consolidate system-wide digital literacy and protect beneficiaries’ personally identifiable information, which in turn can enhance factors of production and marketing opportunities for broader communities.

The process can take time but adoption is rapid, and pandemic containment measures appear to have accelerated recognition of the merits of digitization.

“The greatest challenge in this effort is successfully bridging the last mile connecting FAO to the most vulnerable. There is no single widely accepted means of digital payments. However, we are on the cusp of significant change. Complexity will diminish and as it does, the impact will grow,” says William Marvin, Deputy Director of FAO’s Finance Division.

As Members pursue measures such as digitizing their social protection systems, synergies for FAO will grow, he says. “Sometimes digital payments work better in the developing world as they are leaping a whole generation. There’s a lot of potential for leveraging partnerships between the private and public sectors,” he adds.

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Latest News

Kinaxis Named a Leader in the 2021 Gartner Magic Quadrant for Supply Chain Planning Solutions Report

Kinaxis evaluated on both execution and vision with furthest placement for completeness of vision in the Leaders quadrant

 

OTTAWA, CANADA - Media OutReach - 4 March 2021 - Kinaxis® Inc. (TSX:KXS), the authority in driving agility for fast, confident decision-making in an unpredictable world, today announced it has been named a Leader in the 2021 Gartner Magic Quadrant for Supply Chain Planning Solutions. The company is recognized for both the ability to execute and its completeness of vision. Kinaxis is positioned furthest on the Completeness of Vision axis amongst those in the Leaders quadrant 1.

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A complimentary copy of the report can be downloaded from Kinaxis. This is the seventh consecutive time Kinaxis has been named a Leader in a Gartner Magic Quadrant related to supply chain planning 1 .

"In the face of the unprecedented level of disruption over the past year, corporate supply chains have never been more relevant and doing nothing to improve planning has become the biggest risk. Supply chain leaders at companies of all sizes have recognized a need for a transformational shift to agility and resiliency based on a new planning technique -- concurrent planning, that only Kinaxis can provide," said John Sicard, CEO of Kinaxis. "Kinaxis uniquely combines AI, analytics and human intelligence to empower innovative manufacturers to eliminate functional silos and cost-effectively optimize the potential of their supply chains in just a few weeks."

Continued Sicard, "We believe we are the leading innovator based on vision in the market and are thrilled with our positioning for our current, proven RapidResponse platform. Kinaxis takes pride in our talented team, the collaborative relationships we have with our customer and partner community and helping advance the craft of supply chain planning for the benefit of the planet."

Top-tier manufacturers around the world use Kinaxis in the aerospace and defense, automotive, consumer products, high-tech and electronics, industrial, life sciences and retail industries, including Unilever, Schneider Electric, Flex, Merck, Technicolor, Alstom and Honda, and many others.

"Schneider Electric's supply chain digitalization journey, including our work with Kinaxis, has allowed us to function as a truly global enterprise," said Mourad Tamoud, Chief Supply Chain Officer at Schneider Electric. "Through our engagement with Kinaxis, we have found them to be industry-leading, and the partnership has enabled us to have greater transparency, wider collaboration and increasingly autonomous high-quality decision-making throughout the organization."

Kinaxis RapidResponse® is a cloud-based software-as-a-service (SaaS) platform purpose-built for planning, leveraging patented in-memory database technology and always-on algorithms. Combined with Kinaxis' unique concurrent planning technique and AI, RapidResponse helps global manufacturers gain agile and resilient supply chains. The Kinaxis suite of ready-to-deploy planning applications (S&OP / IBP, Demand, Supply, Command & Control Center, Inventory, Live Lens Insights) is optimized with industry best practice processes and robust analytics that are synchronized across long and short-term planning and across the end-to-end network from customers to suppliers. The RapidResponse platform is uniquely extensible to build, access or connect to custom applications, algorithms and external systems across the supply network ecosystem.

Kinaxis helps customers accelerate value realization with multiple deployment options to go-live in as little as six weeks. These seamlessly expandable options allow companies to start now and focus on the most important initiatives. All based on RapidResponse, these options can grow over time to meet budget, team and change management needs along the digital transformation journey.

"Gartner defines a supply chain planning (SCP) solution as a platform that provides technology support which allows a company to manage, link, align, collaborate and share its planning data across an extended supply chain. It supports demand creation through to the detailed supply-side response and from strategic planning through tactical-level planning. An SCP solution is the planning decision repository for a defined end-to-end supply chain and is the environment in which end-to-end integrated supply chains are managed. It establishes a single version of the truth for the plan data and decisions, regardless of the underlying execution technology environment." 1

The SCP market was worth $5.2 billion in 2019 and is projected to grow at a five-year compound annual growth rate (CAGR) of 7.5% according to the Gartner Forecast: Enterprise Application Software, Worldwide, 2018-2024, 4Q20 Update. 2

According to Gartner, "Leaders demonstrate strong SCP solution vision and execution capabilities. They have a broad, deep and differentiated functionality that addresses a broad range of user requirements. Their coverage across the three categories of planning capability -- configure, optimize and respond -- is good enough, with a good balance across the categories now and/or planned for the future. They have a reasonable range of features to support a user's maturity journey. Their visions for supporting the three paradigms of SCP -- algorithmic SCP, digital supply chain planning and resilient planning -- align with Gartner's vision. When these three paradigms are blended together, they build the foundation to support a Level 5 SCP environment. Leaders anticipate where customer demands and markets are moving and identify how innovative technologies can be applied to planning applications. They have strategies to support these emerging requirements to build a future-proof SCP solution. Because leaders are well-established in leading-edge complex user environments, they benefit from a user community that helps them remain in the forefront of emerging needs." 1

For further information, you can access a complimentary copy of the full Magic Quadrant for Supply Chain Planning Solutions report here.

1 Gartner, Magic Quadrant for Supply Chain Planning Solutions, A. Salley, T. Payne, P. Orup Lund, Feb. 22, 2021

Gartner, Magic Quadrant for Sales and Operations Planning System of Differentiation, T. Payne et al, May 7, 2019; Gartner, Magic Quadrant for Supply Chain Planning System of Record, Payne, Tim, Pradhan, Alex, & Salley, Amber, 21 August 2018

2 Gartner, Forecast: Enterprise Application Software, Worldwide, 2018-2024, 4Q20 Update, Amarendra, N. Gupta, B. Abbabatulla, A. Woodward, C. Pang, C. Roth, E. Hunter, J. Hare, K. Quinn, J. Poulter, Y. Dharmasthira, J. Kostoulas, December 22, 2020

Gartner Disclaimer:

Gartner does not endorse any vendor, product or service depicted in our research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.


About Kinaxis Inc.

Everyday volatility and uncertainty demand quick action. Kinaxis® delivers the agility to make fast, confident decisions across integrated business planning and the digital supply chain. People can plan better, live better and change the world. Trusted by innovative brands, we combine human intelligence with AI and concurrent planning to help companies plan for any future, monitor risks and opportunities and respond at the pace of change. Powered by an extensible, cloud-based platform, Kinaxis delivers industry-proven applications so everyone can know sooner, act faster and remove waste. For more Kinaxis news, visit Kinaxis.com or follow us on LinkedIn or Twitter.

Forward-Looking Statements

Certain statements in this release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements as to Kinaxis' growth opportunities and the potential benefits of, and demand for, Kinaxis' products and services. These statements are subject to certain assumptions, risks and uncertainties, including our view of the relative position of Kinaxis' products and services compared to competitive offerings in the industry. Readers are cautioned not to place undue reliance on such statements. Kinaxis' actual results, performance, achievements and developments may differ materially from the results, performance, achievements or developments expressed or implied by such statements. Risk factors that may cause the actual results, performance, achievements or developments of Kinaxis to differ materially from the results, performance, achievements or developments expressed or implied by such statements can be found in the public documents filed by Kinaxis with Canadian securities regulatory authorities. Kinaxis assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.

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