Ismail Muaweri, left, and Patrick Kisembo, of the Nalubugo Credit and Savings Group in Mpigi, Uganda, dial in to access the group’s bank account.

John Riveraby

In the Mpigi region of southwestern Uganda, village savings and lending groups conduct business much as they do elsewhere.

They meet regularly, members deposit their contributions to their savings accounts and take out small loans. At the end of the saving cycle, they also receive a payout from the collective interest and fees collected.

The only thing that’s missing? The metal cash box where the group’s funds are stored, secured by three separate locks with keys held by three different trusted community members. The multiple locks and key holders ensure transparency and security.

Going Digital

These savings and lending groups have gone digital, trading in the traditional cash box for a “digital wallet” to store their funds. Lutheran World Relief Uganda has launched a partnership with Centenary Bank, the leading Commercial Microfinance Bank in Uganda, and Airtel, the east African nation’s leading provider of telecommunications services, to create a mobile group savings solution that provides a secure, convenient, affordable and fast way for savings and lending groups to save, send and receive money. Centenary Bank hosts the groups’ accounts and provides financial literacy services to members. Airtel provides the mobile phone delivery channel.

Mobile banking provides savings and lending group members with an entry point to access formal financial and credit services because it establishes a financial history for the group.

IMG_0589“Manual record keeping means that the group’s rich transaction history is invisible to formal institutions that might be able to provide more financial services to groups, especially if they want loans for agricultural investment,” says Kenneth Barigye, LWR Uganda country director. “The idea is to build confidence with the banks so that eventually they’ll give loans to group members.”

The key to developing a mobile application for savings and lending groups is to preserve the same model of accountability and transparency the groups use with the physical cash boxes. With the digital model, one member holds the phone with the memory card that can initiate a transaction on the group’s account. Instead of key holders, there are three members who must independently enter a Personal Information Number (PIN) to complete any transaction. A completed transaction then triggers a text message, which is sent to three different group members.


Village savings and lending groups are an effective way of financially empowering communities that, because of their remote location or lack of assets, do not have easy access to formal financial services. The groups are typically composed of 15 to 25 self-selected members who meet on a regular basis to contribute savings. By saving more frequently in very small amounts, members can build their savings more easily, and this contributes to improving their assets and the security of their households. The ability to take out loans from the group enables members to make investments in their farms, or pay for other expenses that arise.

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