CardPesa is enabling small businesses access instant working capital

By Our writer

While majority of Uganda’s youth have resorted to running small businesses due to the high unemployment rate, their businesses suffer high failure rates due to, among others, inability to access credit.

This is mainly because most lenders ask for collateral, which most of them do not have.

However, Discount Cards Limited’s CardPesa solution, an online platform that enables ordinary people to access revolving credit on their mobile devices or digital wallets, could salvage them.

According to the Discount Cards Limited Managing Director, Nelson Kituuka, the solution enables people access collateral-free working capital loans instantaneously to invest in their businesses so as to maintain or increase their earnings.

 “We will not provide you money to buy a house, land or Boda Boda, but we shall give you money to fuel your Boda Boda so that you can work. We will give you money to buy ingredients to bake cakes or provide you money to ensure that your daily activities are not hindered by lack of that small ingredient you need to carry out your business,” Kituuka explains.


Instead of asking for physical collateral, CardPesa assesses the borrower’s credit worthiness and loan limits using five Cs – the borrower’s character, capacity, capital, available conditions in the environment and collateral – which in this case is in form of one’s bio data, references and one’s business or work place.

The borrower is, however, required to subscribe to the platform and access funds for a period of the year they have subscribed via

Kituuka says that if one is subscribed for a year and their monthly limit is UShs500,000, they can access up to UShs6 million by the end of the year, as long as they pay back the borrowed money for that particular month within 30 days.

Basing on one’s credit history on the platform; their limits can be increased and even given better service, according to Kituuka.

To provide the loan service, CardPesa integrated into Airtel Money, MoMo Pay and banks to easily provide instant credit to its clients.

For safety, the CardPesa platform uses a two factor-authentication. A user is thus required to have a secret PIN and to remove the money off the platform; they also need an operator PIN. For instance, if one uses Airtel or MTN mobile money, they will need that secret code or that to their bank account before the money can be released.

While a third of CardPesa’s clients are women, Kituuka says that women are less likely to take loans mainly because they are more risk averse.

To raise their appetite for loans, Kituuka notes that they are looking to partner with organizations that want to empower women and show them that they can borrow and use the credit to increase their revenues.

40-Days 40-FinTechs

Discount Cards is among the firms participating in the ongoing second edition of the 40-Days 40-FinTechs initiative, organized by HiPipo in partnership with Crosslake Technologies, ModusBox and Mojaloop Foundation, and sponsored by the Gates Foundation.

Kituuka applauded HiPipo, saying that 40 Days 40 FinTechs is a move in the right direction as it highlights the different FinTechs and their solutions so that the different sector players see what others are doing and seek to form synergies.

“I thank HiPipo for initiatives like 40 Days 40 FinTechs. To win as FinTechs, the public needs to know what is out there. I was one of the biggest skeptics of what HiPipo was doing but I have watched videos of the players featured and it’s incredible. As a lender, it is important for me to know that there are farmers in this place, with this amount of produce and need this amount of money,” he says, adding that the biggest problem for doing business in third-world countries is the inability to access information on which to base decision making.

The HiPipo Chief Executive Officer Innocent Kawooya says that this year’s edition of the 40-Days 40-FinTechs initiative has showed that there are several FinTech solutions on the Ugandan market, with things like distributed ledger technologies, Artificial Intelligence, Big Data, Automated Customer Relationship Management, cash management and lending platforms, among others being showcased.

He notes that equity of access to credit is key to achieving business success and financial inclusion.