80% of Ugandans aren’t served by banks or other formal financial services providers. At the same time, Mobile Money (MM) has emerged as a way to enable people in the most remote areas to transfer money using their mobile phone. The mobile money infrastructure could be used for other products – like saving accounts, or loans – but so far, it’s only been used for remittances and bill payments. What other products – savings, loans, insurance – could the mobile money channel deliver to the poor?
Today, few banks cater to poor or rural consumers in Uganda – it’s expensive to build branches in rural areas and it’s difficult to make money serving customers who only have a few dollars a month to save or spend. As a result, only 1 in 5 Ugandans are banked, and 1 in 2 lack access to any financial services at all.
As a result, most use informal tools, which aren’t always sufficient in addressing their needs:
- Managing shocks: For many Ugandans, unexpected shocks – an illness for a family member, a drought that wipes out a farmer’s livelihood – can send a poor family into debt
- Building assets: With few formal investing options, many poor users invest in their businesses, which often for farmers means livestock – but a bad business cycle or an disease afflicting their cattle or pigs could wipe out their entire savings
- Financial planning: The poor do plan – they know expenses are coming, and they know what their current options are to address those expenses – but they don’t have any formal tools to help them manage cash coming in or going out
Most adults either own a mobile phone or have access to one, which has contributed to growth of mobile money. Today, there are 2.5 million registered users in Uganda, and it’s increasing by the day as people take advantage of the faster, more secure way to send money. However, the infrastructure that allows money to flow from a city to the village could be used for much more than simple payments.
We want to see what else mobile money can offer to help poor Ugandans manage their money. We need to think big – we want solutions that can scale across millions of customers to support an offer that is affordable to the poor and sustainable for our partners. We want something new, something different, something that changes the relationship between people and their money.
AppLab has partnered with CGAP to develop new products to offer over the mobile money channel. Help us find ways to make sure mobile financial services reach the poorest users in Uganda.
CGAP The Consultative Group to Assist the Poor (CGAP) is an independent policy and research center dedicated to advancing financial access for the world's poor. It is supported by more than 30 development agencies and private foundations that share a common mission to alleviate poverty. Housed at the World Bank, CGAP provides market intelligence, promotes standards, develops innovative solutions and offers advisory services to governments, microfinance providers, donors and investors. The Technology Program at CGAP is co-funded by the Bill & Melinda Gates Foundation, CGAP and the UK Department for International Development (DFID). For more information, visit www.cgap.org/technology.Find out more
April 20, 2012> View full timeline
Deadline for submission
Posted on January 20, 2012
During focus groups, we saw that people found the concept of sending money to themselves - me2me - very intuitive. They "got" it!
Posted on February 28, 2012
True or false: Farmers spend up to 80% of cash earnings on school fees. (Yup, it's true, according to some folks we talked with in Mbale!)
Posted on March 08, 2012
Our first challenge has launched! Looking forward to seeing the great ideas that come through.
Posted on February 22, 2012
We talked with another person today who is what Ali calls an “agent on the fringe.” In villages that lack MM agents, some individuals conduct transactions on behalf of others through their own personal MM account. Today Yiga Joseph, a bike repairman, said he conducts roughly 10 withdrawals and...