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Digital banking services for rural farmers – scaling up and scaling out

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Blog

Launched in 2014 and winner of the first CTA Agrihack Championship, Ugandan start-up Ensibuuko is helping savings and loans cooperatives to become efficient and bankable by digitising how they manage customer data and transactions, and piloting their shift to a cashless and paperless system. Well on its way to scaling up the business within Uganda, the digital company is now looking further afield to extend its reach beyond national borders.

When Gerald Otim unveiled his fintech start-up 4 years ago, his goal was to offer improved access to better financial services in rural areas of Uganda. Seeing an opportunity to increase the efficiency of rural financial service providers, such as a Savings and Credit Cooperative (SACCOS) or Credit Unions, the start-up developed MOBIS – a cloud-based, customised banking and management system, which worked rapidly and effectively, even in rural areas with poor telecoms infrastructure.

The Ugandan company swiftly moved into offering mobile money services, integrating MOBIS with a digital payment platform to enable farmers to deposit and withdraw money from their financial cooperatives by mobile phone, and to negotiate and receive a loan the same way.

It has proved a winning formula. Ensibuuko is currently working with over 50 savings and credit cooperatives, reaching more than 200,000 farmers in the process. To drive adoption, the company invests heavily in education on digital finance for cooperatives, by staging training workshops and other initiatives.

“We have an in-house training programme to try to change mindsets, which is essential in our business,” said Otim, Ensibuuko’s founder and CEO. “That makes the cost of selling digital solutions to rural cooperatives quite high. You have to invest in educating people. You have to get them to the point where they are comfortable and ready to let go of paper. That is the biggest challenge.”

Scaling up also involves having the right technology and infrastructure in place. Ensibuuko’s solution has been to team up with mobile networks to customise an internet package, which offers fast and reliable connectivity at an affordable price.

Now ready to extend its business model to other African countries, Ensibuuko is laying the foundation for expansion, initially to Nigeria, Tanzania and Zambia. The young fintech company has opted for a franchising model as the most effective channel, and so far, the results have been encouraging.

“We have identified local businesses in each country and have made a commercial deal that allows them to take a share of the profits,” said Otim. “Experience has shown that you need to tweak the model country by country, but there is clearly a need, and it seems to be working.”

Ensibuuko has yet to move into profit, but its revenue stream is growing steadily. Its link with CTA, first forged when it won the AgriHack in Kigali, Rwanda in 2013, remains strong. The company is closely involved in the CTA-led Market-led, User-owned ICT4Ag-enabled Information Service (MUIIS), where it is in charge of handling the delivery platform of a bundled service offering weather alerts, agronomic tips and index-based drought insurance to farmers.

Otim remains firmly convinced of the value of working with partners to scale up and out, harnessing synergies to produce greater impact.

Said the Ensibuuko founder: “It is probably no coincidence that two of the three franchising partners we have hooked up with to scale out to other African countries were people we first encountered through CTA networking.”

This article was created through a CTA-led process to document and share actionable knowledge on 'what works' for ACP agriculture. It capitalises on the insights, lessons and experiences of practitioners to inform and guide the implementation of agriculture for development projects.

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