Mobile money has been hailed as the next great leap forward in financial inclusion. But financial service providers and clients are learning that not all mobile money is the same.

Mugagga Sekyanzi, 26, is a born entrepreneur. Beginning with his organic sugar business at the age of 13, he has invested and reinvested his experiences and resources into the business he owns and manages today—Mugagga Industries Uganda Ltd.

“I failed 100 times and plus. Other people started laughing at me, saying, ‘You know, now, you have failed 100 times. Why don’t you give up?’ Despite his failures, Mugagga was not discouraged.

“Whatever mistake I did, it was a step forward in my sight. I would discover one way that does not work. If I make 100 mistakes, it means I have discovered 100 times which would not work,” Mugagga says.

Now based in Muhoro in Kibaale District in western Uganda, he manufactures and supplies a diverse portfolio of products, including soap, jelly, organic sugar, perfume, and eucalyptus.

Mugagga has embraced technology for his business, regularly transacting with customers and suppliers using mobile money services. His wholesale customers pay him most often with mobile money, because they are located far from him. However, as he discovered a few months ago, using MTN Mobile Money can put him at risk of not being able to access his money when the network is down. After he had gone to Kampala to do his shopping, Mugagga was unable to buy supplies, since his funds were on his mobile money account. “I spent two days with no network and yet, I had to go shopping. That is when I saw Mr. Emma [UGAFODE, Kagadi Branch, Sales & Marketing Officer]. He asked, ‘Why is it today you have not gone shopping?’”

After learning about the benefits of saving at UGAFODE and the AirSave platform, Mugagga realized it could solve many of his problems. AirSave is a UGAFODE-designed mobile banking platform connecting users’ mobile money e-Wallets to their UGAFODE bank account through a short code USSD number. Under AirSave, users can make deposits and withdrawals to and from their UGAFODE account by moving money into and out of their mobile money e-Wallet.

Mugagga immediately opened an account at UGAFODE and registered on AirSave. With AirSave, Mugagga is able to make both deposits and withdrawals into his UGAFODE account from his mobile money wallet.

Now, Mugagga transfers the mobile payments from his clients to AirSave every other day. When asked about whether the AirSave fees were a challenge to using the product, Mugagga simply stated that he compares the cost of AirSave to the cost of taking a motorcycle taxi trip between his home and the UGAFODE branch in Kagadi, and he finds the platform much more economical.

One big change he has experienced is that when he was only using his e-wallet for savings, the temptation to spend the money was high. Not only would he find himself spending the revenues on unplanned items, but if he did leave money in the e-wallet, it would not earn interest.

“When it comes to planning, Ugafode’s AirSave helps a lot--money is a temptation. As soon as you receive 100,000 UGX [$30 USD], your friend will be sick, and you have cash at hand. Really, can you fail to give that friend money? But the moment you receive it on your account, you transfer it to the bank [with AirSave]. You can tell your friend, ‘I moved it to the business money,’” says Mugagga.

AirSave has been the absolute compliment to Mugagga’s financial goals—both personal and business. Not only has it kept his business running smoothly, but it has provided him the discipline to protect his profits and not be tempted to use them for personal consumption. Instead of having money on a mobile money wallet or cash in his pocket, he immediately moves his business revenues to his UGAFODE account to reinvest in his business. He is now more confident in managing his finances and is assured that business growth will lead to personal growth. “Now, profits have increased because withdrawals have reduced.”

Mugagga plans to use AirSave with his business partners for the new business account he has opened at UGAFODE. The impact AirSave has had on his life has turned him into a strong advocate for UGAFODE because he wants to see others benefit and thrive from this technology.

About UGAFODE

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.

About MEDA

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.

About MicroLead

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.