Quest Digital Finance connects the unbanked with formal credit systems

Renew Capital Angels invests in the company’s Akellobanker platform for financial inclusion and agricultural growth

KAMPALA, Uganda–(BUSINESS WIRE)–Uganda is home to 25 commercial banks, four microfinance deposit-taking institutions (MDIs), three lending institutions, and more than 300 non-deposit-taking microfinance institutions (MFIs). However, according to the 2018 Finscope Survey, published by Financial Sector Deepening Uganda think tank, an estimated 89% of the adult population is still unbanked, meaning they do not have an account with a formal banking institution. . Not only that, the economic data collection website Trading Economics estimates that 74.45% of Uganda’s 45.7 million people live in rural areas.


Lack of access to banks and the credit they offer hampers these populations’ ability to access basic goods and the resources needed to build successful businesses. And yet these days, smallholder farmers and other entrepreneurs in rural and peri-urban Uganda are discovering that it’s not the plow, but the smartphone that goes before the horse. Quest Digital Finance, a Ugandan technology company, is changing that by putting the power of banking and service delivery in the hands of farmers and entrepreneurs using its digital platforms.

The platform enables SACCOS (Savings and Credit Cooperatives) and microfinance institutions to achieve an end-to-end digital transformation and thus improve reporting and accountability that de-risks these entities. Consequently, they can access credit from financial institutions. Akellobanker hopes to eventually deliver combined products and services to farmers and entrepreneurs and other actors in the value chain on credit. Renew Capital, an impact investing firm that fosters the growth of small and medium-sized businesses in East Africa through its Renew Capital Angels network of investors, is now fueling that effort by providing the funds Akellobanker needs to expand its reach to more than 100 cooperatives serving over 100,000 farmers and micro, small and medium-sized enterprises (MSMEs) in Uganda. Akellobanker will focus on its digitization agenda of integrating more than 350,000 farmers and entrepreneurs into the digital economy and using data to deliver desired products and services on credit.

“If you look at finance 10 years ago, commercial banks were the owners of financial inclusion. But five years ago, the fintechs (small financial technology companies) came along and showed the banks that we could break into places they weren’t reaching,” says Jean Onyait, team leader at Akellobanker. “That’s breaking down a monopoly and creating healthy competition, which goes a long way toward lowering prices and making services much more affordable for local communities.”

“Akellobanker’s market potential and long-term commercial viability attracted Renew Capital, particularly as the need for access to financing increases,” says JC Oelofse, Director of Shared Growth Services at Renew Capital. “Developing a digital platform that aggregates financial data generated by the unbanked to facilitate access to credit is a key lever for growth in the informal sector. This credit from financial institutions facilitates the sale of inputs to grow the informal economy and brings a well-defined impact case.”

About Renew Capital

Renew Capital is an Africa-focused impact investment firm that supports innovative companies with high growth potential. With a presence in Ethiopia, Rwanda and Uganda, Renew Capital manages investments made on behalf of Renew Capital Angels, a global network of angel investors, foundations and family offices seeking financial returns and sustainable social impact. Since the establishment of the network in 2012, the Angels have been actively investing in the region, mobilizing millions of dollars in the middle market of Africa.

contacts

Juliana Gage

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