Women farmers need better financing to benefit from AI

[SciDev.Net] Public and private investments must address the financial barriers preventing women from benefiting fully from digital technologies and artificial intelligence (AI) as multiple global crises and aid cuts bite.

That’s the view of Shobha Shetty, a senior agricultural adviser to the World Bank and head of the Global Agriculture and Food Security Program (GAFSP), a World Bank-hosted multilateral finance platform that supports agriculture, food security, and climate‑resilient development in low‑income countries.

Shetty warns that too often women are treated as numbers when it comes to digital access.

Women risk being left behind in the “polycrisis” of climate change and mounting food insecurity without deliberate action to increase their rights to land and water, and their inclusion in digital innovation, according to a report published on Thursday (15 October) by the global agricultural research network CGIAR.

Rising fertiliser prices caused by conflicts in Ukraine and the Middle East, plus a severe El Niño weather event this year, are also increasing pressures on smallholders, particularly women, said Shetty in an interview with SciDev.Net.

“These are confounded crises and it is smallholder farmers globally that really suffer the most,” she said, highlighting a World Food Programme report that found that 645 million people—about 7.8 per cent of the world’s population—are facing food and nutrition insecurity.

For Shetty, increasing the number of women using digital agricultural tools, such as AI-powered climate and pest advisories, is only part of the challenge. Equally important, she says, is ensuring women can afford these technologies, influence their design and benefit from the value they generate.

Speaking ahead of an event held Thursday (15 October) at the UN Food and Agriculture Organization (FAO) headquarters in Rome on the sidelines of the World Food Forum, Shetty said investment in digital agriculture must go beyond counting beneficiaries.

“We need to look at what we have to do to ensure that investments in digital agriculture really benefit more women, rather than just talking about how many women we reached,” she said.

Women in low- and middle-income countries make up 38 per cent of the global agricultural labour force and 41 per cent of the off-farm agrifood workforce, according to the CGIAR report. But many still face systemic barriers that limit their productivity, earnings, decision-making power, food security and climate resilience, it warns.

The report, called Advancing Equality, Transforming Futures, says solutions must be co-designed with women and financed in a way that reflects their realities.

Psychometric testing

Shetty cites an experiment supported by the World Bank’s Africa Gender Innovation Lab in Ethiopia where women entrepreneurs were assessed for loans and given a credit score using psychometric testing. This was instead of loans based on financial collateral—assets available to secure a loan—which women in poorer countries often lack.

“Over three years, 89 per cent of women offered the product borrowed formally, compared with 42 per cent in a comparison group,” said Shetty.

“The technology helped because the lenders really accepted a different basis for lending.”

Access to the psychometric-appraised loans also increased business survival rates through the COVID-19 pandemic and conflict in Ethiopia, the study found.

How finance reaches women matters, Shetty stressed. She pointed to a study in Uganda, where women who received loans through mobile money accounts enjoyed 15 per cent higher profits than those receiving their loans as cash.

“Providing an account while still paying in cash did not really provide the same sort of benefit because women have less control over it,” she explained.

For agricultural finance to work for women, Shetty argues, investments must connect better information with affordable products, repayment schedules aligned with farm income and payment channels women can control.

From access to empowerment

Shetty says the GAFSP has moved beyond counting female beneficiaries to identifying and acting upon specific gender gaps and measuring change.

“How many women access the technology is a starting point but we also need to ask whether that access leads to skills, incomes, opportunity and decision-making power,” she said.

She highlighted a GAFSP-supported project in Bangladesh that is working with a local potato cooperative to give members access to the FAO’s RuralInvest digital tool for managing accounts, financial records and investment plans.

Through the initiative, women have been able to take responsibility for the cooperative’s accounts and develop an understanding of the business behind the data, she said, strengthening their position within the cooperative and opening up new employment prospects.

Since it started in 2010, GAFSP has invested nearly US$2.5 billion in more than 300 public- and private-sector projects in low-income countries, mostly in Africa, Asia and Latin America. Many are in fragile or conflict-stricken countries.

Some 41 per cent of its beneficiaries are women.

The programme has recently introduced a new Business Investment Financing Track which aims to address the financing gap faced by small and medium-sized agricultural enterprises. Initial investments totalling US$14million, in partnership with the African Development Bank, are hoped to catalyse up to US$200 million in private-sector lending across Ethiopia, Uganda, Tanzania, Malawi and Zambia, said Shetty.

A second allocation, announced at the Africa Food Systems Forum in Kigali in September, provided US$6 million to help mobilise another US$15 million from development and financial partners, supporting a US$21 million package for smallholder farmers in Rwanda.

The approach uses grant funding to reduce investment risks and attract other sources of capital.

In the wake of “brutal” cuts to overseas development assistance, added Shetty, leveraging private and public sector capital is critical “to make the pie larger for everyone”

This piece was produced by SciDev.Net’s Global desk.