Mobile money cushions Uganda in the wake of COVID-19
As the novel coronavirus pandemic continues to devastate economies and livelihoods, Uganda has embraced the digitalisation of the economy. In a society traditionally run by cash, people across the country have flocked to e-commerce platforms for contactless payments and purchases. Xente Tech is one of the firms providing these essential services in a country where mobile money transactions totalled nearly $5 billion in the last quarter of 2019.
In an interview with CNN International’s Market Place programme, Xente Tech CEO Allan Rwakatungu explains the initial challenges in getting customers to convert, “Before the pandemic, we honestly had a bit of a struggle, convincing businesses, the need for them to go digital as a matter of priority. A lot of them were still getting most of their sales and still would get most of their sales from walking customers who pay cash. But now they realise that it is an emergency. They need to move now.”
As coronavirus lockdown restrictions began impacting businesses across Uganda, Xente Tech saw a huge jump in growth, with companies from every sector looking to use their platform. Rwakatungu discusses how the business model works, “Buyers go to Xente and they have access to now over 40,000 different products, everything from ad time to groceries, to fashion, to electronics, they can buy from that marketplace and they can pay instantly using mobile wallet or their bank.”
One of the companies that approached Xente Tech was medical supplier Rocket Health. Managing Director Davis Musinguzi spoke about the collaboration: “During the Covid-19 pandemic, a lot of people have been relying on ecommerce to get essential services delivered to them. Xente has tens of thousands or hundreds of thousands of users, and what we are now is making all of those healthcare services available for people on their platform. So, we've seen a 500 percent rise in the number of people that rely on telemedicine and ecommerce purchases for healthcare services."
The coronavirus crisis has provided a unique opportunity for traditional economies to pivot towards digitalisation. Companies like Xente Tech are using the situation to drive their own business while facilitating change across the economy.
Mobile money transactions totalled nearly five billion dollars in the last quarter of 2019.
