The impact of digitizing rural farmer Groups
Agriculture is a vital sector in Uganda, contributing to over 20% of the country’s Gross Domestic Product (GDP) and employing over 70% of the population. However, many smallholder farmers in rural areas of Uganda face significant challenges. These include accessing markets, financial services, and information necessary to improve their productivity and income.
Digitizing rural farmer groups in Uganda can help address these challenges and transform the lives of smallholder farmers. A report by the Consultative Group to Assist the Poor (CGAP) found that digitizing payments for farmers in Uganda increased their income by 17% and reduced transaction costs by 22%. Farmers could also use the phones to manage operations and connect to a wider audience.
Moreover, according to the Uganda Communications Commission, the country has over 27 million mobile phone subscribers. This is a significant opportunity for leveraging mobile technology to reach smallholder farmers. A study by the Grameen Foundation also found that providing agricultural information through mobile phones increased farmers’ income by 17% and reduced the time they spent searching for information by 50%.
Increasing access and use of smart phones for rural farmers can help improve the efficiency of supply chains. It can also reduce wastage and increasing the quality of agricultural products. This, in turn, can increase farmers’ income and improve food security for the population.
GivingHope Foundation provides services through organized informal village groups known as Village Savings and Loans Associations (VSLA). All members of these groups are also members GivingHope Foundation. Savings Groups are the primary source of financial services for millions of unbanked smallholder farmers in Uganda and around the world.
How the DreamSave App will impact farmers
We have partnered with Dreamstart Labs, to offer digitization services for our rural farmer groups in Hoima, Uganda. This will be done using their innovative DreamSave mobile App. DreamSave is an innovative mobile app that helps people in the emerging markets create “digital savings groups”, which act as informal community banks. The app allows individuals to digitally set and track savings targets, check on their progress to repay loans or reach financial goals in real-time — while building their credit history. The App also reduces meeting times as well as provides for building leadership capacity within the group though rotation of roles.
We now use much less time during our weekly saving meetings. We find it easier track each person's savings and loan balances through DreamSave App. We thank GivingHope Foundation for bring this innovative technology in our group
In their individual groups, a member is able to request a short-term loan. This can be money to expand their small business, send children to school, buy medicine or meet an emergency need. As groups meet, DreamSave generates data-driven credit scores that can be used to offer micro-loans and micro-equity to qualifying members. Collectively, these groups are able to manage millions of Shillings. This will help them mitigate some of the key challenges faced by smallholder farmers in developing countries like Uganda.
Our collaboration aims to leverage technology to efficiently manage our VSLA groups. This will in turn help smallholder farmers build credit history, increase collaboration, improve incomes and therefore end extreme poverty. Digitizing rural farmer groups will help transform their lives, promote economic growth, and improve food security in Uganda.