Digital lender Asante boosts mobile money agents
Entrepreneurs often need loans in order to grow their businesses. In East-Africa, owners of Micro and SME companies can borrow from digital lender Asante Financial Services Group (Asante FSG), instead of waiting for seven days for a loan at a microfinance bank.
Men are carrying plates, sheets and bars of steel, tying them to bicycles for transportation in Kansanga, an outskirt of the Ugandan capital Kampala. Sandwiched between three hardware shops, surrounded by the buzzing activities of this rapidly growing city, 32-year-old Edgar Tugume owns a small shop. His business is far less tangible than the heavy steelworks around him: Mr. Tugume and his wife Maureen operate a business in financial transactions, locally known as ‘mobile money.’ Customers come to his shop when they want to send and receive money to and from relatives or colleagues elsewhere in the country, without physically travelling there with a stack of cash.
Edgar and Maureen Tugume in their store, on the outskirts of Kampala
His business is all about ‘float,’ Mr. Tugume, a father of two, tells me. Float is the amount of mobile money he has loaded on his mobile telephone. This can be exchanged for cash. ‘For instance, someone comes to me and wants to send 2 million shillings (530 euro), but I don’t have enough float. Then I may lose that customer, since he will go to my competitor,’ said Mr. Tugume.
A recent addition to the mobile app behind the payment system has ensured that he now has a solution. With just one click, the entrepreneur can top up his float with an instant loan from the Quick Teller app. This loan is provided by Asante FSG, a fast-growing African start-up company that launched in 2018 in Kenya, and has since provided a total of 500,000 loans in the countries where they operate (Kenya, Nigeria, Rwanda, and Uganda). Asante FSG Launched in Uganda in 2021.
“Small businesses are a source of livelihood for many people across the African continent,” said Chidi Okpala, the founder and CEO of Asante – which means thank you in Kiswahili. “Most banks don’t service micro and small enterprises well. Many clients feel intimidated when they enter a bank. Others opt for microfinance institutions. The difference is that Asante FSG is fully digital, therefore we don’t need any brick-and-mortar offices,” said Mr. Okpala. “This means there are few barriers: since it is all digital, it doesn’t matter if you live in a city or in a small village.”
Debrah Naluwagga in her store serving a customer
Elsewhere in Kampala, in a much quieter part of the sprawling capitol, Debra Naluwagga runs a small shop. She combines sales of sodas, drinking water and household goods like light bulbs with a mobile money business. “Most of my profit actually comes from the mobile money rather than the other things I sell,” Ms. Naluwagga said, while keeping a close eye on one of her three children. She was also recently given the option of getting float on loan from Asante FSG. “I already made use of that three times,” she continued. “One of my customers wanted to make a large transaction, and the larger the transaction, the higher my commission. When I realised I didn’t have enough float, I borrowed it via the app.” The loan was repaid well within the required seven days.
Although the loans come from Asante FSG, end users simply find the option in the app of a digital payments company Interswitch, one of the leading payments and mobile money companies active in Uganda. “We are looking to extend this service to all the major telecom companies in Uganda, which will enable us impact a larger customer base and unlock further value for this underserved group,” remarked Maxwell Muyonjo, who leads the Asante team in Uganda. “Next to providing float to mobile money operators, we are also excited to be kicking off our second round of financing of small holder farmers in rural areas under our partnership with Vodafone Mezzanine and IDH Farmfit,” Mr. Muyonjo added.
Asante FSG, currently active in four African countries, is still at an early phase in Uganda. “The loan system is therefore not yet available for all clients of our partner Interswitch but the idea is to roll this out quickly,” said Mr. Mujonyo.
“I am certainly going to take out more loans,” concluded Ms. Naluwagga, who earns up to 200,000 Ugandan shillings per month from mobile money, just over 50 euro. Mr. Tugume said he makes almost twice that amount, being based in an area where a lot of cash money changes hands rapidly in the hardware shops nearby. “I have already recruited 10 other mobile money agents, because it is a good way to earn a living,” the entrepreneur said. “Taking loans via the platform saves me time going to a bank, which would mean having to close my shop for some hours. I will certainly keep using this new feature.”
Written by Arne Doornebal