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Digitization of SACCOs in Uganda: Drivers and Impact Study

Published by
David Nanambi Wayiku & Prisca Adong
2023
Asigma & Mercy Corps
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  • This impact and learnings report presents outcomes of the collaboration between Mercy Corps and Ensibuuko, which partnered in 2013 to develop and market Ensibuuko Mobile Banking and Information System (MOBIS) to SACCOs. One of the first users of this system was Rukiga SACCO Ltd in Uganda. The study presents the impact that digitization has had on Rukiga SACCO. Two other SACCOs are used as case studies as well. Savings and Credit Cooperative Societies (SACCOs) and Village Savings and Loan Associations (VSLAs) are common in Uganda, but many do not have digital Management Information Systems in place and therefore suffer from a lack of oversight, high operating costs, and a risk of fraud.
  • Digitization can provide many benefits, including increased transparency, accountability, improved reporting, increased productivity, and operational efficiency.  It can also make it more convenient for members to receive services due to mobile applications.
  • To provide a benefit to SACCOs and VSLAs, digitization needs to be accessible and sustainable. High transaction costs and user fees create burdens to SACCOs and VSLAs that make digitization less accessible long term.
  • Micro-lending is a promising emerging trend which supports many customers who are typically unable to pay for digital solutions. The belief is that lending empowers members of SACCOs and VSLAs to participate in income generating activities which increases their savings/loans participation which helps the organizations pay for digitization services.

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