Towards the end of last month, a team from Seedstars World (SSW) were in Uganda and listened to pitches from 14 startups – teams of entrepreneurs and developers – with ideas that will address some of Africa’s current problems while making money.
Seedstars World is one of the most exclusive startup competition for emerging markets and fast-growing startup scenes and is based in Geneva, Switzerland.
At the end of the afternoon in a fully parked room at Outbox Hub, Remit was announced the winner.
It wasn’t a surprise.
Remit.ug is a remittance transfer service built by Redcore Interactive that offers real-time debit/credit card to mobile-money transfers from all over the world to registered mobile-money users in Uganda.
As of last June, nearly 250 mobile money providers in 89 countries around the world counted some 60 million active users. Nine countries in Africa have more mobile money accounts than bank accounts.
Statistics, compiled by Quartz, point to the collective desire of a huge portion of the world’s population to move beyond traditional payment methods and conduct real-world transactions with a mobile device.
At the end of 2013, a Bank of Uganda survey estimated that the number mobile money users in the country had to grown about 5.1 million, significantly higher than the 3.4 million people that held bank accounts at the time.
In terms of remittances alone, Remit.ug estimates that Africans in the Diaspora send up to $60 billion annually to the continent. At an average cost per transaction of 11.89%, Africans are spending more than $7 billion in fees. And that’s core of their business model. They believe they can build the fastest, cheapest, and safest way for Uganda’s diaspora to send money home.
They’ve identified a gap that needs to be and can be filled.
The runner up in Uganda was Ensibuuko, a tool designed to enable Savings and Credit Cooperatvies (SACCOs) manage their savings and credit through mobile.
Ensibuuko has developed a system that integrates SMS and mobile services that work on a basic feature phone so that farmers in SACCOs can register their SACCOs and apply for a loan just by sending an SMS.
Notice we’re still talking about money and mobile phones.
“The farmers can also receive and repay their loan by transferring their mobile money savings without the need for Internet connectivity,” Ensibuuko says on their website.
Ensibuuko provides loans to farmers for agriculture inputs, including fertilizer and seeds, and solar products. Each individual farmer’s repayment schedule is structured to match the cash flows of his or her principal crops. Ensibuuko selects its borrowers from experienced farmers with a high level of integrity that have demonstrated leadership potential in their community.
All Ensibuuko borrowers make a commitment to apply proper farming practices in their farms and agree to mentor and transfer skills to other farmers in their community. In this way, the initiative is building a cohort of model farmers committed to mentor local farmers in their community.
“Through the use of their mobile platform, Ensibuuko is also providing farmers with high quality inputs and market information they would otherwise not have access to. With a current reach of 35 districts, Ensibuuko intends to directly extent its services to 25,000 rural farmers in the next 5 years,” said co-founder Gerald Otim.
“Because 90% of Ensibuuko’s borrowers are from off-grid communities, loans will also be used to help farmers acquire affordable solar systems for lighting and charging mobile phones so that they stay connected and productive,” he added.
Unfortunately, only one winner from Uganda will travel for the global finals. But coming second should encourage the Ensibuuko team to keep up their good work.
That the top two winning initiatives were in the field of mobile phones and money shows us a glimpse into Africa’s future. We must embrace it.
Seedstars World will select 30 finalists from the regional events that will be invited to Switzerland to participate in a 4-day bootcamp and the grand finale where they will compete in front of an international jury and European investors. One winner will win up to USD 500’000 in equity investment.
The winning product should be up and running in a maximum of 2 years, able to run as a global project and potentially scalable at an international level.
Albert Mucunguzi is Seedstars World 2014 official blogger for Uganda.