Kagadi United Boda Boda Riders Association (Kagadi United) in Kampala, Uganda includes 22 members comprised mainly of boda boda (motorcycle) drivers. The group was created when it joined UGAFODE two years ago. For many members, UGAFODE is the first bank with which they have ever interacted. Kagadi United has been dedicated to saving as a group, meeting weekly and transferring their savings to their joint account at UGAFODE. After a year of saving in their GroupSave account, the group takes the money, divides it between all the members, and begins its next cycle.
The members have taken their savings practices even further, with some participating in secondary savings groups intended to solve “quick problems.” All the members, new and old, show that its possible to save big no matter your job or circumstances, with some setting aside as much as 10,000 UGX per week for their GroupSave account, 20,000 per month in an UGAFODE Ordinary Savings Account (OSA), and 20,000 per month in another informal savings group.
Kagadi United is led by Sunday (23), a young chairman and boda driver. He leads the group in building strong financial habits, because he knows “boda drivers are often scatterbrained when it comes to money.”
Faridah (47), the treasurer and only female in the group, is also one of the few non-Boda drivers and is a great example of how happy customers can be the gateway to more customers. She had previously banked at Centenary but left because she was denied a loan. UGAFODE then became her bank of choice after she received positive customer service accompanied with a loan for her second-hand clothing shop (mivumba). She became a strong advocate for UGAFODE and convinced Kagadi United to also bank with UGAFODE. Now, she is one of the Kagadi branch’s key mobilizers, bringing new customers to the bank nearly every week, and has become a well-known face at the branch.
For boda drivers Vincent (27), the group secretary, and Frank (20), the newest member, UGAFODE has been their first experience with a bank. Beyond their GroupSave account, these four members each have an individual OSA to keep additional savings for emergencies.
Before forming as Kagadi United, some members managed finances on their own, while others participated in other savings groups. These savings groups collected weekly deposits in a box and kept this box with an individual member on a rotating basis. The members were happy to save large amounts, which presented great opportunities for growth and for stability - a “certainty of money.” They also experienced a growth in solidarity in their groups and developed a greater appreciation for combined efforts, shared ideas, and group-generated discipline.
However, because the money was kept in a box in their other groups, it led to instances of theft. Several people disappeared with the money when it was their week to take the pot and never returned. Group members became wary and set out to find a more secure savings source.
Members of Kagadi United then gathered together as boda drivers and began searching for a bank that could meet their needs. Although the members considered other institutions like Centenary, Stanbic, and Pride, they decided to bank with UGAFODE. Faridah’s recommendation was a strong influence, but the group also favoured UGAFODE for its group-specific account, its convenient location “just across the road,” and its low transaction fees.
One of the biggest impacts on the group and its members resulted from simply formalizing the group. UGAFODE supported Kagadi United by helping them establish a constitution that specified group conduct and signatory responsibilities. The restrictions on who could make withdrawals from GroupSave was also appreciated, because the members’ money would be protected and have a chance to grow.
Significance of change
GroupSave has given every member of Kagadi United peace of mind about the safety of their money. There have been no reported thefts, and more importantly, no fear of theft hindering the group’s trust in each other.
Keeping money at the bank - out of their pockets and out of the home - has helped group members “keep hands off the money so [they] don’t waste money.” The savings pot then can continue to grow, so the year-end dividends to the members are significant - much more significant than what they could save individually.
This has correlated with a growth in membership and member applications for Kagadi United. Within the community, people are proud of their savings abilities and often compete with each other to save more. When people heard of how Kagadi United’s members were a step ahead in the savings race, they were inspired to join the group.
On a personal level, GroupSave has been instrumental in generating enough savings for members to invest. Faridah has not only invested in her mivumba shop, but has also sent her two children to school. They now have more opportunities to prosper, with one graduated and one in the last year of secondary school. Sunday has bought his own boda with the savings and has invested in land to plant trees and coffee plants. He has also purchased real estate in the trading centre to open a commercial store. “[GroupSave] helped us grow businesses now because there are savings,” said Sunday. “I couldn’t do it without the group - I used to spend the money. I like being able to share my ideas in the group for my businesses too!”
Vincent, like Sunday, has also bought a boda, and saved enough to fund and build a permanent house for his family. Frank has used his savings to buy a plot of land to build a house and is hoping that through the savings group, he can buy his own boda one day. With the help of UGAFODE and GroupSave, the future looks bright for the members of Kagadi United Boda Boda Riders Association and their communities.
In Uganda, MicroLead has supported UGAFODE to introduce mobile banking and group savings products. UGAFODE has taken a partnership approach to group savings, working with existing Community Based Organizations (CBOs) to facilitate financial services linkages to informal groups. It has also introduced a mobile distribution channel, AirSave, to better serve its customers.
Under the MicroLead project, MEDA, as the TSP for UGAFODE, has focused on connecting rural savers to the financial institution and supporting UGAFODE in its transition to a deposit taking institution. Their project work and greatest successes include: (1) using human centered design research to develop both a new savings product, GroupSave, which targets informal savings groups, and a new delivery channel, AirSave, which allows customers to check balances from their mobile phones and make deposits and withdrawals at mobile money agent locations, (2) training staff on key principles of customer segmentation, customer engagement, incentive programs, performance management and marketing and (3) helping define new strategies for better client retention and service.
MicroLead is a UNCDF-managed global initiative challenging regulated FSPs to develop and roll-out deposit services which respond to the rural vacuum of services. With the generous support of the Bill & Melinda Gates Foundation, The MasterCard Foundation and the LIFT Fund in Myanmar, MicroLead works with a variety of FSPs and technical service providers to reach rural markets, particularly women, with demand-driven, responsibly priced products offered via alternative delivery channels such as rural agents, mobile phones, roving agents, point of sales devices and group linkages. This is combined with financial education, so customers not only have access but can effectively use quality services.