Earthworm pilots digital payments in Ghana

October 28, 2022

At the beginning of this year, the Earthworm Foundation and New Venture Fund started a partnership to address financial inclusion in Ghana’s cocoa sector.

The aim of the partnership is to support brands’ NDPE (No Deforestation, Peat and Exploitation) commitments by using a digital payment system for farmers. Historically, cocoa purchases in Ghana have been paid for using cash, which has spawned challenges related to theft, armed robbery and in the worst cases, loss of life to farmers and Licensed Buying Companies.

Earthworm Foundation’s approach was to identify key stakeholders, test a digital payment system and share lessons learned from this. To gather data, field teams in Ghana engaged stakeholders on how to successfully implement a digital system. Those involved included banks, telecommunications companies, Better Than Cash (BTC) Alliance, Civil Society Organisations (CSOs), World Cocoa Foundation (WCF) and Licensed Buying Companies.

In March this year, the foundation also conducted a survey to gather primary data on farmer perception of an effective digital payment system; what this would look like. This covered 1000 cocoa farmers in the Western and Western North regions of Ghana, while a pilot survey was also conducted in the Ashanti and Eastern regions of Ghana.

Results from the survey demonstrated only 15% of farmers subscribe to digital payment through banking institutions, such as Rural and commercial banks. The majority of farmers (75%) do not subscribe to digital payment services. Most farmers subscribe through mobile money services. 91% of those interviewed like mobile money because of its speed and convenience. Only 2% of farmers interviewed use digital payments for payment of cocoa beans and receiving premiums.

Much of the income from additional livelihood activities is not received digital. Of the few farmers who have received digital payments, only 44% reported being satisfied with the service. Most of the farmers interviewed were familiar with mobile money transactions, and 72% had mobile money accounts.

Data gathering was the first step, to identify key factors for implementing a successful digital payment system. The next step of the project will be to involve a partnership with local Licensed Buying Companies to pilot a digital payment system in Ghana and share findings.

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