How Dairy cooperatives in Western-Uganda are digitizing their records

Digitizing basic transactions such as records of milk delivery and sales, is essential for the further growth of the dairy sector in Uganda. A small change can bring big changes. If instead of writing down the 15 litres brought to the collection centre by farmer Godfrey this data is entered into an application, farmer organisations unlock the power of data. And with this information farmer groups can potentially access financial services which are now not willing to provide financing, because of the lack of collateral.

Nearly 80% of the people in Uganda live in rural areas where banks have no or limited presence. Consequently, the countryside is lacking financial services needed to develop the local economy. Over 70% of Ugandans are active in agriculture. The sector is largely organized through farmer organisations such as cooperatives, who typically have their own Savings and Credit Cooperative Organisations, SACCOs, that provide financial services to their members.

However, cooperatives and SACCOs struggle with many issues such as limited access to finance, high loan default rates, safety concerns around large quantities of cash and cumbersome admin processes. It is challenges such as these that prevent cooperatives and SACCOs from growing and professionalizing their business; becoming an agri-business that can impact the lives of small-holder farmers, their members. Especially in rural areas.

That is why the UNCDF supports the development of an app that will provide dairy cooperatives with the right tool to digitize their transaction records. Across the dairy sector UNCDF is supporting digital payments on mobile phones instead of in cash. One of the key lessons learned from digitizing these payments, is that the foundation first needs to be laid. Paper-based cooperatives need to go digital.

Together with Laboremus Ltd., UNCDF is designing and creating an app that will do just what is needed for dairy cooperatives. Pius Peter, General Manager from Dwaniro Dairy Cooperative says that he is looking forward the new application being used. “I feel with the step to digital we are entering a modern Uganda, where we can ensure our members, small holder farmers, access to the finance they need to grow. Entering our delivery and sales in this application will advance and strengthen our cooperative and the way we serve our farmers.”

In order to build on experiences from organisations that already digitized their records, UNCDF is organizing the third FinTech4AG meet-up on the 7^th December 2017. In this event, cooperatives SACCOs as well as NGOs and other organisations, will share their main learnings. What are the main challenges for farmer groups who would like to go digital? And how can these challenges best be overcome?

Jointly answering these questions will provide feedback and a clear way forward for the further development of the application. Insights that will accelerate the digitization of farmer cooperatives all across the country, in different value chains to drop their notebooks and pick up their tablet.