What is Akaboxi ?
A akaboxi is Bantu speaking word referring to a box. A box is a saving group of smallholder farmers in communities that do savings and borrowing together. They gather/ meet weekly and each saves on average 1.5 USD.
Therefore a box or group saves 1.6 (weekly savings)*30 the number of people in each group (average number of people in a box)*4 (4 times a week) = 192 USD per month. We are handling a sub-county with 440 groups/ boxes (13,200 smallholder farmers)=440*30*1.6*4*12=1,013,760USD THIS IS UNBANKED MONEY THAT IS KEPT IN BOXES IN THEIR LEADERS HOMES by end of the year before it is shared amongst themselves.
How was it built?
Akaboxi is an android mobile application. The application is designed so that the end-user individual uses an NFC (near field communication) cards as an authentication method to interact with the hardware device. The Individual NFC cards can be used to carry out a transaction i.e. deposit money, pay a debt, withdraw money, and borrow money. When a transaction is completed, an SMS notification (this is for transparency purposes and accountability for every transaction done by the group of which every group member is accountable) from the Akaboxi system is sent to the respective individual’s phone number.
The Akaboxi device captures these transaction process details and synchronizes with the server. With these details, we can be able to carry out credit scoring of each individual in the saving group. The physical money is then deposited on the saving groups’ bank account through a mobile money agent. Akaboxi system is connected to mobile money through an API to view the electronic transactions. The financial institution can provide credit to creditworthy individuals through our system.
The system uses Mobile Money API to be able to interact with the Mobile system. This integration is necessary as it makes banking of the money collected possible. The mobile money system is also integrated with partner Bank or financial institution where these saving boxes have registered accounts. The partner Bank provides credit loans on top of the savings based on the consistent credit scoring received from the Akaboxi technology.
How is it used ?
During the weekly meetings, the group leaders who are democratically elected by group members use the handheld devices for depositing individual savings. The individuals have cards that use a near-field technology whose features are embedded in the system. All 30 group members in a box posses a card for depositing. when all the deposits are done, the leader asks for possible borrowings to individual group members, one to five people normally borrow money for different purposes majorly agricultural inputs, business, school fees, medical etc. they are also served using their cards that are swiped on the device to capture the features for individuals.
The third transaction that the system does is to produce weekly reports, monthly and annual reports.Every time a transaction is done two receipts are issued, one for the group file and another for the individuals in the group.The system balances with the cash money that is deposited to group account in nearby formal financial institutions using mobile money. as soon as money is deposited on the account, every group member of the box receives an alert message and the meeting closed or adjourned for the following week.
What are the benefits of being part of Akaboxi
The system has the following benefits
- It’s simple and easy to use. Every member of the group can use the device
- The battery life for the device lasts more than two months before being recharged, it uses both solar and electricity to charge, and can be used in rural areas where electricity does not exist.
- The system saves time. Meetings that would take 3 hours now take less than 15 minutes giving farmers enough time to do other productive work
- Good record keeping
- Credit scoring
- It is reliable and secure financial system
- Peoples’ money is secure from thieves, fire, water and from related causes of gender violence
Through partnerships, we provide cheap and affordable agricultural inputs, markets for farmers produce, training in finance and smart agriculture and hope to partner with insurance companies for low insurance agro and health insurance
What is the background of Akaboxi and why did we decide to start this business in particular ?
One of the co-founders Sarah Atuhaire is a former banker with 13 years experience with one of the leading microfinance banks in Uganda (centenary bank). She started saving with village saving groups way back in 2012 while still in the bank and she has been growing together with them. During her tenure, she realized that there was a big untapped gap in rural areas.
These are communities where individuals cannot afford to open a bank account due to the high costs involved and the distances to these financial institutions. That’s why they started to save the little they had and combined efforts to get some small loans within the groups to sustain their families and small business. The first box started from her home and has given birth to as many as 440 boxes in just one sub-county. The market has since grown to the district, the country and a lot untapped of the same kind experiencing the similar problems in E.Africa and the rest of developing countries.
In 2016, Sarah Atuhaire shared her experience with Joshua Businge the other co-founder and they decided to digitalize the whole process, this started with a needs assessment to rightfully find out the problem the community was experiencing in saving together of which our main findings were
- security for the money that used to be kept under their leader’s houses
- filling the financial gap to increase productivity and increase savings
- lack of awareness (financial, markets, how to do smart agriculture, gender issues)
That is when AKABOXI, the digital financial inclusion system started.