Renew Capital Angels Invests in Akellobanker Platform to Drive Financial Inclusion and Agricultural Growth
KAMPALA, Uganda, October 14, 2022–(BUSINESS WIRE)–The Ugandan banking sector comprises 25 commercial banks, four deposit-taking microfinance institutions (MFIs), three credit institutions and over 300 non-depository microfinance institutions (MFIs). However, and according to the 2018 Finscope survey, published by the Financial Sector Deepening Uganda think tank, it is estimated that the bulk (89%) of the adult population is still unbanked, and does not have conventional accounts with from a formal banking institution. Additionally, the economic data collection web application Trading Economics estimates that a majority of 74.45% of Uganda’s 45.7 million people live in rural areas.
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Akellobanker (Graphic: Business Wire)
Lack of access to banking services and credit prevents these populations from accessing the basic products and resources needed to build successful businesses. However, small farmers and other entrepreneurs in rural areas rural and peri-urban of Uganda find these days that it is not the cart, but rather the smartphone, that must be put before the horse. Quest Digital Finance, a Ugandan technology company, is working to change this reality, bringing the power of banking and service delivery to farmers and entrepreneurs using its digital platforms.
The platform enables Savings and Credit Cooperatives (SACCOs) and microfinance institutions to achieve full digital transformation and, consequently, improve reporting and accountability, which subsequently reduces the risks of these entities , and thus enable them to access loans from financial institutions. Akellobanker eventually hopes to provide bundled products and services to farmers, entrepreneurs and other value chain entities on credit. Renew Capital, an impact investment firm that supports small and medium-sized enterprises in East Africa through its global network of angel investors, Renew Capital Angels, is now continuing this effort by providing funds including Akellobanker needs to support over 100 cooperatives serving over 100,000 farmers and micro, small and medium enterprises (MSMEs) in Uganda. As such, Akellobanker will seek to focus on its digitization agenda, aiming to bring more than 350,000 farmers and entrepreneurs into the digital economy and use data to deliver desired products and services on credit.
Commenting on this effort, Jean Onyait, Team Leader of Akellobanker said, “If you look at the world of finance in the past decade, commercial banks had a monopoly on financial inclusion. But five years ago, fintechs – small financial technology companies – emerged and showed they could go where traditional banks couldn’t. This breaches the monopoly of banks and creates healthy competition, which goes a long way to lowering prices and making services much more affordable for local communities. »
For his part, JC Oelofse, Head of Shared Growth Services at Renew Capital underlined: “The market potential and long-term commercial viability of Akellobanker attracted Renew Capital, especially with the growing need to access funding. The development of a digital platform that offers a reliable aggregation of financial data generated by the unbanked in order to facilitate access to credit constitutes an essential lever for growth in the informal sector. These credits provided by financial institutions facilitate the sale of inputs to increase the informal economy and cause a well-defined impact. »
About Renew Capital
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high growth potential. Based in Ethiopia, Rwanda and Uganda, Renew Capital manages investments made on behalf of Renew Capital Angels, a global network of angel investors, foundations and wealth managers who seek financial returns and lasting social impact. Since the network’s inception in 2012, Angels has actively invested in the region, raising millions of dollars in the African middle market.
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