Akaboxi, a project on financial inclusion, wins the 'Digitization for Development' award. "It is an initiative by and for the local population", the jury praises the winner, who is financed and supported by Entrepreneurs for Entrepreneurs and Close the Gap.
Why does Akaboxi deserve this award? Jury chairman and director of the Africa Museum, Guido Gryseels, motivates the choice: "Because of the strong local basis of the entrepreneurs, that Akaboxi developed for the local farmers in Uganda". "We also believe that the price - 25,000 euros to cover for training - comes at exactly the right time for them.
The Digital for Development Prize (D4D) is a biennial initiative of the Royal Museum for Central Africa (RMCA) with the support of the Belgian Directorate General for Development Cooperation and Humanitarian Aid (DGD). The prize rewards initiatives that use digitization as a lever for development. Akaboxi wins in the category for startups.
Due to the corona crisis, the inspirer Sarah Athuaire could not attend the award ceremony herself. In a video she explained how her parents, both teachers, helped the women from her village with a loan for planting material or school fees for the children. Then her father decided to set up a savings group, so that the people - mainly women - could help each other. "These women are the breadwinners of their family," explains Athuaire their importance for the whole community.
Athuaire herself worked for more than ten years as a credit manager at Centenary Bank, Uganda's largest microcredit provider. There, she experienced daily how financial exclusion hampers the development of local communities. That is why she started Akaboxi together with Joshua Muleesi, an IT specialist with software expertise.
Akaboxi digitizes the box - Akaboxi literally means 'savings box' - in which local savings groups keep track of their money and credit information. All transactions can be entered on the device. This way, all savings and credits are stored. This avoids discussions, but more importantly: it gives people access to the financial world, because the money goes to a bank account and people build up a credit history.
Akaboxi also provides coaching. "The weekly meetings of the savings groups are important, because it is an opportunity to discuss problems in group. Akaboxi guides them in this process," says Frans Verschelden, who as lead screener was closely involved in the preparation of the credit file at Entrepreneurs for Entrepreneurs (OVO). Akaboxi was eventually granted a loan of 42,000 euros in two tranches, the first of which was financed by Close the Gap, a Belgian non-profit organization whose mission is to close the digital gap, and the Acceleration Fund, OVO's investment fund.
To this end, Akaboxi participated in Sustech4Africa in the Ugandan capital Kampala, a selection procedure for sustainable companies and projects. OVO organizes these selections in Uganda, Rwanda, Senegal and at the African diaspora in Belgium. Those who manage to convince, during the multi- day boost camp, may receive a loan and especially guidance from a team of volunteers consisting of experienced entrepreneurs.
"Akaboxi had a social plan, but no business plan," says Verschelden, who was there himself in Uganda. "Savers pay Akaboxi a minimum fee for their services. That amount is quite a lot for the local farmers, but barely covers 5 percent of the costs. This situation represents an important challenge for us.
When Athuaire briefly stayed in Belgium for a master's program at Hasselt University just before the lockdown, she and Verschelden invested a lot of time in developing a business model. "Much more than just how we could give a loan, we looked for ways to turn Akaboxi into a sustainable project.
The first difficult discussion was about the costs. "Akaboxi wanted to reach 100 savings groups within two years. This would take an awful lot of resources and people. We recommended a more realistic target of 30 groups," says Verschelden. In addition, new income was sought. "The project must be able to break even without donations. That was our condition for granting the second tranche of the loan".
Akaboxi is now focusing on microfinance. It derives income from the interest margin, the difference between the interest paid on the OVO loan and the interest earned on the microcredits. A second new source of income is trading activities. Akaboxi takes over the crops of the farmers and brings them to the city to sell them.
"Akaboxi will never make large profits. That is not the intention, because it will be at the farmers' expense," says Verschelden. "But with this model they can break even. That's quite a revolution, because initially the project depended on donations, and so it came to a standstill without those".
Verschelden also went local in the region where Akaboxi is active, a difficult to access area near the border with Rwanda and Congo. "It was a pleasure to see how happy people were with our help".
For the OVO volunteer it was not always obvious. "I am an auditor, accustomed to figures and elaborated business models. For them, on the other hand, a balance sheet is something relative, something that you can adjust a bit. They are mainly driven by voluntarism, pure entrepreneurship in fact.
He had to adapt a bit to the way of thinking of Athuaire and her colleagues. "We strive to maximize profit, they strive to maximize the happiness of the community. They don't need the Sustainable Development Goals of the United Nations as a guide at all. Those sustainability principles are already ingrained in the project".
"I almost got an ulcer, but I learned an awful lot from them", concludes Veschelden. "I have gained new insights and friendships. It is really a very rewarding work".