Interview with Princess Shamirah Kimbugwe, Country Manager of Cellulant Uganda

What is your assessment of the sector? What are the latest trends?

In Uganda, we are in the fintech sector. There is a lot of innovation around payments and specific needs and services. We are seeing innovations around money movement, electronic payments, education, and banking. That is on the market side. But on the governance side, there is a lot happening as well. Before, regulation was a sore point, but there have been tremendous steps taken in rectifying that. There is a national payments bill that should be passed by Parliament very soon. There is also talk of direct regulation by either the Bank of Uganda or UCC. It will no longer be a dark area for us. Once you are regulated, there are a lot of things you can do. In terms of platform capabilities and solutions, there is a lot of talk in the fintech space about blockchain technology, bitcoin, and cryptocurrency. There is a lot of development, a lot of growth, and a lot of players that have entered the market. There are now over 100 fintechs in Uganda. In terms of the space organization, there is now more association pairing which is under the FinTech Association of Uganda.

Is the sector competitive?

Competitive is an understatement. It is a very competitive industry that changes literally by the day. We are fighting for a very small market space and the same customers. In terms of innovation, product scope, and delivery, we have to be very competitive. You have to be on top of your game. As a company, you have to be willing to change and be adaptable and agile every day. It is constantly moving. We compete on so many levels including product, platform capability, customers, etc.

What makes you stand out?

We are working very hard to fully digitize the milk value chain from “farm to glass” as well as the insurance sector. This is vital not only for the survival of the company but also to continue our relevance as a fintech in Uganda because we are doing mobile banking and payments very well.

We stand out on three or four levels. While most of the fintechs are concentrating on just e-payments, we are positioning ourselves as a marketplace digitization company. We dig deeper. We do not just provide a payment, but we provide more robust and more in-depth solutions. We go to specific sectors and then digitize the whole value chain, as you can see in what we are doing in agriculture, banking, education, insurance, and remittance. The second thing that makes us stand out is the type of model that we have when it comes to source of payment. Most fintechs just rely on mobile money, but we rely on a few different things. We rely on the banking side, mobile money, and wallets to be sources of money. The fact that we are deeply connected locally and internationally as a company is one of our biggest strengths. We give a single pipeline model. When a business comes to us through a single API or connection or contract, they can get a multitude of services that can be delivered to over 18 countries. This gateway that we can offer is unbeatable. Another thing that makes us more competitive and more visible among fintechs is our international presence. When a business wants to scale and do cross border, no one beats us.

Do the other international companies offer competition?

We do not look at them as competitors, rather as potential partners. With WorldRemit for example, their core business is remittance. When I get the money into my account, someone still has to help me either spend that money or transfer that money elsewhere. That is where we come in.

Can you explain your model?

Uganda is the food basket of Africa and our economy’s backbone is agriculture. We have a platform called Agrikore which is a “farm to fork” digitized solution. It is a value chain digitization which gives models to the agriculture sector. We offer farmer profiling where we profile a farmer, bring them onto our platform, we know how much acreage they have, where they are located, their output, their problems, and the size, quantity, and quality of their output. We then present that information to buyers in the form of processors. We provide a market for both the farmers and at the same time, we provide data to the processors. From the processors side, we digitize the channel to the last mile which is the consumer. We enable the interconnection between the farmer, the processor, and the distributors and sellers. We also enable digital payments. The farmers can get their payment directly into their wallets. For example, if a farmer has provided 500 L of milk this month, they will get that equivalent of money into their account, whether it is a mobile money account, a private wallet, or a bank. We also provide in the Agrikore system a management tool which helps the processor or the user to create users on the platform so they can track the performance of the players in the same ecosystem. There is verification so someone cannot claim to have given 500 L when in reality they only gave 200 L. There is also a quality control perspective and tracking so you can know that if someone has been providing a quality of 70% and all of a sudden, they drop to 30 or 40% you can uncover the problem easily. There is also tracking of money movement between the banks, processors, and farmers. It is a whole ecosystem that also then looks outward in terms of connecting all that to input providers such as people who provide pesticides, fertilizers, types of medications for livestock, etc. We provide that so a farmer can actually order through the system and it can be delivered through the system. The entire digitization is broken into two parts. We have the commoditization or fulfillment side and then the payments side. The second thing that we do in terms of service provision is banking digitization. We partner with different banks of different scopes and also different localities, whether it is local or cross border, and we build mobile banking platforms for them which includes deliverables like a mobile application that you can use to connect to the banks. We give them USSD which is for a basic feature phone that still gives them access to the same services that a smart feature phone user would have. After the platform itself and the user interfaces, we then do the service or the product development side. We support the banks and partner with them. We can build a product and then partner with the bank to provide such a product to the masses. The product can be anything. It can be a women micro banking product, a lending product, an agricultural product, insurance, etc. On the customer side, we enable users to pull money out of their bank account into a mobile wallet and also deposit it using mobile money into their bank account. This is called B2C or C2B. We also enable bill payments for bank customers, the ability to buy airtime, etc. We bridge the gap between the banks and the customer. We offer a single pipeline with multiple solutions that we can give to the banks.

What makes you different from other providers?

When it comes to banks, they are very sensitive about multiple connections, that is exposure of their core banking systems to multiple people. There are many vendors, many providers like ourselves. A bank, because of security, cannot keep exposing itself to so many of these providers. We have interconnected with multiple providers and through that, we provide a single pipeline to the bank which is very secure. When it comes to security, we pride ourselves in that before we take a product live or even test it, there are many security conscious activities and checks and measures that have taken place which the banks have come to appreciate. They identify us as one of the key companies that pay attention to security. The third point is the versatility that Cellulant offers. The deep penetration into the various marketplaces gives the bank an opportunity to go to chains that it was not originally looking at and we can bring that to them.

Would international banks use this model?

When our CEOs were thinking of this business model, the first thing they asked was, is it relevant and what are the options? Can the banks just have someone internationally? There are nuances that you need to have done by a local provider. What are the chances that American companies will come here and connect to the local networks we have? Second is the cost element. It is very expensive to have an offshore aggregator for systems that you will be providing locally. This is USA or Europe looking into Africa. What is the feasibility in terms of market sizing? Our market is not big enough. Someone will just look at the numbers and say it is not worth the hassle.

What are your current projects for this year?

For this year, we are working very hard to fully digitize the milk value chain from “farm to glass” as well as the insurance sector. This is vital not only for the survival of the company but also to continue our relevance as a fintech in Uganda because we are doing mobile banking and payments very well. The next thing to do is to fulfill our pledge to the people to build solutions that matter.

Are you looking for partnerships or investors?

We were lucky enough to raise seed funding last year of $47 million as a group. We have access to that in terms of resourcing to help us with development and implementation. Also, because of the work we have done with various partners, we have and we continue to attract local and international partners. We have international banks that we are in talks with who are interested in funding the milk value chain with us as a partnership. Also, we are in talks with some providers of equipment, especially quality control equipment in the same industry. We would also like to attract more investment because this is a very huge industry and Cellulant Uganda is open to receiving as much investment and big partnerships as possible, both local and international.

What is your vision for the medium term? What do you want to achieve?

In Uganda, we are working towards being the best and the biggest if not the only player in marketplace digitization in Uganda, specifically in agriculture.

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