Unlocking SACOO Momentum Key to Universal Financial Conclusion: A Case of PostBank’s Wendi Mobile Wallet

Unlocking SACOO Momentum Key to Universal Financial Conclusion: A Case of PostBank’s Wendi Mobile Wallet

By Brenda Mpoora

Kaka Mbabazi feels more in control of her life these days. She turned 73 at the beginning of this year and has never owned a bank account. Until June this year, when her granddaughter Patience signed her onto PostBank’s Wendi mobile platform in addition to registering her with her local SACCO.

Long story short, Kaka can now safely save her money—she suspects her other grandkids were pinching the money she used to save in her suka. The money was saved in a knot in the corner of her suka, which she wears daily.

But even better, all her grandchildren can now send her money directly to herself. She no longer has to go down to the trading center to get money sent from the mobile money vendor.

Kaka’s experience is an example of the immense possibilities opening, not only for the previously unbanked masses but for the economy.

The coming together of the Savings & Credit Cooperative Schemes (SACCOs) and fintech is proving to be a powerful tool for promoting financial inclusion.

According to the recent Finscope report released earlier this year, SACCOs recorded the fastest growth in uptake at 14 percent from five percent in 2018. The report also showed Village Savings & Loans Associations (VSLAs) and SACCOs—in that order, are being used by most Ugandans as savings mechanisms.

But in addition, the mobile phone has seen its rates of adoption as savings mechanism jump to 42 percent last year from 23 percent in 2018. Meanwhile mobile phone ownership now stands at 67 percent in the rural areas.

To take us back in time, access to financial services was confined to the big urban areas. To have access one would have to walk to a branch, fill in massive amounts of paperwork while interacting with intimidating officials and very often still fail to meet the bank’s requirements for opening an account or giving up when one came to face with the onerous terms around opening and minimum balances required to open and maintain the account.

The explosion in SACCO numbers means the fear factor has been greatly reduced and now with the adoption of fintech, financial inclusion is becoming a real possibility for more and more people, for whom this was a myth.

Since the launch of Wendi mobile wallet by PostBank, in October last year we have been pleasantly surprised at the demand for these services and the immense potential that this convergence brings to mobilization of resources and access to financial services.

In about a year since Wendi was launched, we have signed on hundreds of thousands of individuals, thousands of SACCOs, VSLAs and processed millions of transactions from mainly the previously unbanked populations.

It helps that Wendi members need not have an account with PostBank or any other bank to sign on.

From a macroeconomic perspective this mobilization of resources can only benefit the economy with higher savings rates and subsequently more credit resources, fulfilling the bank’s purpose of fostering prosperity for all Ugandans wherever they are.

While there is widespread adoption of the mobile phone, there is great need for digital literacy, so that people can be more comfortable exploring and using the full potential of their phones. We find it is a daily endeavor to teach our clients how to use their phone not only to access Wendi mobile wallet but to improve their own productivity.

Secondly, while there are thousands of SACCOs out there few are licensed. This is often because some do not meet all the compliance criteria to be recorded. We are playing a handholding role in helping many of the SACCOs we have onboarded on Wendi to transition to the point that they can be registered with UMRA. It goes without saying that greater opportunities avail themselves when these organizations can be properly incorporated.

Similarly, the VSLAS – often a handful of family and friends coming together to save, we work with, we are helping transition to SACCOS.

Also, by providing a readymade interface between their systems and the PostBank, Wendi is helping these organizations adopt industry best practices, making them more secure and trustworthy for their clients.

The one year of Wendi’s operation has opened our eyes to the exciting and immense potential of this convergence of SACCOs and VSLAs. Therefore, we will continue to explore and innovate services that will enable Ugandans to grow and prosper.

The author is the head of fintech business at PostBank.