A quick scan through the daily newspapers will show you how many people are losing their businesses to financial services providers for failure to service a loan. Financial services providers usually don’t care if you made a profit or a loss on the money they gave you; they just want their money back plus the interest accrued. If you fail, they advertise and sell the collateral.
It is this unfortunate reality that partly inspired Kakande Farid Gava and four others to start Zukuka Traders Limited, a digital saving and loan product based on the Islamic banking system.
“We have two fundamentals in Islam that drive finances; Profit and Loss Sharing – this is mainly for businesses… We share the profit and loss as long as the loss is not bound to the clients. We consider the loss as natural. The second principle is interest-free loans. At Zukuka, we give loans without expecting any interest. If you take Shs 500,000, we expect the same amount on return,” Kakande, the Zukuka Chief Executive Officer, says.
On the technology side, Zukuka came to solve the problem of manual processes within Saccos because everything is digitized. Members can join using their Zukuka Mobile App, Website, and social media handles.
In the two years of operation, Zukuka has attracted more than 800 clients saving daily, weekly or monthly depending on their earnings.
“We try our best to reach about 75 million monthly in savings. For credit facilities, we give an average of 10 members monthly and expect a payback of 65 per cent in loans,” he says.
He adds that the Zukuka Mobile App allows users to track transactions in real-time. Clients can also carry out deposits on their Zukuka accounts via mobile money.
Meanwhile, Kawooya Hassan, one of the Zukuka members says it is the principle of zero interest that has impressed him most.
“I joined Zukuka Finance two years ago but I am very happy with it because of the reliable and efficient service. Our savings are safe and when you need a loan, it comes with no interest. We just have to share profits, if any,” he says, noting that even countries like Uganda are struggling to finance national budgets because of the high interest they have to pay to their creditors.
40 Days 40 FinTechs
Zukuka Finance is a fully registered Sacco under the Ministry of Trade, Industry, and Cooperatives and regulated by the Uganda Microfinance Regulatory Authority.
However, Kakande says people’s uptake of digital innovations is still a stumbling block in Uganda.
“People are illiterate about these technologies. We are trying our best to carry out training for our members. People also think technology involves a lot of fraud. For us, when a customer wants to withdraw money, we always request for a [secret] code to avoid fraud and embezzlement of funds,” he says.
He further appreciates initiatives such as 40 Days 40 FinTechs that are shining a light on emerging players in the FinTech space which is one way of building confidence among end-users.
“This initiative has helped giant companies to interact with SMEs. This has helped to build a relationship in business which eventually leads to economic growth,” he says.
Now in its fourth season, HiPipo’s 40 Days 40 FinTechs initiative has become a household name in the financial technology space of the East African region. In the last three editions, more than 100 FinTechs have been showcased, highlighting stories changing people’s lives, especially in the under-served sectors.
“This season we are happy to show the impact stories of these innovations. The likes of Zukuka are facilitating financial inclusion because we believe that in order to create realistic change, the cost of credit should be reduced significantly. And that is what Zukuka has done through their implementation of Shariah-compliant finance principles,” noted Innocent Kawooya, the CEO of HiPipo.
Zukuka Finance is participant number five in the 40 Days 40 FinTechs initiative, season four organized by HiPipo in partnership with the Level One Project, Mojaloop Foundation, INFITX, Cyberplc Academy, Ideation Corner and Crosslake Technologies and generously supported by the Bill and Melinda Gates Foundation.
One of the biggest business challenges is accountability. For instance, it is almost impossible for any organization to determine how much airtime or fuel was used by field staff in a given month. This is because the field staff usually pay out of pocket and claim the money later without proper proof.
But this is a problem that Xente, a financial technology company, is determined to end through their Visa Cards and automated online transactions.
Through a partnership with Visa, Xente is among the first FinTechs to issue both virtual and physical visa cards in Uganda. On top of this, Xente helps businesses, companies and organizations to automate company finances by providing a platform where companies are able to log on and open an account where they can make bank transfers, mobile money, airtime, and data to their teams or beneficiaries and staff.
Between 2017 and 2023, more than 1,000 businesses such as NSSF and Jumia have benefitted from these services to ease their business transactions.
‘They are able to save time and money while ensuring proper accountability,” says Lyn Tukei, the Head of Public Relations and Marketing at Xente.
‘For instance, if you have to send money to more than 1,000 people, you don’t need to walk to that mobile money agent anymore. All you need is to get onto our platform and send money to as many people as you want across various networks. This comes in handy across businesses that use a lot of time and money while making these transfers,’ she notes.
Tukei says automation helps businesses to approve every payment, track every transaction in real-time, manage money across teams, branches, and/or countries, and sync data with their accounting platforms.
How does one get Xente?
“It is very easy, just like any other bank account. It integrates what the banks and telecoms do. All you need is to log on to the Xente website and you will be able to create an account. If you are already registered, you just simply log in and see the various features that you are able to use. If you are new, they will ask for simple KYCs like the certificate of incorporation to make sure that you are a registered business. It becomes easy for you to start sending out bulk SMS, data, mobile money, airtime, and bank transfers, and issue virtual and physical visa cards. All you need is an Excel sheet of all the targeted beneficiaries. You can automate all your payments in real-time.’
40 Days 40 FinTechs
Xente is the fourth participant in Season Four 40 Days 40 FinTechs initiative that seeks to highlight the impact of FinTechs in the lives of under-served populations.
‘The 40 Days 40 FinTechs initiative has been helpful in elevating FinTech space in Uganda. There’s not so much awareness being done about FinTechs like in rural areas but this platform has amplified the message to the people,” Tukei says.
HiPipo CEO Innocent Kawooya says the past three years have seen more than 100 participating FinTechs benefit from useful tools and an introduction to the industry’s emerging technologies such as Mojaloop Open Source Software, and guidance from Level One Project foundational material.
The skills gained from this initiative cover Level One Project Principles, Instant and Inclusive Payment Systems (IIPS), inclusive finance and FinTech in general.
‘Now we want to show the real impact of these FinTechs. If you hear that Xente is serving 1000 businesses, then we can comfortably say we are on the right track,” he said, sending his appreciation to the initiative’s partners including Level One Project, Mojaloop Foundation, INFITX, Cyberplc Academy, Ideation Corner and Crosslake Technologies.
BOU Compliant.
Xente is a Bank of Uganda licensed Payments Systems Operator (PSO) in Uganda. They also have a license of Issuer of Payment Instrument, which means that Xente is licensed to issue any payment instrument such as the Xente Visa Card.
Tukei calls upon other FinTechs to get out of briefcase management and obtain formal licensing.
‘I implore all businesses especially if you are dealing in payment instruments, it comes in handy to have a compliance license in order to be trusted by stakeholders, investors, and other partners,” she says.
She further talks up the increased FinTech uptake in Uganda, calling on developers to come up with user-centric solutions targeting people at the bottom of the pyramid.
Sometime in 2016, Jean Anthony Onyait was on a study trip to Tirinyi where he met a special woman that would change the story of his life.
This woman was called Akello. She was a village hero! A hero because she was in police custody for failure to pay a loan received from a microfinance institution on behalf of members of her village farmers’ group.
She was the leader of a group of smallholder farmers. They needed money to buy farm inputs but all had no collateral. Akello had inherited some property from her late husband and she decided to use it as collateral to borrow money and give it to group members with the hope that they would use the money responsibly and manage to repay the loan.
“Her group members failed to pay and she was arrested and the property was going to be taken. Just imagine what would happen to her children,” echoes Onyait.
On hearing this sad story, Onyait intervened. Together with the team he was with, they decided to travel back to Kampala, raise as much money as possible, and return to Tirinyi to settle Akello’s debt.
And he did not stop there. He was inspired to start Akellobanker, a digital infrastructure that can be used to enable millions of smallholders and SMEs to access important and life-saving collateral-free services such as access to farm inputs and extension services on credit.
“We gave our company that name in respect of Akello. AkelloBanker means a bank for people like Akello who want to see their production and productivity increase but they do not have the resources and information that can help them,” Onyait, the AkelloBanker Chief Executive Officer, says.
Lasting impact.
Born in Tirinyi, AkelloBanker has spread wings across Uganda, impacting more than 180,000 smallholders as well as Small and Mid-size Enterprises.
“These smallholders are farmers who are toiling every day to produce what we eat while the SMEs comprise input dealers who are in the local communities with small stalls where farmers go and access inputs,” he explains.
According to Onyait, more than 700 SMEs have been empowered and they have been able to digitize their agricultural supplies to the farmers. They are also able to access credit which they are able to use for restocking their inputs.
“Every year, we have at least five transactions done by each farmer. These are about 900,000 transactions within a given period of time. We have been able to power over 20 million dollars worth of credit which has passed through the system to facilitate the farmers,” he explains.
With this digital platform, a farmer using data-driven approaches can access a loan instantly using their mobile phones. It can be via a smartphone or any basic mobile phone.
“If they cannot access cash…they should be able to access inputs on credit…,” he says.
One of the SACCOs using AkelloBanker services is LWEDE [Lwengo Development Cooperative Society] in Lwengo district.
These are mostly involved in providing financial services to coffee and poultry farmers.
“They are powering our operations through a system called Quest and it has been very effective in financial management. Even when we get technical challenges, we reach out to them and they sort it immediately,” said Charles Asiimwe, the Lwede Sacco Manager.
Farmers are happy too.
According to Elizabeth Atugonza, she has borrowed from Lwede Sacco over 10 times using her phone and the system is very user-friendly.
Further, John Matovu Ssagala, a Lwengo-based farmer and member of LWEDE noted that the platform has offered him multiple loans that have helped him remain in business.
Onyait says they are powering Saccos in every part of the country such as Hakashinyi Sacco in Mitooma-Inshaka, Bunyaruguru Development Sacco, Achila Enterprises in Eastern Uganda, Oyam DFA in Northern Uganda, among others.
“Oyam DFA is one of the biggest farmers’ organizations which not only produces grain but we have been able to link them to Makerere University where they are able to get foundation seed on credit. We are able to facilitate all that,” he explains.
40 Days 40 FinTechs.
Onyait says that some of the challenges in driving financial inclusion in Uganda include limited infrastructure (internet and device access), illiteracy on how to use these digital services, and cyber security.
He is, however, happy that initiatives such as 40 Days 40 FinTechs are coming up to try and reduce the divide between the empowered community and the people at the bottom of the pyramid.
“The 40 Days 40 FinTechs initiative is a very strong platform to bring like-minded players into one place to share ideas and devise means on how we can deepen the financial sector. Since it comes from the issue of technology or financial technology providers, we are able to learn about the past challenges that commercial banks had to go through. We have been able to learn from the telecoms. So, the efforts by the different actors definitely give us a learning platform,” he says.
Now in its fourth season, HiPipo’s 40 Days 40 FinTechs initiative has become a household name in the financial technology space of the East African region. In the last three editions, more than 100 FinTechs have been showcased, highlighting stories changing people’s lives, especially in the under-served sectors. This initiative is run by HiPipo in partnership with the Level One Project, Mojaloop Foundation, INFITX, Cyberplc Academy, Ideation Corner, and Crosslake Technologies with support from the Bill and Melinda Gates Foundation.
AkelloBanker is participant number three of the fourth season of this initiative. Innocent Kawooya, the HiPipo CEO noted that AkelloBanker is a clear example of both the life and time-saving abilities of Financial Technology.
After a long day’s work recently, Fetaru Charity Flavia was late for a surprise birthday party for her friend. To make matters worse, she needed a quick make-up but she couldn’t go to her usual make-up artiste and make it to the party in time.
“Then I remembered I could order for a makeup artist using my phone. I immediately went to the Belle Beauty App and they sent me someone close to my location,” she says of Belle Beauty, a digital marketplace that connects beauty service providers to customers.
“This service is convenient for me. Now every time I want makeup, I just go to the App and find someone to have it done anytime at my place or at their offices. I use Mobile Money when I am done. I am happy with their service,” she adds.
On this day, it was Namulamie Hillah, a Makeup Artist at Hillah Beauty Uganda that is listed on Belle Beauty, who saved Flavia’s day. And on her part, since she joined Belle Beauty in 2022 as a makeup service provider, Namulamie has lots of good things to say about this platform.
“I have so far worked on more than 100 clients. The App has connected me to many customers who want makeup. It has helped a lot to build my brand name and meet more people since they have a wide range of clientele including celebrities,” she says, noting that she offers all types of makeup ranging from bridal, casual, photo-shoot, indoor and outdoor.
She says that a platform like Belle Beauty has greatly helped her tap into the clientele group that prefers to be served at their places of convenience.
Covid-19 product.
According to Alice Sharon Namugerwa, the CEO of Belle Beauty, this is a product of the Covid-19 pandemic which especially affected salon women that were put out of business because of the lockdown.
“During the pandemic, we got to understand which sectors were essential or not regardless of their profitability. We saw that the beauty sector which employs between 30,000 to 60,000 people in just the urban centers was not catered for and it left a question of what happened to all these people,” she says.
“And remember that most of the people in the beauty sector are majorly informal and didn’t have any business continuity structures.”
With this in mind, Namugerwa came up with a cost-free online platform where beauty service providers could register and get connected to clients regardless of time, place, or conditions. In two years, the platform has on-boarded over 80 service providers and served more than 1,000 clients.
“We would have more service providers but some fail our quality assurance mechanisms because they are in the informal sector. However, we don’t turn people away; we still give them an opportunity to meet clients after undergoing training. We connect them to beauty schools to get skills so that quality is assured for our customers that use the platform,” Namugerwa says.
To avoid losses, customers are encouraged to pay upfront using digital payment platforms such as Mobile Money.
“When you utilize our platform, you are required to pay upfront using mobile money. Once the payment is received, the appointment is then fixed with the service provider who is paid on the same day when the work has been successfully executed. The service provider is also paid using mobile money. We try as much as possible to be cashless so that we can ensure that all the players in the transaction are happy and safe,” Namugerwa says.
40 Days 40 FinTechs
Namugerwa owes Belle Beauty’s meteoric rise to its association with the HiPipo Include Everyone Program.
“When we tell people that we have been around for one and a half years, they can’t believe it. We started off participating in the Women in FinTech Hackathon and by the time we were included in the 40 Days 40 FinTechs, we had grown. Being on this platform validated our idea. This platform has taken us to spaces that we would have worked a little longer to achieve because of the mentorship and visibility that comes with the platform,” she says.
Now in its fourth season, HiPipo’s 40 Days 40 FinTechs initiative has become a household name in the financial technology space of Africa. In the last three editions, more than 100 FinTechs have been showcased, highlighting stories changing people’s lives, especially in the under-served sectors.
According to HiPipo CEO Innocent Kawooya, the testimonies coming from users of these platforms are a testament to the great work done through this initiative.
He further urges innovators to continue targeting people at the bottom of the pyramid who urgently need financial technology services to improve their lives.
CHALLENGED!
Flavia notes that on top of connecting people to service providers, they should as well add beauty makeup products “so that it makes it easier for us to get them.”
Namugerwa says this is part of the plan and this provision will soon be available on the App.
On the side of service providers, Hillah says sometimes clients make appointments and when you come to the hub in Ntinda or go to the agreed location, the client does not show up.”
Meanwhile, Namugerwa says that while there are many challenges facing startups in Uganda, the biggest one is funding.
“I can’t address the regulatory aspect because you will still need funding to satisfy it,” she says.
“Most importantly, you must be very patient with a startup because even when you provide the first funding, it doesn’t mean that you are going to break through immediately. We need funding for our companies to run for like five years because what we are trying to do is an innovative solution in an economy that is just trying to get innovative,” she adds.
“There are still challenges of access to the internet yet most of the solutions we are coming up with need access to the internet…For example, if I have developed an App, I am mainly looking at the urban sector but I want my App to be a solution for those at the bottom of the pyramid. However, they don’t have access to the internet. We could use USSD but you also need funding.”
Belle Beauty has been featured as participant number two in the 40 Days 40 FinTechs initiative season four. This initiative is run in partnership with the Level One Project, Mojaloop Foundation, INFITX, Cyberplc Academy, Ideation Corner, and Crosslake Technologies with support generous from the Bill and Melinda Gates Foundation.
On top of her job as a secretary at Buddo SS, Mary Caroline Nambogga is charged with the custodianship of pocket money of students at this school.
Nambogga says that this second role is actually more difficult than her primary job. First, she is not an accountant; second, some secondary school students are sharp and tricky.
“The paperwork is quite a lot. There can be shortfalls because some students can be crafty and others may not sign when they pick the money,” she explains.
In all, handling students’ pocket money in cash is a hectic affair altogether, plus, whenever students have cash, the occurrence of theft among them is very high.
However, this nightmare has recently become a thing of the past, with the introduction of Kawu smart cards at this school.
Founded in 2021, Kawu Smart Card is an automated Digital Financial Services platform that allows parents and students to conveniently manage pocket money. A parent just deposits the student’s pocket money onto the Kawu wallet and the student uses the Kawu Smart Card to make transactions while in school.
When this service was introduced at Buddo SS early this year (2023), Nambogga was installed as the Kawu Agent in this school.
“The card has come in handy not only in sorting record-keeping challenges but also waived a big load off our shoulders of being able to give pocket money to students according to the parent’s demands. In a way, this helps a parent to set a limit for their children,” Nambogga says.
Convenience, Safety.
According to the KAWU co-founder, Gerald Ssebunya, this service was built in 2021 to bring control back into the hands of parents by determining how much a child can spend at a given period.
He explains that parents just need to download the mobile application from Play Store or App Store and start sending and monitoring the expenditure of their children.
The students are happy too.
Palvin John Ndawula, a Senior One student at Buddo SS says this card has not only made it easy for his parents to send money, it also keeps his money safe!
“For example, my parents would previously give me money and I keep it in my suitcase or I leave it somewhere and they steal it. With the card, my money is safe. The card also has an account number and no one else can use it besides me. This is the best card,” he says.
“At my former school [in primary], we used to keep money with the school bursar and when you go to ask for it at the end of the term, some of the money would be misplaced. Your money is extremely safe with this card.”
Similarly, Salmah Nadia Nakabuye, also in Senior One at Buddo SS, is equally impressed.
“When I want more money, I don’t ring my mother but she looks at the App and sends money directly to my card. I would like to tell students to register and get the card because it is safe and convenient. When the card is lost, they can replace it and your money remains safe,’ she says.
Impactful.
Ssebunya notes that between 2021 and 2023, they have reached over 200 schools with 54 of them coming on board.
“We have managed to activate over 10,000 students where at least 9,000 are actively using the smart card. We also have 15,000 parents that have activated and downloaded the application,” he says.
Ssebunya explains that this service has attracted much attention because it is easy and secure.
“When activating this smart card, we take their photo, name, and parent’s phone number. Once you download and sign up using the number that the student gave us to activate their card, the App automatically links to the student’s card. A parent now has the ability to send money from their mobile money account straight to their child’s smart card. We allow them to set up a five-digit password that they use to secure their card,” he says.
The parent can monitor the child’s account through the App and be able to tell if their child needs a top-up.
Ssebunya says they plan to reach millions of students across the East African region in the next five years.
“We have a big market opportunity of over 40 million students around East Africa and in the next five years, we are looking at serving 30 per cent of this size,” he says.
At Buddo SS, the cards are so far being used by Senior One and Senior Five students but the plan is to phase out cash transactions and only accept pocket money through this card for the entire school.
Not Without Challenges.
Just like any other electronic device, the card has its shortfalls. Nambogga notes that when the number of users increases, there is always a network problem.
This is common on visitation days when many people have logged into their accounts.
Since it is still new, some parents have also not understood how to use it which necessitates Nambogga to make several calls to direct them on how to deposit the money from their mobile money accounts to the cards.
40 Days 40 FinTechs.
Kawu is participant number one in the fourth season of the 40 Days 40 FinTechs initiative, season four organised by HiPipo to showcase innovations that are enabling underserved populations to join the digital economy space. This initiative is run in partnership with the Level One Project, Mojaloop Foundation, INFITX, Cyberplc Academy, Ideation Corner, and Crosslake Technologies with support generous from the Bill and Melinda Gates Foundation.
Ssebunya confesses that Kawu’s success story is mostly because of their participation in this initiative which introduced them to the FinTech community, specifically with the mentorship of HiPipo CEO Innocent Kawooya.
On his part, Kawooya says that with such impact stories as Kawu’s, the 40 Days 40 FinTechs initiative is indeed bearing fruit.
“This year we are paying keen attention to the actual impact of each featured Innovation across East Africa. For three years, we have shone a light on marvellous innovations but now we want to see how they have benefited the intended users,” Kawooya noted.
Kampala, Uganda. We are happy to announce that registration for the fourth edition of the HiPipo 40 Days 40 FinTechs has opened. Without a doubt, the HiPipo 40 Days 40 FinTechs initiative has put the Innovation and Financial Inclusion bar very high; particularly showcasing both the time and lifesaving abilities of Financial Technology.
Although the 2020 and 2021 seasons ran in the middle of the COVID-19 pandemic, they laid the groundwork for this project with more than 200 submissions and about 85 shortlisted participants altogether. The third edition, which ran in 2022, was even much bigger and better as it focused on the East African region. Some 47 participants, drawn from Uganda, Kenya and Tanzania were featured, out of more than 150 submissions. It was captivating to find out how Financial Technology (#FinTech) is transforming the lives of millions from across the region.
Run under HiPipo’s Include Everyone program that also encompasses other initiatives such as FinTech Landscape Exhibition, Women in FinTech Hackathon, Summit & Incubator, and the Digital and Financial Inclusion Summit and Digital Impact Awards Africa; the #40Days40FinTechs platform aptly provides a setting for the various players and stakeholders involved in digital and financial technology to exhibit their products and services. It also gives players a platform to share their ideas on how the unserved and underserved by the present financial systems can be brought into the fold.
“40 Days 40 FinTechs Season Four is here and will specially focus on not only Innovativeness but will also pay keen attention to the actual impact of each featured Innovation. We shall move to all regions in Uganda, in addition to engaging participants from across East Africa. In all these places, we shall interact with the Innovators and the end-users of their innovations,” Innocent Kawooya, the HiPipo Chief Executive Officer noted.
He added: “We shall seek to find out how all these innovations have changed people’s lives, how the innovators have made the communities they serve in better, and how they have contributed to economic transformation at all levels. We shall also collect feedback on what must be done to make these innovations better and how to scale them to reach even more people. This season, we shall tell the social, economic and cultural impact of FinTech Innovations.”
#40Days40FinTechs continues to be the world’s premier showcase event for innovations that are enabling underserved populations to join the digital economy space. We know that this can only get better owing to the inspiration and collaboration of our partners; Level One Project, Mojaloop Foundation, INFITX, Cyberplc Academy, Ideation Corner and Crosslake Technologies. Most importantly, the initiative owes its continued success to the generous support of the Bill and Melinda Gates Foundation.
Now is the time for Digital Innovators and FinTechs from all over East Africa to register before 12th May 2023 and stand a chance to participate in 40 Days 40 FinTechs Season Four. Participation is on a first-come, first-serve basis as long as your submission meets all the participation requirements.
Important Dates.
40 Days 40 FinTechs Participants Registration: 20th April to 12th May 2023. Registration link is available on www.HiPipo.org
Profiling and Featuring 40 Days 40 FinTechs Participants: 1st May to 16th June 2023.
FinTech Landscape Exhibition: 7th July to 8th July 2023.
In their paper titled “Advances in Real Time: Challenges and Solutions in Interoperable Payment Systems,” Kosta Peric, Miller Abel, and Matt Bohan discuss the complexity of dealing with cash. I refer to this paper when discussing elements like interoperability, Level One Project (L1P), and Instant Inclusive Payment Systems (IIPS) that are key to designing Digital Financial Services (DFS) for low-income users.
Finance centers around exchanging something valuable for more of what you want. For most people around the world, making payments is a fundamental financial action – whether using cash, SMS, or cards.
The choices people make while transacting are largely dictated by whether they prefer to pay with cash or use a digital payment system. In most cases, cost and convenience take precedence in making that choice. And these decisions are made quickly because the need for the service or product is immediate. Therefore, real-time payments are now a high priority for businesses and people.
Good enough, providers can now reach customers they previously couldn’t. These include people with very limited assets who are either unbanked or underserved by traditional financial services. The development of the Level One Project, an initiative to promote the creation and evolution of inclusive, interoperable digital payment platforms, is a response to such trends.
Despite the rise in digital financial services usage, an estimated 500 million adults are still financially excluded globally. Financial exclusion is majorly a result of the limited usage of open-loop, cost-effective, real-time, secure retail payments systems to connect low-income consumers to formal financial systems.
Of the 736 million people worldwide who lived on less than $1.90 a day in 2015, about 413 million were residents of sub-Saharan Africa. Several economic studies suggest that between 10 and 30% of households escape poverty in sub-Saharan Africa over a 3–10 year period. This is done by taking advantage of opportunities, such as finding a new job or starting a micro business. However, the sad fact is that a similar number of people fall back into poverty due to economic setbacks or life shocks.
Many people are more concerned with saving face than they are with ensuring a quality sustainable lifestyle. The ability to offer services that can sustain positive change in the face of shocks is key for innovators to achieve sustainability. They would help in modeling how low-income users can best access opportunities to better their own lives. At HiPipo, we have used our experience, working with global partners to develop ideas about how financial inclusion can be achieved. Digital financial services are powerful in their ability to help people transition onto formal systems and take advantage of opportunities. For example, today people can easily rely on a trusted ride-hailing service when they need one. A Boda Boda or taxi they can call with ease. Additionally, the growing number of digital transactional channels have proved efficient and meet the needs that low-income users value.
However, if we don’t address the barriers that limit sustainability and affordability, digital payments will continue to move slower than they should. Today, innovators and founders can use affordable solutions like Cloud-based services such as Azure and AWS to reach out to poor people. Most traditional transactions—especially those involving physical goods, services, or information—are still too expensive unless they can be handled digitally.
Lowering the cost of digital transactions over cash makes them more appealing, thereby creating attractive user experiences. The most efficient systems are those that provide users with high-quality, inexpensive transactions. Digital solutions improve lives and households, promote savings and confidence.
Creating simple variable cost structures that can be tailored to each user’s needs is preferable to creating a one-size-fits-all fixed structure. This is an important consideration when budgeting for the infrastructure needed to support innovators’ target users. This can eventually be distributed to thousands, millions, or even billions of transactions and users. The challenge is in finding an environment that provides the right number of users that can be served at a cost low enough to be feasible. The cost of the product you want to offer should be affordable compared to what people in traditional branches would pay.
For every user, income streams are not the same. This makes it extremely difficult to overcome the challenges associated with high transaction costs and traditional paper transactions. Over the years, it has become clearer that traditional financial services are unable to serve so many users. If more users can move into digital services, many of these challenges will be overcome. For example, Cash is accepted everywhere, but it’s often expensive to use. Transferring cash using informal couriers and lenders is also costly.
Interoperability helps mobile money services expand their reach into the merchant and bulk-payment markets. Most innovators lack the data needed to understand how to design affordable, interoperable financial products. Those that address the real issues facing low-income people. Many people are investing in learning about the behavior of poor people. These advancements are allowing many people to meet household needs in ways they never could before.
Most digital transactions do not require human intervention to complete as in traditional paper-based systems. We should provide solutions that address the economic barriers to the adoption of new technologies. We should also make sure people have enough information about these technologies. Many innovators are working to find such solutions.
The mobile phone has become an essential part of modern-day life. People are increasingly being served in bulk on the convenience of phones. These approaches are helping to build trust among low-income users. Advocates, supported by private foundations and funders are helping to spread word about financial products that can benefit those least likely to have access. We all must prioritize conversations about the best way to create solutions that work well with low-income users.
Undeniably, digitally-enabled solutions have reached people who had never been able to access such services – like poor women in some of the most remote areas on Earth.
In terms of financial infrastructure, an interoperable payment platform is one of the most important pieces. It is the point at which the daily financial actions of customers meet and rely upon holdings by providers. Such platforms are often organized on a national scale because of country-specific currencies and regulations. However, regional and international systems are also important. We see this in the EU, South African Development Community (SADC), and credit card providers like Visa or MasterCard. By doing holistic impact investment on digital infrastructure, we will see the influence of digital services on agriculture, education, and healthcare. Taking these actions will improve trust and user perception among low-income people. Investment in public-private infrastructure can have a major impact on the living conditions of poor people. Players are working with public and private sector providers to develop sustainable impact measures.
According to McKinsey, by 2025, the e-payment market is expected to reach $40 billion in revenue from domestic payments alone and process 188 billion transactions. However, Africa’s growth in e-payments will likely be uneven, depending on factors such as infrastructure readiness, regulation, and mobile penetration. To better accommodate the digital age, a few countries have made advances in their policy frameworks, electronic payment systems, and infrastructure.
A 2022 report by AfricaNenda found that nearly 30 instant payment systems operate in Africa. Most continue to be designed for use by only a few financial institutions and rely on high transaction values.
The design principles outlined in the Level One Project guide provide a valuable tool for increasing and sustaining digital financial inclusion. The Mojaloop OSS, together with the APIs and strategies inspired by distributed ledger technology, fosters a vision of an interoperable ecosystem. As such, banks, government entities, merchants, and mobile money operators can all work together to promote financial inclusion among underprivileged groups.
Interoperability will hasten innovation for real-time payments solutions in person-to-person, merchant point of sale, payroll and bulk payment transfers; multiple accounts, users and fraud monitoring. Organisations like HiPipo are known for championing digital innovation, Interoperability and Instant, Inclusive Payment Systems (IIPS) across Africa.
The HiPipo Include Everyone Program provides a platform for governments and other stakeholders, including private sector organizations, to work together to promote financial inclusion in Africa. The Program draws on experience gained, advocating for the reduction of interoperability challenges that lead to exclusion from financial services among poor and vulnerable groups. The Include Everyone Program features the implementation of the 40 Days 40 FinTechs Initiative, Women In FinTech Hackathon, Summit and Incubator; Digital Impact Awards Africa, and the Digital and Financial Inclusion Summit.
The program offers technical training on how to promote the deployment of payments systems that are secure, universal, and competitive. It supports governments by providing technical and policy advice on cutting-edge issues, promoting secure ICT deployment for sector development and strategic investment.
We also have the HiPipo Women In FinTech magazine that highlights women’s contributions to and achievements in the financial technology industry. It explores challenges facing women working in finance and tech. The magazine is part of HiPipo’s efforts to promote diversity and inclusion in the digital innovation industry. Furthermore, the magazine supports raising awareness about the significance of women in shaping the future of finance and technology. Women must be prioritized for the knowledge and tools to build successful tech initiatives, for what they do shall ultimately serve communities better.
Building an interoperable payment platform on a national or regional scale is no small accomplishment. It requires a clear focus on the ultimate objectives, effective governance and oversight, and an awareness of potential obstacles. Interoperability can be achieved by overcoming two key technological barriers namely;
Lack of an efficient clearing system in which to settle payments across different financial service providers.
Lack of a standardized method for connecting these providers to a common platform.
The L1P and its reference implementations address both of these issues. Building L1P-aligned platforms can help overcome some of the key barriers limiting full financial inclusion.
Interoperable instant and inclusive payment systems promote sustainable and inclusive economic growth. They support the transfer and receipt of low-value payments at any time, and at an exceptionally low cost that may introduce the unbanked to the formal financial system.
We are excited to share with you the Women In FinTech Magazine—January 2023 edition. A magazine that is solely dedicated to Women In FinTech.
These women have set an example for other women to follow. The Women In FinTech magazine increases the visibility of female leaders in the field and strengthens their connections to other participants. It also encourages more women to pursue careers as innovators, entrepreneurs, and executives in financial services.
It is a compilation of interviews, opinions—and many more elements. This includes an impressive list of 100 #WomenInFinTech. The list recognizes women leaders in FinTech who are solving sticky gaps and creating solutions within previously excluded, untapped or underrepresented markets.
We express our gratitude to Cyberplc Academy, INFITX, Crosslake Technologies, Mojaloop Foundation, #LevelOneProject and the Bill & Melinda Gates Foundation for their generous support.
We also appreciate the efforts of the team that worked hard to produce this magazine.
Information and Communication Technology (ICT) has transformed Africa’s financial infrastructure. Initial focus has been on giving rich and middle-income users access to advanced digital financial tools. However, the Financial Technology (FinTech) industry will not support sustainable and inclusive growth fully unless all consumers, including low-income and vulnerable groups, which are usually excluded by the traditional banking network, are enrolled into the formal financial system.
HiPipo advocates for and supports Digital Financial Service Providers (DFSPs) who deploy solutions that meet Level One Project (L1P) Design Principles: accessible, reliable, valuable, affordable, and profitable. Indeed, we launched the 40 Days 40 FinTechs programme to encourage the development of a sustainable financial ecosystem that is geared towards meeting the needs of low-income users. Since the inaugural 40 Days 40 FinTechs season in 2020, we have profiled over 100 FinTechs. Working with our local and international partners, HiPipo has supported the nascent FinTech sector by providing access to technical and business skills. For example, we coordinate Mojaloop training that shows DFSPs how to build interoperable, digital payment systems that seamlessly connect stakeholders, such as individual users, banks, government entities, merchants, mobile network operators, providers, and technology companies.
As ever, we are most grateful for the ongoing support of the Bill & Melinda Gates Foundation.
This year, the 40 Days 40 FinTechs programme profiled 47 participants that offer unique solutions to local problems across Africa. For example, Little, a Kenyan FinTech, is revolutionising the transport sector. FutureLink Technologies enables SACCOs to access wholesale credit at 2.5% per annum while the average bank rate in East Africa is 18%. WomenSave uses mobile money accounts to enable unbanked women to save.
We are immensely proud of our success so far. For example, this year’s 40 Days 40 FinTechs campaign generated visibility estimated at roughly $9.1 million. We are confident that our work will be sustainable given our holistic, inclusive, multi-stakeholder and low-income user-focused strategy. For instance, this year, women participation was three times more than season one. Women-led FinTechs have created products in sectors such as agriculture, informal trade, merchants, healthcare, loans and savings.
We also work with relevant stakeholders to ensure that DFSPs and their customers have a governance structure to coordinate FinTech sector policy and regulatory activities. For example, new enabling regulation has created advantages, such as separation of telecom businesses from mobile money operations. Evidence shows increased consumer trust because financial and banking operations are licensed and supervised by relevant financial regulatory authorities. Yet, more work is required to address regulatory issues that still affect FinTechs, such as speed and cost of licensing.
In addition, despite their enormous financial inclusion potential, small FinTechs lack the capacity to build interoperable solutions. Other areas of focus include bettering the lives of the underserved groups, especially women. Moreover, the rising frequency of hacks, exploits and scams against financial solutions has increased the urgency of addressing cyber threats and vulnerabilities.
We are delighted to present to you six Thematic discussions and 47 innovative technical solutions that use financial technology to transform lives across Africa.
MTN Uganda and MTN MoMo were the biggest winners at the 2022 Digital Impact Awards Africa, with the two sister companies bagging the biggest accolade of the night; the Digital Brand of the Year – Diamond Accolade. Centenary Bank came second and took home the Gold Prize.
MTN Uganda and MTN MoMo’s overall victory ended the four years long uninterrupted banks’ dominance for this category. In 2020 and 2021, Standard Chartered Bank won Digital Brand of the year while in 2019, Stanbic Bank won Digital Brand of the Year. In 2018, it was won by Centenary Bank.
While handing over the awards to the winners, Hon. Eng. David Karubanga, the Patron of HiPipo, Member of Parliament Kigorobya County and Chairperson Committee of Physical Infrastructure at the Uganda Parliament thanked all companies that are spearheading Uganda’s digital and financial inclusion journey.
“I am happy to see the progress that the country is making on matters of digital and financial inclusion. The efforts of the government and the private sector are all contributing to this success. The Digital Impact Awards Africa continue to play a key awareness and appreciation role,” Hon Karubanga said, adding;
“I thank HiPipo and its partners for being consistent. Even in a bigger way, I congratulate all the winners and encourage them to continue innovating for the betterment of our people.”
Now in the ninth consecutive edition, the Digital Impact Awards Africa is a platform that promotes Digital Inclusion, Financial Inclusion and Cyber Security. The Awards recognize and celebrate stakeholders that are spearheading the use of digital mediums to serve communities.
The Digital Impact Awards Africa celebrate digital excellence across the continent; big or small, local or international.
The 2022 edition was part of the broader Digital and Financial Inclusion summit held at Kampala Serena Hotel on Friday 18th November.
The summit brought together C-Level executives and stakeholders that are spearheading the scaling, adoption and usage of digital and financial services across Africa. It explored strategic trends and technologies that are shaping the future of Digital, ICTs and Business. Special attention is paid to the safety of customers’ funds and security of platforms in the Digital Financial Services ecosystem.
The summit discussed Uganda’s Digital and Financial Inclusion Journey, the disruptive impact of COVID-19 on the business ecosystem and what players are doing to recover, and Financial Inclusion for the people at the bottom of the pyramid. The summit had a special panel-themed Women on the Wheels – Financial Inclusion for Women Boda Boda riders.
Both the Digital and Financial Inclusion Summit and the Digital Impact Awards Africa were presented by HiPipo in partnership with Level One Project, Mojaloop, PortX (formerly ModusBox), and Crosslake Technologies and supported by the Gates Foundation.
2022 Digital Impact Awards Africa Winners’ List.
Financial Inclusion Excellence.
Letshego Digital Mall – Gold
MTN MoMo Advance – Diamond.
Digital Banking Excellence.
Stanbic Bank – Gold.
Standard Chartered Bank – Diamond
Banking Innovation Excellence.
Craft Silicon | Mobile Banking Solution – ELMA – Gold
CenteMobile Loans| Centenary Bank – Diamond
Community/MFI Banking Innovation Excellence.
Pride Microfinance Limited – Gold
Centenary Bank – Diamond
FinTech Innovation Excellence.
Safecar by SafeBoda – Gold.
Kawu Smart Card by Kawu Uganda – Diamond
Financial Services Digital Excellence.
Comviva and Airtel Mobile Commerce Uganda Limited (AMCUL) – Silver
MTN MoMo – Gold.
Standard Chartered Bank – Diamond
Consumer Goods Digital Excellence.
Jude Color Solutions – Gold.
Jumia Uganda – Diamond
Utilities and Government Services Digital Excellence.
NSSF – Gold.
NWSC – Diamond
Technology Services Digital Excellence.
Airtel Uganda & Airtel Mobile Commerce – Gold.
MTN Uganda & MTN MoMo – Diamond
Digital Campaign Excellence.
NSSF Hi-Innovator – Gold.
Stanbic National Schools Championship – Diamond
Digital Brand of the Year.
Centenary Bank – Gold
MTN Uganda & MTN MoMo – Diamond.
Panel Discussions at the 2022 Digital and Financial Inclusion Summit.
Financial Inclusion for Women on Wheels; Women Boda Boda Riders.
The Panelists were:
Nyadoi Zurah.
Babra Brizila Asimo.
Atim Albright.
Jenifer Kia.
Angwech Dillish.
Instant and Inclusive Payment Systems (IIPS): Why are Instant and Inclusive Payment Systems (IIPS) important? How do we build National Instant and Inclusive Payments Systems?
The Panelists were:
Mercy Nekesa – Founder and CEO, Sundetails by Raining Vegetables.
Moses Rutahigwa – Head, Consumer, Private and Business Banking, Standard Chartered Bank Uganda.
Edgar Mugume – Head of Business Development, Craft Silicon
Paul Ekudu – Executive Director, Pegasus Technologies.
Winning from the Boardroom; What are C-Level Executives and Business Leaders doing to ensure that Digital and Financial Inclusion is achieved. What are they doing to bring onboard the least included groups particularly; Women, Youth, PWDs and Informal Traders?
The Panelists were:
Irene Kaggwa Sewankambo – Ag. Executive Director UCC.
Damali Ssali – Chief Programmes and Projects Officer PSFU.
Anna Nambooze – Country Director for Uganda and South Sudan, TradeMark East Africa.
Lydia Nakamya – Head, Digital Banking and Partnerships, Standard Chartered Bank.
FINANCIAL SYSTEMS FOR THE POOR: An African continent where poor people, people at the bottom of the pyramid can capture opportunities and build resilience through financial services. The Ugandan point of view!
The panelists were:
Nelson Kituuka – Managing Director, Card Pesa.
Vincent Tumwijukye – Chief Executive Officer, FutureLink Technologies.
Japhet Aritho – Managing Director, Airtel Mobile Commerce Uganda Limited.
Beatrice Mawemuko – Head Strategic Partnership, MTN Mobile Money.
Andrew Ssemaganda- General Manager Strategy, Centenary Bank.
