App provides access for coffee farmers in Uganda to financial services

03.11.2016 – Coffee production in Uganda is now more transparent and efficient thanks to a smartphone app. The biggest beneficiaries are the coffee farmers.

Uganda is Africa’s second largest coffee producer. Although the farming and sale of coffee is generally the only source of income, coffee farmers rarely have access to international markets. So the only way they can earn cash is to sell their coffee to intermediaries at dumping prices.

In 2013 the Uganda Coffee Farmers Alliance (UCFA) – an alliance of 54,000 small farmers – started monitoring and managing coffee deliveries using a smartphone app. The app was tailored for use in the coffee sector with the help of software manufacturer SAP as part of the programme. The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH implements the programme on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).

Introduction of the software currently benefits 13,000 UCFA farmers. It is also used by Uganda’s leading coffee exporter Ugacof and 11,000 of its affiliated farmers. Every sack of coffee is recorded on delivery by a UCFA employee using a registered smartphone; confirmation of delivery and payment is then sent to the farmer’s private phone by SMS. The app also allows cashless payments, as well as for providing access to information about the transactions. ‘This amounts to a quantum leap in terms of data accuracy. The UCFA has simplified its administration processes, yet at the same time it now analyses the data with much greater accuracy. This offers other benefits for members,’ explains Carsten Friedland, product developer at SAP. In the first harvest season alone, UCFA managed to cut its administration costs by 14%.

But the programme also has one further benefit: it provides access for small farmers to credit and therefore to investments. Until recently, most farmers were unable to supply evidence of required securities such as income and land ownership – the first banks are starting to use data recorded by the app as a form of proof of income.

Given the positive feedback with the application to date, SAP is currently working on adapting the smartphone app for use with other products and supply chains – and not just in Uganda.