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Wednesday, 16 July 2014

Ensibuuko: Bridging tech and agri-finance

By Simon Wandila and Bob Aston


Information and Communication Technology (ICT) plays an important role in enhancing the impact and performance of agricultural production and poverty alleviation by increasing productivity through new credit and financial services.
  
Ensibuuko, a mobile and web application that helps farmers in accessing financial services is making a huge impact in Uganda as it has enabled saving and credit associations (and other financing organisations) to handle savings and make loans to smallholder farmers.

Ensibuuko was conceived over a cup of coffee between two friends in 2010. Mr. Gerald Otim and Mr. Opio Obwangamoi David shared a similar background as they were both raised in peasant farming communities.

Mr. Otim had attempted to establish a microfinance organisation for farmers, but with a lot of frustration. It is from these frustrations that he and Mr David were moved to establish Ensibuuko.

The solution is targeting farmer’s welfare through Savings and Credit Cooperative Organisations (SACCOs). It allows farmers to register and apply for loans using SMS, save, receive and repay loans using mobile money.

The result is simpler, safer and flexible as it allows more control over one’s savings and credit for farmers, lowers cost and gives greater transparency for savings and credit groups.

Starting Ensibuuko was not easy for the two friends as accessing capital to kick start their innovation proved challenging. Their turning point came in August 2011, when they met an agronomist at the Ministry of Agriculture-Buganda Kingdom who helped them to kick start their innovation.


In 2013, they were named the overall winner of ICT4Ag Hackathon in Kigali, Rwanda. Fast forward to July 14, 2014 and the two are slated to be part of the Plug and Play Day and as highly anticipated speakers during Fin4Ag Conference: revolutionising finance for agri-value chains at the Kenya School of Monetary Studies in Nairobi from 14 – 18 July 2014.

Ensibuuko has leveraged mobile and web technologies to help smallholder farmers access agriculture information and markets so as to attract young people into farming. It has also been addressing lack of finance among smallholder farmers as their productivity has been stifled due to a lack of financial access. Currently it is estimated that smallholder farmers make up more or less 80% of Uganda’s population.

Innovation provides some real opportunities for transforming agriculture and putting farmers in the driving seat. Mobile and web technologies are increasingly becoming important for the adaptation of new opportunities in value chain financing. Ensibuuko has managed to revolutionize this as it has managed to expand the coverage of financial services to smallholder farmers in 35 sub-counties in Uganda.
 Ensibuuko recognises the fact that most smallholder farmers are unbanked and deemed lacking of creditworthiness. The innovative system also generates a history of how individual farmers have been saving with their SACCO. This helps the SACCO to know how active the members have been while the farmer can also track his transactions.

This application also enables SACCOs to provide financial services to, hard to reach areas, improve accountability and transparency in the handling of financial transactions by SACCOs and makes it possible for Micro Finance Institutions (MFI) to provide group loans. Through a partnership with Kiva, they have managed to raise $20,000 to provide affordable mobile loans to farmers.

Other value added services Ensibuuko provides include, market information and access to the market for smallholder farmers. Because of the impact the company is making through its service, they have been approached by various institutions such as MFIs for possible partnership and replication of their service.

Currently, Ensibuuko has 1,000 farmers who have registered in the system. Most farmers appreciate the fact that it is convenient as it reduces travelling cost to SACCO’s as all transactions can be done using mobile phones!
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