What problem are you trying to solve?
Rural communities in developing countries and refugees are excluded from access to formal financial services. Despite having a level of financial capacity, they have to resort to pulling their savings together in boxes and give loans to their fellow group members. Savings are kept in boxes under their leader’s groups bed or in the roofs of their house which is not safe (from fire or theft for instance). Access to capital is furthermore limited to only the collective capacity of the group which limits investment opportunities that in better livelihoods. This exclusion is a result of stringent traditional banking conditions, lack of collateral, long distances to banking facilities, financial illiteracy, low productivity leading to low savings, high costs of account operations, and high-interest rates.
What is your solution to this problem?
Akaboxi targets customers who are already part of a Village Savings and Loan Association (VSLA) or desire to form one. If the VSLA is a new endeavour for them, we begin by providing financial literacy training on the benefits of forming saving groups and banking. Akaboxi then introduces them to a digitized bookkeeping system by providing a smart POS Terminal with the Akaboxitech application to manage and monitor the saving group. This represents a critical first step of improving the credibility.transparency and tracking of all transactions. This serves as a strong foundation for the group to no longer keep their savings in a physical cash box but rather an open group or individual accounts in a financial institution and become eligible to access the extra financial services like credit, interest on their savings, security, and to make payments. The communities are also trained in marketable skills, and in smart agriculture to support investment in durably improved livelihoods solutions.
What is your latest update on your innovation?
We have already been working with 21 VSLA groups, hence a total of about 525 users in various regions, showing that our concept has been successful in several geographic areas and circumstances. We have partnered with Save the Children an International non-governmental organization and the Response Innovation Lab to be able to digitize VSLA groups in Kiryandongo refugee settlement in Uganda. This partnership is a humanitarian innovation pilot to test how our solution may be relevant for development as well as recovery contexts for people who have been affected by crises.
Our app is already fully functional and allows groups to replace tradition hand-written tracking of all transactions. We are currently reviewing additional functionalities such as the off-line feature to address contextual challenges of connectivity access, our data-management protocols to adhere to GDPR standards and developing our dashboard function to accommodate the needs of a rising number of clients.