The introduction of mobile money in Uganda in 2009 has been a tremendous success. The mobile money business model involves a partnership between a mobile money operator and a commercial bank. The services offered have so far been for domestic remittances, basic retail payments and money storage services.
In 2013, the Bank of Uganda issued mobile money guidelines, which stipulate the approval process for the mobile money services, as well as the roles and responsibilities of all parties involved. They also stipulate the safeguards to protect customers among which include:
Uganda is the world’s fifth largest producer of sesame, the Northern and Eastern regions of Uganda being the main centres of production of this crop with a vast number of small scale farmers. The market structure involves numerous traders, which reduces the farmer’s share of the final price. However, if farmers were to sell collectively at regional level there is potential for a 10% increase in prices compared to selling at the farm gate.
In the last season, TruTrade sourced 25.4MT of simsim from over 986 small scale farmers in Acholi sub region worth US$19,859; making the farmers to earned a total amount of US$16,707. Out of this, over US$939 was paid as a bonus to the farmers. The price difference that the small scale simsim farmers got by trading with TruTrade was 13% higher, which meant giving a total added farmer income of US$1,703 more than they would have otherwise attained while dealing with the middleman.
Uganda has been experiencing a remarkable rice boom, supported by good farming practices and high market prices. This growth of Uganda’s rice production has contributed to greater food security and a reduction in rice imports. Rice is a staple food in Africa and Ugandans love eating the crop because of its nutritional value. However the challenge for smallholder rice farmers is that the market is dominated by large-scale farmers who benefit from economies of scale and so can sell large volumes at low prices to traders. Smallholders simply cannot compete with this.
There is a growing demand for agricultural produce in Africa, yet smallholder producers struggle to make a living. Alex Byekwaso and Jacinta Namubiru are two TruTrade franchisees in the forefront of sourcing rice from small-scale farmers from Budaka and Pallisa districts in Uganda. These farmers would otherwise have no space in the market since the large-scale farmers flood it with their produce. Alex trains the farmers on harvesting, postharvest handling and packaging, so that clean dry rice reaches the buyer.
Moses Gichuru is managing director of Bonde Soko Services and a TruTrade franchisee. He has been in the cassava sourcing business for eight years now, supplying processors with cassava to make porridge flour. Bonde Soko now wants to move up the value chain, tapping its sourcing network for cassava which it will process to make Cassangano flour. Cassangano is a mixture of wheat and cassava flour produced to meet standards demanded by the Kenyan market. Blending wheat with cassava reduces the gluten content of the flour while adding vitamins A and B12 ensures the flour conforms to government fortification policies.
The target market is the low income households who usually use flour which is directly milled and does not undergo fortification, standardization and inspection processes. Therefore cassava blended with wheat flour and suitably fortified provides a cheaper and nutritious alternative to wheat-based baking flours that less well-off consumers are currently using. Bonde Sonko has applied for certification from the Kenya Bureau of Standards (KEBS) Certifications, after which Cassangano will be launched on the market.
From a small trading center of Aburcero in Dokolo district, Tonny Okech has emerged as one of TruTrade's rising managers. A father of four, Tonny once survived on his income as a smallholder farmer and owner of a small hair salon. Taken together, these businesses earned him up to 200,000 Ugandan shillings ($60) a month. Today, Tonny is the proud owner of a certificate of incorporation for his own company, Cherish Agro Uganda Ltd.
Tonny started working with AgriNet in 2010 in Aburcero parish. He soon emerged as a leading performer and in 2012 he was promoted to network manager for Alebtong and Otuke districts. A network manager runs a network of licensed Transaction Security Service (TSS) agents who manage collection centres and source produce from smallholder farmers at a fair price.
Together with his agents, Tonny checks the quality of the produce and organizes payment. He is in charge of the security of the produce and ensures that it reaches the buyer in good condition.
TruTrade has been recognized as a fair trade company by Kenya Federation for Alternative Trade (KEFAT). KEFAT is a Kenyan affiliate of World Fair Trade Organization (WFTO); it certifies companies that are doing fair trade. This is a big deal for TruTrade since it is our first recognition of TSS business model to be fair to farmers. With the certification, TruTrade’s doors are open to more opportunities.