The COVID-19 pandemic has veered many organizations and businesses in directions they never imagined, forcing many to adopt new digital practices that they have previously ignored or just kept postponing. Sadly, as many move online to continue their day-to-day activities, access critical health care, education and financial services, the traditionally marginalized communities remain at risk of being left behind. The unprecedented crisis makes our work of building an inclusive digital economy that leaves no one behind more urgent than ever before. During the year 2020— both before and after the pandemic began—we worked with our partners to innovate and scale digital solutions that address systemic constraints in the social and economic sectors. Using a market systems development approach, we worked to create a “crowding-in” effect that will incentivize digital finance and digital innovation enablers to enter markets they may otherwise overlook, while addressing market constraints. We are happy to share some of the highlights of our work in 2020, as part of our “leaving no one behind in the digital era” strategy.

2020 in Numbers

Bridging the Access Gap through the DCE Model

To empower rural communities to have better access and usage of digital platforms, UNCDF is using the Digital Community Entrepreneur (DCE) model for distribution of digital products and services at the last mile. DCEs are individuals who promote the adoption and usage of digital services and products, and skills needed to use them; on a door-to-door basis in the communities where they live and work. They are entrepreneurs and earn commissions from the companies that own the products and service-offerings that they promote. The DCE model is designed in such a way that at least 50 percent of DCEs are women. Read more about the DCE model.

Increasing Digital and Financial Literacy among Refugee Communities in Uganda

In partnership with World Food Programme and PHB Development, UNCDF worked to increase the digital and financial capability of refugees and refugee hosting communities to ensure that they are better equipped to make sound financial decisions and effectively interact with digital financial services providers to achieve their financial goals. Using the human centered design and in consultation with the refugees and humanitarian organizations working within refugee communities, we developed a financial literacy training toolkit customized to meet the needs and realities of refugees and refugee hosting communities in Uganda. The toolkit can be accessed here.

Enabling Policy and Regulation

UNCDF works with government ministries, departments and agencies to drive development of policies that support the growth of an inclusive digital economy. At the beginning of 2020, we held a knowledge and experience sharing workshop involving key sector stakeholders in a bid to better understand the policies that are pertinent to the digital economy in Uganda. The workshop was premised on gathering policy makers such as the National Information Technology Authority of Uganda, Financial Intelligence Authority, Office of the Prime Minister, regulators, thought leaders, enablers, and development partners under one roof to better discuss the policy bottlenecks as well as opportunities that affect the digital economy and devise a way forward. Throughout the year, we continued to engage with the various stakeholders to foster an environment that enables a digital economy to thrive.

Measuring the Key Components of an Inclusive Digital Economy

We launched and piloted the Inclusive Digital Economies Scorecard (IDES) in Uganda, in consultation with government ministries, departments and agencies (MDAs) including the Ministry of ICT & National Guidance, Uganda Communications Commission, Uganda Bureau of Statistics and National Planning Authority among others. The IDES is a policy tool that supports governments in setting priorities that drive digital transformation while reducing the digital divide. The objective of IDES is to provide a tool for governments to easily measure and track the level of development of an inclusive digital economy at the country level. The inclusiveness of the digital economy is measured through a qualitative assessment of the efforts made by the public and private sectors to include specific population segments in the expansion of the digital economy. These segments include women, youth, refugees, migrants, micro-, small- and medium-sized enterprises, and rural inhabitants. More information about the IDES can be found here.

NDP III Digital Transformation programme:

UNCDF worked with the National Planning Authority (NPA) and the Ministry of ICT & National Guidance to mainstream digitization into the third National Development Plan (NDP III). The NDP stipulates Uganda’s medium term strategic direction, development priorities and implementation strategies. As a result of this work, the NDP III focuses on developing use cases to drive ICT-based decision making by MDAs and better user experience with key strategic government programs. NDP III also has a greater focus on the use of ICT to increase household incomes and improve the quality of life of Ugandans.

We kicked off support to the Ministry of ICT & National Guidance to craft a policy on innovation.

Inclusive Innovation

Throughout the year, we worked to support local entrepreneurs and MSMEs to build inclusive services for the local digital economy, making sure that the value offered by digital services improves the livelihoods of the most vulnerable.

UNCDF, SafeBoda Partnership a Springboard for e-Commerce for MSMEs

Market vendors are now able to sell their goods online thanks to a partnership between UNCDF and Safeboda, funded by SIDA. The partnership which was launched amid a COVID-19 lockdown connects market vendors to households that need a range of supplies by using the preexisting reliable SafeBoda motorcycle ride hailing service. The following was achieved from when the platform was launched in April to September 2020.

• 520 market vendors were on-boarded to a digital sales channel via SafeBoda mobile application.
• 57,285 people ordered food stuff and household essentials remotely and had them safely delivered to their doorstep.
• While many of the 18,685 SafeBoda riders were impacted through temporary ban on transportation of people, the project enabled 6,428 riders to gain income through deliveries of household orders made on the platform.
• Although the project initially intended to support market vendors and households meeting their food needs during lockdown, the mobile platform has grown into other valuable uses such as access to medicines, masks, sanitizers and others, with UNFPA also partnering with SafeBoda to repurpose the same platform to enable people access reproductive health products.
• Following the success of this project, Uganda has seen a growth in similar e-commerce platforms that have enabled businesses to stay afloat amidst the pandemic.

Read about how e-commerce platforms are enabling recovery from COVID-19 impacts here.

Home-grown Digital Solutions to Alleviate Challenges Faced by Smallholder Farmers in Rural Communities

In July 2020, UNCDF partnered with Ugandan technology companies to develop, scale and apply home-grown digital technologies to combat the systemic constraints in agriculture in rural communities. The solutions, which are initially being applied in Northern Uganda and Kiryandongo district, aim to unlock the systemic constraints in the agriculture sector with the ultimate goal of improving the productivity of smallholder farmers and consequently boosting the livelihoods of vulnerable families and communities.

The solutions are:

Digital traceability: Using their ‘My Koop’ digital platform, Hamwe East Africa is addressing the lack of transparency and inefficiency in the agriculture value chain by employing technology that provides forward and backward traceability of the entire value chain for both food and animals.

Digitalization of farmer groups: Nilecom together with Mezzanine and ICCO are using technology to automate activities of farmer groups. This digital information will improve access to inputs, financing, insurance, extension services and markets for these groups.

Farmers’ call center: The Kilimo farmers’ call center run by Cabral Tech Ltd provides customized agriculture advisory and extension services to the hardest-to-reach smallholder farmers using mobile technology.

Digital extension services: Working with Quest Digital Finance Limited (Akello Banker), UNCDF facilitates easy access to farm inputs, expert-extension services, agro - advisory services, tools and equipment for farmers while providing an option for smallholder farmers to pay, share or hire farming services or equipment on credit. Read more.

Using Digital Health Tools to Improve Healthcare Access in Rural Communities in Uganda

In September 2020, we launched two digital solutions aimed at improving access to healthcare in rural communities in Uganda. The Village Digital Health Reporting service developed in cooperation with BRAC Uganda and Medic Mobile will digitalize the reporting system used by community health care volunteers to improve access to primary health care and referral of patients from the communities to health facilities.The second solution, a digital inventory management platform for the medical supply chain, developed in cooperation with Medical Access Uganda Limited and Signalytic will provide end-to-end visibility of data on management of essential drugs and medical supplies thereby enabling the Ugandan supply chains to become more agile and reducing stockouts. Read more.

Improving the Education Sector through Digital Education Solutions:

Through a rigorous RFA process, UNCDF has identified partners to provide solutions to improve education services in rural communities in Uganda as highlighted below:

E-Recruitment solution for teachers and non-teaching staff in partnership with Cremotin to benefit the Education Service Commission of Uganda: The e-recruitment solution will ease the recruitment process that is mainly labor-intensive, and paper based, time consuming and very cumbersome.

E-learning solution targeting teachers: Working with Continuum Financial Group & eChaarya, UNCDF is developing an e-learning solution to train the over 58,000 teachers in Uganda.

ePayment solution for school fees and digital school management systems: In partnership with Service Cops, UNCDF is scaling up School Pay, a universal school fees and tuition collection web based and mobile (USSD and smart application) solution that provides safer and easier ways of enabling students pay school fees using digital payment channels, offers a flexible payment method and access to affordable school fees loans.

Leveraging Digital Technology to Enable Access to Finance for Smallholder Farmers

UNCDF partnered with the Uganda Development Bank Limited (UDBL) and Food and Agriculture Organization of the United Nations (FAO) to pilot the use of digital technology to enable access to finance for smallholder farmers. Through this project, UNCDF and partners are working to digitize transactions between the smallholder farmer and farmer organizations, and develop and roll-out a credit scoring solution customized for smallholder farmers in the regions of Acholi, Lango, West Nile and Kiryandongo.

Supporting the Startup Ecosystem to Drive Innovation in Uganda

In 2020, we renewed our commitment to Start Up Uganda, an association of key players in the Ugandan Startup Ecosystem that aims to consolidate and connect the activities of all startups in the country. By supporting the startup ecosystem, UNCDF aims to drive the growth of inclusive innovative business models and services that can be tested and deployed at scale in various sectors (Agriculture, Education, Health, Energy, Finance), thus contributing to the achievement of the sustainable development goals. During the year, Startup Uganda completed their five-year strategic plan and convened the fourth annual Kampala Innovation Week, the largest gathering of innovators in Uganda.

Investment in Clean Energy to Accelerate Access to Solar and Clean Cooking Solutions

The following companies received investments (grants and debt) in 2020;

EcoGroup Ltd, a woman-owned Ugandan company, manufactures clean cookstoves with the capacity to heavily reduce the expenses of charcoal by up to 80 percent. EcoGroup’s innovative fuel, volcanic rock, is providing a viable alternative in the clean cooking sector. EcoGroup provides a package solution to meet most of the energy needs of off grid domestic customers.

BM Energy Savings Equipment Ltd: A Ugandan cookstove manufacturer with 11 years’ experience, will establish regional distributors to improve the availability of improved clean cookstoves throughout Uganda. To accelerate distribution and sales growth, BM Energy needs to increase sales points; improve the quality of its stoves and support the sales process through an automated, easy to use customer relationship management and inventory tracking system. The tracking system is needed to access market data, sales progress and stove supplies. To achieve this, BM is developing its production and sales infrastructure to reach more households and reduce carbon emission. With increased sales agents, vendors with a strong sales track and regional distributors, the availability of clean cooking solutions will be more available throughout Uganda.

Prime Energy and Environment Savers (PEES) Ltd: Prime Energy designs, fabricates and distributes improved cookstoves. It seeks to increase its market share in cookstoves in the western region by building new distribution channels through agents (mainly women and youth) for a robust supply chain. An ICT tool be used for operational efficiency. Prime Energy will set up a “hub and spoke” distribution model of improved cookstoves mainly targeting domestic customers. Having a central store and sales point in each district to support the agents and mobile sales teams reduces operational costs and ensures that products are as close to the end user as possible. The model is supported by depots set up close to the agents; ICT tools to capture sales data in real-time; rewarding distributors according to performance; reducing stock-outs; and, increasing market share in target districts.

ANUEL Energy Uganda Limited imports and distributes high quality plug-and-play solar home systems. It has worked across the distribution value chain for solar PV throughout the country for several years. Anuel is proposing to strengthen their business operations and build a lean, efficient and high value sales business. Anuel will be enhancing its distribution coverage in a spider-web model with Anuel at the centre and the agents radiating outwards. By leveraging an agency model to improve the distribution infrastructure of its products, Anuel can reduce overhead costs and improve operating efficiency through a mobile and web-based Anuel application. The Anuel web-based app will provide the real-time available information to closely link stock management, business operations, orders, customer payments and agents sales and commissions (with greater access to commission information, Anuel hopes agents will be motivated). The model is being implemented to demonstrate operational efficiency for last-mile distribution of solar products.

BrightLife, a FINCA International social enterprise, plans to expand solar sales operations in the North of Uganda, a critically underserved region in the country. RECF funds will support the opening of two storefronts in Arua and Nebbi. BrightLife combines access to finance with access to affordable energy to unlock productivity and well-being for the poor. BrightLife is also committed to achieving scale, sustainability and social impact through triple bottom line returns. As the lowest cost provider in the market BrightLife is uniquely positioned to reach these groups. BrightLife’s business model offers clients an opportunity to transition into formal financial inclusion due to BrightLife’s partnership with FINCA Uganda. Under this program, unbanked Ugandan households that successfully repay BrightLife loans for a SHS product using PAYGo financing, build a credit history. This credit history enables access to FINCA Uganda savings, loans and other financial products. The scaling of a unique and digitally-enabled partnership between a PAYGo company and a financial institution is uncommon in East Africa.

Open Payments Ecosystem

Building on our past work in digital finance, UNCDF recognises the importance of digital payments as the basis for sustainable, economically impactful digital services. We worked with stakeholders in the ecosystem to push for partnerships and collaborations that foster an open digital payment ecosystem.

UNCDF partnered with mobile network operators Airtel Uganda and MTN Uganda, to improve the last mile infrastructure, increase mobile phone penetration, improve network coverage and develop relevant and affordable products for rural communities in Northern Uganda. UNCDF also partnered with technology companies, Ensibuuko Tech Limited and MobiPay Agrosys Limited, to create a network of digital community entrepreneurs (DCEs) aimed at increasing last mile distribution of digital related services and products such as phones, off-grid energy solutions, digital accounts, farming inputs, and electronic airtime. Read More here.

Engaging Banks and Fintechs on Alternative Credit Scoring Methods

With the growth of a number of fintechs collecting data as part of their business models, UNCDF commenced discussions with financial institutions and fintechs to figure out how this data can be leveraged by Supervised Finance Institutions (SFIs) to advance financing to fintech customers. As part of initial efforts in this journey, the Uganda Bankers’ Association in partnership with UNCDF convened a stakeholder meeting to explore opportunities to leverage fintech data to enhance current data being used by Financial Institutions in decisions related to lending funds to customers. The discussions aim at establishing a collaborative framework that can enable data sharing between fintechs and SFIs to enhance credit related decision making and credit extension to underserved populations such as farmers, women, youth and MSMEs among others.