Ensibuuko — Saving and credit cooperative societies go digital


Mobile banking platform accelerates financial access


“It became evident that limited access to finance inhibited the capacity of smallholder farmers to grow more produce and keep more animals.”

David and his co-founder, Gerald Otim, share a childhood experience. They were both born and raised in rural farming communities. David recounts how his mother, a maizefarmer who owned an acre of land could not afford to farm her entire plot. “As a young boy, I experienced firsthand the exploitation of middlemen, taking the biggest percentage of farm sales, “David explains. In an effort to increase his mother’s income, and the incomes of other farmers like her in his community, David began by helping rural farmers access the produce market. Despite his initial success, David realised that his efforts were limited to subsistence farmers who grow enough for their own consumption, but have little left for commercial farming.

“It became evident that limited access to finance inhibited the capacity of smallholder farmers to grow more produce and keep more animals,” David shares. The farmers were not making sufficient income from markets to expand their farms, and the formal financial institutions available would offer no assistance; they considered farmers as risky and unbankable people. “They are in a dilemma of looking for finance and no one can help,” he said. “So I asked myself, with the farmers, what could be the best way to enable them to access finances in a way that they can afford?”


“We build these mobile tools to promote financial inclusion to rural farmers.”

The answer, David soon realised, lays in existing institutions: the Saving and Credit Cooperative Organisations (SACCOs). Rural Uganda has about 5,000 SACCOs that organise almost 20 million rural Ugandans into saving societies that encourage savings and provide loans. However, many of these SACCOs are embroiled in corruption and embezzlement, which is only exacerbated by the fact that much of their accounting is recorded manually. So David asked himself, “How could we enable these locally-based institutions, to deliver financial services to their members efficiently?” This gave birth to the Ensibuuko product, a mobile, co-banking system, customised to SACCOs, that enables unbanked, rural farmers to access finances through SMS and USB.

“The product — called MoBis, the Mobile Banking and Information Software — is a winwin for both SACCOs and farmers,” David explains. For the farmer, MoBis provides remote access to finances, using the USSD/ SMS (Unstructured Supplementary Service Data) on their basic mobile phones. By using mobile money through MoBis, farmers can: (1) track their savings; (2) request a loan; (3) repay that loan; (4) deposit savings; (5) view a mini-statement; and (6) withdraw their savings. For the SACCOs, using the MoBis platform not only involves digitising and systematising their operations, but also trains their employees in the software, migrates all of their data onto a single platform, and allows them to connect to the internet, so non-local managers or government officials can monitor the SACCOs remotely. Ensibuuko also works with SACCOsto put in place anti-corruption systems, giving managers and tellers different degrees of access to information.


40,000 rural Ugandan farmers currently use the platform.

The effect of Ensibuuko’s system has been catalytic. For the 40,000 rural Ugandan farmers who are currently using the platform, MoBis has allowed them to increase their income, grow their farms and, for some, even access loans from the very formal institutions who had previously denied them. “Let me narrow it down to my mother,” David says. Her farm that was once two acres is now 10 acres. “She’s been able to raise more money and is a purely commercial farmer… She has been able to access more loans. She’s now an active SACCO member and recently got a loan from a bank.”

In addition to the successful impact on individual farmers, Ensibuuko has sparked a new trend in rural Ugandans’ culture of saving. While SACCOs are structured to promote cooperative saving, Ensibuuko adds technology to this system in a way that allows farmers to trust the organisations that were previously embezzling their money. By using mobile money and a data-oriented system, Ensibuuko has removed subjectivity from the system and replaced it with transparency. As David explains, “Before there were cases of fraud… The farmer worked day and night to save his money, then, the manager took all the money and disappeared. With Ensibuuko, we have transferred the… accountability… and now see a lot of farmers joining SACCOs and trusting them. And that’s the win-win solution, beneficial for both SACCOs and farmers. That kind of linkage… transfers the power tothe individual.” In addition, Ensibuuko has placed particular emphasis on encouraging men to save. “In most communities,” David describes, “women take on the responsibility to take care of the children and the men. Through Ensibuuko, we invite the man and the woman… the entire family, to know about saving and how to use their resources efficiently.”


How is the venture sustained?

To ensure financial sustainability, Ensibuuko works with SACCOs and farmers to pay for the services they access. This may seem counter-intuitive — to charge the very people whose income you are aiming to increase. But, as David explains it, Ensibuuko was really a community-inspired and community-funded effort from the beginning. “We went to them and said, “This is your solution, and we want you to own it,’” he remembers saying. “But I stay 30 km from here, and if I am to bring you this service, I need to sit in a taxi… And trust me, I don’t have the money. We need tooperate — we need to get APIs, we need to learn the system on the server… We want you to be part of this process, to contribute to the sustainability of this.” And the first farmers paid US$10 for membership for a year.”

Three years later, Ensibuuko still operates under a community-funded model. Now, the venture sells its solution to SACCOs directly, charging them per employee who will be accessing the service from their computer or laptop; this amounts to something between US$500-$2000. Ensibuuko also charges the farmers for transactions, US$0.02/transaction. “They don’t pay for acquiring the solution, but we charge them for a transaction,” David explains. “But we don’t charge on savings… We only charge you when you’re withdrawing or transferring your savings to another individual.”

Ensibuuko also works very closely with the Ugandan government, Mercycorps, Microsoft, and telecoms, like MTN and Airtel, to ensure that they are providing the greatest benefit to their farmer users. The Ugandan government actively links Ensibuuko to all SACCOs, including by subsidising training costs for SACCO members to learn the MoBis platform. Mercy Corps has been an active collaborator in rolling out Ensibuuko’s solution, by enabling them to leverage their community presence, relationships and resources to run a successful pilot. Microsoft has also been won over by the power of the platform, providing laptops, computers, and even phones to the SACCOs at subsidised, low-interest costs. Large telecom corporations, MTN and Airtel, have also committed to creating a network of two million mobile money agents to serve SACCOs and SACCO members on platforms like MoBis.


“I think technology can be used to excite young people to join agriculture, promote economic development, and drive sustainable livelihoods for their communities.”

Gerald Otim, Ensibuuko’s co-founder and chief operations officer shares his dreams for their venture: “By December 2015, we hope to be working with 200,000 farmers on our platform.” However, it is not going to be a simple journey; unfortunately, even though agriculture employs 80% of the population, it is sidelined in the national planning budget. “When regional governments do not consider agriculture as a viable business, this scares young people away from the industry,” Gerald shares. “I think technology can be used to excite young people to join agriculture, promote economic development, and drive sustainable livelihoods for their communities.”

For David, ICT is the answer to many of the sector’s issues — ICT can help farmers access farming inputs, connect to markets, and access financial services, all via mobile phone. “75% of the Ugandan population own mobile phones,” he says. “That’s 28 million rural farmers. How can we tap into that infrastructure? How can we marry culture and ICT?”


What have you learned along this journey?

“A lot of people develop solutions from their own offices, and then dump them in the community,” David states. “But these solutions don’t work, because they are not customised to the needs of the rural poor. Our strategy was to listen to the farmers, ask them what they would like the solution to look like throughout the process of development, and what theywould like to access/benefit from the solution.” This community-inspired, community-funded, community-led innovation is one of Ensibuuko’s trademarks. It’s not just a solution for a community, it is a solution that has been created, developed, and resourced by the communities that it aims to serve.

Culled from the report: Innovate for Agriculture, Young ICT Entrpreneurs Overcoming Challenges and Transforming Agriculture, CTA(2016)

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