Smallholder farmers in Uganda have for a long time gone through the pain of failure to access credit through the traditional financial systems which has denied them capital to venture into farming as a business as well as support other income generating activities. This is because smallholder farmers are un-bankable (do not have collateral and other supporting documents) to secure credit and are therefore sustained in a viscous cycle of poverty with hardly any light at the end of the tunnel.
Using the Gmobile Credit Solution, Gutsinda is supporting small holder farmers with a fund which aims at using innovative and adaptable approaches to build robust social enterprises which promote social and economic development for rural communities.
Through crowd financing, Gutsinda has established a fund to facilitate small holder farmers with credit through the VSLA groups. Gutsinda trains the groups in Financial Literacy, Group dynamics and Life skills before benefiting from the loan. All transactions are conducted through a Digital Financial Solution/platform compared to savings using the metallic cash box which is prone to fraud and theft. All groups and their members are profiled through a digitized system prior to accessing credit. Farmers receive the credit through their mobile phones and pay back via digital platform. Priority is given to women because they have been discovered to save and invest more in their households compared to men.
The funds borrowed have been used to among others purchase inputs like seeds, fertilizers, chemicals in preparation for the next cropping season.