UGAFODE’s Three-Pronged Strategy to Reach Rural Women
  • March 31, 2016

As part of UNCDF’s MicroLead Expansion programme, UGAFODE, a microfinance deposit-taking institution in Uganda, wanted to expand access to savings for rural women.  As they conducted their market research, UGAFODE discovered an unmet need in the market. Existing savings groups didn’t have a safe place to store their money. UGAFODE also realized the biggest challenge facing its potential customers was access – both for client convenience and security.

Mobile banking appeared to be the answer, enabling customers to reduce transport costs and move money safely. However, UGAFODE and its technical service provider, MEDA, realized that introducing mobile banking to customers would require serious marketing efforts. It implemented a three-pronged engagement strategy, focusing on community based organizations (CBOs), agents, and customers.

CBO Engagement

UGAFODE decided not to focus on forming savings groups (SGs) itself. Instead, UGAFODE worked with CBOs which had already created savings groups under the SILC model (Savings and Internal Lending Communities). Either field agents (FAs) or private service providers (PSPs) form, train, monitor and support the SILC groups. UGAFODE works directly with the CBOs to facilitate the linkages through the FAs and the PSPs. The FAs and PSPs then connect UGAFODE to the groups, and UGAFODE promotes and opens savings accounts for the groups. This facilitation for FAs and PSPs is funded by the Manitoba Committee on International Cooperation.

After the first year of this arrangement, UGAFODE and MEDA realized they weren’t seeing a lot of activity once groups had signed up, and the signup process itself was lagging. The problem? The compensation the CBOs received from UGAFODE wasn’t covering all their costs. UGAFODE is revisiting their compensation system, and working to implement an incentive program directly related to the level of client activity.

Agent Engagement

When UGAFODE introduced the AirSave mobile banking channel, it was confronted by three challenges. First, mobile money agents often weren’t physically present in the rural areas where UGAFODE was targeting savings groups. Second, when they were able to find an agent, the agent often didn’t have enough liquidity to do a large transaction on behalf of a group. And finally, agents sometimes had issues with customer service. They weren’t trained enough and couldn’t fully support client transactions.

To address the first issue, lack of mobile money agents, UGAFODE identified new agents in partnership with a local telecom which already had an agent network in place.  UGAFODE is training staff on how to better engage with these existing agents. To address the training and customer service issues, UGAFODE has developed a 10-minute, one-on-one training for mobile money agents that UGAFODE staff can implement while visiting agents in the field, reducing the cost to UGAFODE. They’ve also developed a new agent scorecard to rank agents at the on-boarding stage.  During this process, agents are evaluated on their level of liquidity, customer experience, and reliability. For example, agents with low liquidity would not be appropriate for savings groups.

“It helps us to grow the deposit portfolio,” says Nathan Barigye, UGAFODE’s Business Growth and Development Manager, “because the issue of access was a big one. People were not trusting formal financial institutions and UGAFODE because of our lack of physical presence in their areas… MNO (third-party) agents make it cheaper for customers to save. Limited access typically leads to dormant accounts, and these dormant accounts get eaten away by service charges…”

Customer Engagement:

Perhaps most importantly, UGAFODE took a second look at how it serviced its customers. The financial institution developed a strategy integrating geographic scope, client interaction touchpoints, and clear value propositions. The approach implemented by UGAFODE was based on a MEDA framework which addresses strong customer engagement and encourages customer loyalty and activity. MEDA also brought in a human-centered design firm for support on product development so that the new product was designed to maximize the benefits to clients.

Geographic Scope. The financial institution discovered that its geographic distance from customers correlated with the dormancy rates of client accounts. “It’s difficult to maintain a relationship with a customer who’s 120 km away, and expensive for both the customer and institution,” says Nathan Barigye, Business Growth and Development Manager. So UGAFODE identified the operational radius required to both mobilize customers and to maintain a strong client relationship. To do this, UGAFODE looked at questions such as: How often should its officers get in touch with their customers? How far should the financial institution go to mobilize customers? What are the specific activities that occur at these touchpoints?

Client Interaction Touchpoints. UGAFODE interviewed savings groups and heard a common complaint – dissatisfaction with the amount of engagement with UGAFODE. The institution recently began implementing what it calls “seven touches.” Once an account has been opened, UGAFODE staff must return to the clients to engage with the client seven times. The engagements aren’t all face-to-face. They can also be a SMS or a phone call. The first three engagements take place within 90 days of an account opening or registration (see figure 2).

Value Proposition. The financial institution has shifted away from its prior, generic approach of promoting all products to every segment.  Instead, it is developing value propositions targeted to each of its market segments. First, the financial institution’s product development officer conducts customer research and product reviews. From the data gleaned, UGAFODE refines its products to suit specific customer needs and creates benefit statements. These statements describe the benefits of each product so UGAFODE staff can sell the benefits to the appropriate customers. It then markets the products to targeted segments. This approach has enabled UGAFODE to facilitate and support customers, so they can make better use of their savings accounts.


If it sounds great, it is, though much of this is still in the process of implementation. But how can other banks and MFIs bring this sort of process to their own institutions? For UGAFODE, implementation required training at all levels – from credit to operations, and from the head office to the branches. And training in the new savings products and systems was not limited to savings staff. UGAFODE understood that the entire financial institution needed to understand the product, the clients, and the value propositions.

UGAFODE’s next step was to return to its branches and develop savings mobilization strategies specific to each branch. The branches identified the customer segments they were targeting, set outreach goals, and designed unique customer engagement strategies.

Conclusion and Lessons Learned

UGAFODE took a human-centered design approach to customer engagement. From their research, they learned their low-income customers may have specific needs, but most want access to formal financial services. “It also helped us to understand that customers need to build trust within the financial institutions,” says Barigye.

“I’d advise other institutions to take a holistic approach to understand the customer,” Barigye continues, “to build relationships with customers, and to have value propositions for the products and services that they offer. Customers are looking for solutions. They only have enough to put aside for specific problems and needs, so financial products should focus on solving those needs.”

About MicroLead

MicroLead is a UNCDF-managed global initiative supporting the development and roll-out of deposit services by regulated FSPs, seeking to respond to the rural vacuum of services. With the generous support of The MasterCard Foundation, the Bill & Melinda Gates Foundation and the LIFT Fund in Myanmar, MicroLead works with a variety of FSPs and technical service providers to reach rural markets with demand-driven, responsibly priced products offered via alternative delivery channels such as rural agents, mobile phones, roving agents and point of sales devices. This is combined with financial education, so customers not only have access but can effectively use quality services.

From 2009 through 2016, MicroLead will reach over two million new active low income savers.  The MicroLead programme results in:

  1. Creating enabling environments through advocacy (focus on pro-poor and pro-savings regulatory frameworks and policies at the national level);
  2. Economic growth through domestic resource mobilization (i.e. savings);
  3. Financial inclusion through technology (i.e. reaching last mile through branchless banking);
  4. Resilience through savings groups (creating strong support networks in times of scarcity); and
  5. Empowerment and transformation through social cohesions (stronger, more empowered individual members of savings groups).