Tag Archives: Uganda

HOW TO – Start a Mobile Money Business

Mobile Money (MM) is a form of electronic money service that enables phone owners send, receive and store money. The relative safety, ease of mobility and convenient nature of this service has endeared it to all sections of the society from the rich to the poor.

Before we proceed, it is important that we familiarise ourselves with some terminologies.

Agent: A person or business that is contracted to facilitate transactions for users. The most important of these are cash-in and cash-out (i.e loading and withdrawing money onto/from the MM system). They sometimes register new users, a service that earns them extra commission. As front line personnel, they also teach users how to best use the service.

mobile_money_agent

A Mobile Money agent in Kyebando, Kampala, Uganda

Aggregator: A person or business that is responsible for recruiting new MM agents. This role is sometimes combined with that of a Master Agent.

E-Money: Known as Electronic money in full. It is stored value held in the accounts of users, agents and the provider of the MM service.

Cash In: The process by which a customer credits their account with cash. This is done usually via an Agent who receives the cash and proceeds to credit the customer’s MM account.

Cash Out: The process by which a customer withdraws cash from their MM account. It is done usually by an Agent who gives the customer cash equivalent to a transfer the customer makes to the Agent’s MM line.

Float: The balance of e-money or physical cash that an agent can immediately access to meet customer demands to purchase or sell e-money.

Liquidity: The ability of an agent to meet customers’ demands to purchase (cash-in) or sell (cash-out) e-money.

MasterAgent: A person or business that purchases e-money from a Mobile Network Operator wholesale and then resells it to agents who in turn resell it to users. They usually manage the cash and e-money liquidity of their agents.

Mobile Money Transfer: A movement of value that is made from a mobile money account to another through the use of a mobile phone.

Platform: The hardware and software that enables the provision of a mobile money service.

In Uganda, the Mobile Money system works as follows;

The Mobile Network Operator (MNO) like MTN, Africell and Airtel sets up a platform that offers a service for phone owners to be able to “store and transfer” e-money using their phones.

A phone owner registers for the mobile money service with the telecommunications provider who creates the mobile money account associated with that particular registered phone number.

The customer then proceeds to cach-in onto their mobile money account by using a Mobile Money agent whom they give cash in exchange for e-money on the Mobile Money account.

This customer can through the execution of some commands send e-money to another mobile money account holder anytime they so wish. The recipient is at liberty to cash-out as and when they desire.

Just to show you how Mobile Money services have permeated our economy and become an integral part of our operations, picture the following scenarios;

  • Oloya works in Kampala and is constructing a house in the village. Every two days he is expected to pay for the services of the builders. By using MM, he is able to pay each builder directly onto their phone hence being assured of their commitment.

  • Nankabirwa is a produce dealer who has a network of buyers traversing numerous villages in Rakai, Masaka and other outlying districts. Their role is to identify produce for purchase and acquire it. By using MM, she is able to send money to these buyers of hers in the nick of time. She makes at least eight transfers daily during the peak harvesting season.

  • Pabire a rice farmer in Doho rice scheme by virtue of his mobility utilises MM transfers to pay for his workers’ services. These workers engage in activities like planting and weeding rice, land preparation, harvesting among others. This allows work to flow smoothly even in his absence.

  • Bakka leaves home for work fully knowing that there is no money for food that day. When he reaches his workplace (a washing bay), he transfers his income from washing the first three cars of the day to his wife at home using MM. Come evening, he is assured of finding food at home.

  • Sangalo is organising a wedding and she has reached out to relatives and friends to fundraise. The mode of pledge fulfillment being used is MM. Those contributing are sending their cash pledges directly onto her Mobile Money account.

  • Mugerwa, a parent at one of the boarding secondary schools is called by his son who reminds him about the study tour they are supposed to go for requiring a contribution of UGX 50,000/= per student. Instead of driving there to make payment, he simply sends th money via MM to the concerned teacher who then registers his son for the trip.

  • One can also pay for electricity, water, television and other services using Mobile Money.

So, how does one start this business as an Agent?

You need to have the following basics:

  • Two sim cards (Airtel and MTN). They are the biggest networks and handle at least 98% of the transactions. Others like Africell are still insignificant players.

  • Display Table. You need to have a display table that will not only store the tools of your trade but it can be stocked with other complementary products like mobile phones, accessories like phone jackets, screen protectors among others.

  • A dual sim card phone

  • A chair

  • Transaction books

  • Location

There are three approaches one can use to kick off. They are;

  1. Hiring a Transaction Line: This one involves hiring an already registered Mobile Money transaction line from someone or a company. With this line, you simply start off business without going through any registration hurdles. The things to note about this option include among others:

    • Paying a monthly rental fee of at least UGX 50,000/= for the MM line.

    • Income is in the form of a percentage commission earned on each transaction and is paid at the end of the month.

  1. Acquiring a Transaction Line through an Aggregator or Master Agent: Aggregators or Master Agents are companies that control specific territory on behalf of the Mobile Network Operators. Territories could include places like Kyebando, Kanyanya, Nakawa, Seeta, Bweyogerere e.t.c. These Master Agents get agency tenders through some bidding process and thereafter become responsible for licensing MM agents in their territories. For one to be licensed as an agent, you need to:

    • Present an Identity Card

    • Present a letter of introduction/recommendation from the Local Council

    • Have a deposit of UGX 80,000/= (Eighty Thousand Shillings) to purchase the kit

    • Fill in an application form

    • Have starting Float of UGX 2,000,000/= (Two Million shillings)

Income earned here is in form of commission on transactions. An additional surcharge of upto 10% (depending on the Master Agent) of your income is deducted for tax to the Uganda Revenue Authority.

  1. Direct Registration with a Mobile Network Operator (MNO): One is at liberty to register as an agent directly with an MNO like MTN or Airtel. Its requirements are more than the previous two options and they include:

    • Business Registration

    • Introduction/Recommendation letter from the Local Council

    • Functional bank account (for at least three months)

    • Filled application forms

    • An 80,000/= (Eighty Thousand Shillings) charge for the kit

    • Initial Float of UGX 2,000,000/= (Two Million Shillings) only.

Like the rest, income earned is in form of commission made on the transactions carried out. Unlike option 2 (two) above, with this form of registration, you are only charged the tax levy for Uganda Revenue Authority when your commission earnings exceed the UGX 1 Million Shillings threshold. The MNO then proceeds to deduct 4% which it channels to the tax man as opposed to the 10% deduction by Master Agents. This is definitely a better deal.

Option 1 is as instant as they get. If you want to hit the ground running, you may opt for this one. However, the margins are greatly reduced by the fact that you hire a Transaction line at a fixed monthly sum and because you are operating under another Agent, your margins are lower.

In the case of Options 2 and 3, After application and paying the UGX 80,000/= for the kit, you have to wait for two to three months prior to being approved as an agent. Once that is done, an Agent kit is availed and it consists of; three (3) phone lines, a phone handset, transaction books and other branding material like an apron.

Upon collection of this kit, you’re expected to deposit a float of UGX 2,000,000/= (two million shillings) on your Mobile Money line. Do I see you getting disheartened? True, raising this two million shillings lumpsome is a daunting task to many but there is always a way out. One trick is to borrow that money for a day, place it onto the MM line as float subject to approval and collection of your business material from the Master Agent or MNO. Once you have all that you need, proceed to cash out the borrowed money and return it to the lender.

How do you earn commission?

There is a well established commission structure clearly outlined by each MNO.

Airtel Agent’s Commission Guide (Extract)

Transaction Tiers

Cash In

Cash Out

Min

Max

500

2,500

150

100

2,501

5,000

150

125

5,001

15,000

285

450

125,001

250,000

520

1,300

1,000,001

2,000,000

4500

7,500

When a customer walks in and requests to deposit e-money onto their MM account, depending on the amount, you earn the commensurate Cash-In amount. If it is UGX 10,000/= they are depositing, then the agent will receive a cash-in of UGX 285/= on that transaction. Similarly, the Cash-Out commission applies to money withdrawals from the MM account.

Airtel does allow agents to check their commission status on a daily basis via the phone. However, the same does not seem to be true with MTN Uganda.

Success Factors for the Moble Money Agent business

  1. Trustworthiness: If you have to employ someone to operate this business on your behalf, you need to be able to trust them Anything short of that, you’re setting yourself up for failure. There are very many opportunities that these workers get to collude with crooks.

  2. Location: It is crucial to choose a location that is good. Since the commission on individual transactions looks small, the trick lies in volumes. How many transactions can you notch up a day? Ideal locations are corners of buildings or roads, boda-boda stages, busy trading centres, low cost residential suburbs, shopping arcades, taxi parks/stages among others.

    mm_corner

    A corner location like this one is very conducive for the Mobile Money business

  3. Customer Care: Many customers are ignorant about the operation of the Mobile Money services. They tend to ask questions one may consider dumb hence the need for any agent to have very good customer care skills. While researching for this article, I found agents being swamped by customers who wanted help with Sim Card verification. Imagine!!! Do not compromise on this particular issue when recruiting someone for your business.

    mm_operator

    Good customer care is dependent on the Mobile Money operator

  4. Mathematical Knowledge: The operator needs to have good mental maths skills. Customers come with all manner of requests and you need to be quick to mentally calculate and determine how much to transfer as requested. I witnessed a case where a lady came and requested the operator to cash out money from her account which has UGX 15,000/= (fifteen thousand) and ensure that it remains with only UGX 6,000/= (six thousand). He had to ensure that the transaction fees were factored in too. The operator had to first engage in some quick mental math before eventually fulfilling her request.

  5. Float Availability: How much do you have as e-money or cash? Customers keep walking in and out either cashing in or cashing out. You need to be in position to meet their needs most of the times otherwise they are likely to resort to the competition. I once had a need to cash-out UGX 300,000/=. I walked to three different MM agents in Wandegeya and none could meet my need. Out of frustration, I settled for partial cash-outs based on the float each agent had and this saw me use four different agents to meet my need. Since then, I never go to Wandegeya for MM cash-outs. Remember, if you set a reputation of always having adequate float, more customers patronise your services thereby enriching you commission-wise.

What are some of the notable challenges of this lucrative business?

  • Conmen: There are many conmen on the loose who target MM agents. Any form of sloppiness can lead to severe punishment. There was a case of a man who pulled up his sleek car infront of the agent’s display table, requested her to transfer UGX 450,000/=. She faithfully yielded as he pretended to count some money. The minute he confirmed reception of the money, he simply drove off leaving her stranded.

Most sophisticated conmen have been observed to operate from the city centre locations. So, in case you’re starting out, as you gain the experience, try to operate from the suburbs first.

  • Theft: Due to the carelessness of some agents, there cases of customers whose sole intention of patronising your service is to get to know the PIN number used to access the MM line. Most times agents type in the PIN number in full view of the customers. What the crooks then do is to later return and find a way of stealing the phone handset. Within minutes, they have withdrawn all the money and discarded the phone.

  • Cash Robbery: There are cases where an Agent has to bank the money earned. Sometimes due to late business closure, they might have to go home with the earned cash. Depending on how secretively one handles their operations, thugs tend to get wind of your earnings and simply way lay you.

  • Attention to detail: A customer once walked to an agent and requested to cash-in UGX 99,000/= (Ninety Nine thousand shillings). The agent instead punched UGX 990,000/= (Nine hundred and ninety thousand shillings). The customer paid up and left. During the evening reconciliation, she realised there was a massive shortfall and upon close scrutiny, the anomaly was discovered. It took a week of negotiations and a 100km journey to Masaka from Kampala for the money to be recovered.

  • Collusion: Some staff running the MM outlets have a tendency of conniving with other people to defraud their employer. They then feign ignorance or put the blame on mistakes.

Just to give you an idea, earnings can start from as low as UGX 50,000/= (fifty thousand shillings) per line per month with start-up Float of UGX 500,000/= (Five hundred thousand shillings) reaching an average of UGX 1,000,000/= (one million shillings) with a float of UGX 3,000,000/= (Three Million shillings).

The monthly pay for Mobile Money Operators ranges between UGX 100,000/= and UGX 150,000/=.

While offering the MM services, always consider selling complimentary products like Airtime, Flash disks, Memory cards among others. Airtime commissions can very easily supplement your income too. The current commission structure on airtime of UGX 10,000/= (ten thousand shillings) is as follows:

MNO

% Commission

MTN Uganda

4%

Airtel

5%

Africell

7%

Welcome to the Mobile Money Business.

James Wire is a Small Business and Technology Consultant based in Kampala, Uganda

Follow @wirejames on Twitter.

Email lunghabo [at] gmail [dot] com

Other Articles of Interest:

Additional information from GSMA – Mobile Money for the unbanked.

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Sim Card Verification exposes the joke that UCC has become

Only Dr. Stella Nyanzi in my view has the right vocabulary to effectively describe the Uganda Communications Commission (UCC) and its haphazard handling of issues.

Five years ago, the commission huffed and puffed about the need to register sim cards citing security as one of the key reasons it was being done.

mkts01px

Eng. Mutabazi being assisted during the launch of the registration exercise. Photo Credit – Daily Monitor, 2012

The Executive Director, Eng Godfrey Mutabazi is on record having said that, “In countries where SIM card registration has been taken seriously, a drop in crime especially cybercrime has been registered. We want to emulate this and see to it that such unlawful acts are done away with.”

 

Many of us supported the move and even used various fora to enlighten the general public about the importance of registration. The deadline set for 2013 passed and before we knew it another threat was issued to the telecoms companies to ensure that the process is completed in 2015. Interestingly, we were led to believe that the issue had been sorted once and for all.

To my shock, earlier this year, information from the Police begun pointing fingers at the use of unregistered simcards by criminal gangs. The UCC kept mum. Is it because the victims were largely lay men? It wasn’t until the investigations into the assassination of the Assistant Inspector General of Police, Mr. Felix Kaweesi (RIP) that the UCC was jolted out of its slumber.

With the kind of resources this institution commands, it is foolhardy for one to believe that they have a genuine reason for such a lapse in judgement. I strongly believe this is a sign of gross incompetence in the institution that is failing to offer the much needed direction for the ICT industry, preferring to concentrate on shutting down internet during election time as well as shopping for pornography tracking equipment. It seems like UCC is narrowing its attention to matters that involve procurement (this was actually intimated to me by a Member of Parliament) as they offer quick gains to the individuals involved there-in as well as satisfying the politburo’s demands. These two areas of engagement I presume form the basis for any contract renewal that the head of the institution is definitely interested in.

By failing to do the obvious, the Eng Mutabazi led outfit has slowed down the pace set by Mr. Patrick Masambu the former Executive Director of UCC who is currently the Director General of the International Telecommunications Satellite Organisation (ITSO). Despite the massive hurdles he went through to set up this institution, Mr Masambu defied all odds to leave a healthy and globally acclaimed institution in place.

The latest gaffe has been the press release by UCC that orders Telecommunication service providers to verify all SIM card subscriber details within seven (7) days starting 12th April 2017. The communique advises the public to visit the nearest authorised telecoms service centres as well as utilising the *197#.

I can only shake my head in disbelief because whoever came up with this decision at UCC is out of touch with reality. Do they think that they are managing a home? Do they realistically expect even 50% of the Ugandans to get sorted within one week? Which world are these !#%&^396$#@ living in? (Dr. Nyanzi the queen of metaphors please come to my rescue here)

Now to Eng Mutabazi and your team, do you really believe that:

  • All Ugandans are within 7 days reach of a recognised Telecoms Service Centre?

  • All Ugandans will have got the information to pursue this activity within 7 days?

  • All Ugandans will have the money and time to make it to the various centres within 7 days?

  • All Ugandans have National IDs?

  • All Ugandans are utilising their cell numbers within the boundaries of this country?

  • All Ugandans have time to repeatedly go to Telecoms service centres in a bid to repeat activities they had already engaged in?

Take the example of this guy

kaabong

Meanwhile, like you can see, he at least might be able to afford the entire exercise financially. What happens to the many that cant afford it and also reside where he is currently working? [Pointing my index finger onto my bald head saying “COMMON SENSE IS NOT COMMON”]

Meanwhile of the seven (7) days given, four of them are taken up by the Easter Holidays. For a country that is over 70% Christian, why do you think they will leave their celebrations to attend to an exercise that was caused by your incompetence?

When will you get out of this gambling nature that seems to have become a part of your operational manual? I do believe that UCC as an institution has some very brilliant minds, a number of whom are known to me personally but the way the institution is operating as a whole, makes any outsider think it is a bunch of jokers. This should be a wakeup call to the appointing authority, at this rate, the efforts to attain Middle Income status are likely to be sabotaged by an inefficient Communication and Technology Sector whose regulatory agency seems to be operating in a reactive rather than proactive manner.

This seven day deadline is simply a poorly thought through decision that only serves to lay bare the incompetence of the institution we are meant to look upto for guidance. Could it be time for a total purge?

Let me go pick my orange tree seedlings and plant before the rains cease. I think I have had enough of this circus.

James Wire is a Small Business and Technology Consultant based in Kampala, Uganda

Follow @wirejames on Twitter.

Email lunghabo [at] gmail [dot] com

Other Articles of Interest:

HOW TO – Start a Chapati Business

Rolex, one of the CNN recognised world famous foods is basically a Ugandan Chapati wrapped around a fried egg. Chapati is one of the most sought after snack like foods by all categories of consumers.

chapati

Chapati as it is known in Uganda

Making and selling Chapatis is one of the businesses that many find easy to set up due to the low start-up investment costs as well as high demand for the product(s). It is however important to note that while you can run it as a standalone business, it is always wise to have two or three other complementary products alongside it in order to reap maximum benefits. Some of these products are Samosas (sumbusa) and Mandazi that have similar requirements for inputs. What is shared here can be similarly applied to other products like doughnuts.

What infrastructure do you need to effectively run a Chapati business?

  • Operating Table. Notice the concealed compartment. It is a pre-requisite when selling food products by the roadside in Kampala.

    OperatingTable

    Operating Table for a Chapati business

  • Charcoal Stove

    CharcoalStove

  • Saucepans (At least two big ones)

Saucepan

  • Frying pan (For preparing the chapati)

FryingPan

  • Bench (for customers to sit on while eating)

  • Plastic plates (for customers to use when eating)

  • Jerrycans (keeping a water reservoir for customers to clean their hands or even wash your utensils)

  • Basin (for mixing dough)

Key considerations when setting up the business

This is a basic, easy to set up business. However, one need consider the following issues:

  1. Business Plan: A basic plan can suffice. It ought to answer a few questions like target market, desired sales targets, long term outlook, product mix (are you dealing in chapati alone or a mixture of products), planned operation approach among others. If you feel encumbered writing it down, at least have some of these issues answered mentally.

  2. Recipe: For those that know all about Chapati, you definitely can tell the difference between a good and bad one. This usually boils down to recipe and of course workmanship. Considering that there are many chapati sellers especially in the key trading or residential areas, having an attractive recipe will guarantee you return clients.

  3. Location: In this business, location is paramount. It is essentially a roadside business whose ultimate goal is to prey on the gullibility of people going about their usual routines. You need to make it as convenient as possible for someone to part with that loose change in order to satisfy their hunger pangs. Common locations for chapati stalls are trading places with shops, restaurants and supermarkets; residential neighbourhoods; public transport stages as well as environs of bars.

    location

    Notice the strategic roadside corner location of this chapati business

  4. Raw Materials: Other than the earlier mentioned equipment, recurrent costs go to cooking oil, Wheat flour, baking powder and any other ingredients of your choice. Most of these are readily available in supermarkets and shops. Just make sure you purchase quality and unadulterated products.

  5. Products: Chapati can be packaged in different ways to form different products. You can offer a plain chapati, Rolex or even a Kikomando (Chapati mixture with beans)

    kikomando

    Kikomando, one of the best selling products

  6. Human Resources: If you do not plan to directly run the business, then you need to hire decent people or a person that will ensure you offer a very tasty product as well as manage customers well. Do not underestimate the kind of person you choose to play this role. They are the face of your business. Structure out a motivating payment structure. As opposed to a fixed salary, a sales oriented approach towards payment is likely to be more enticing.

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Some of the factors that attract customers to your chapati stall are;

  • A nice recipe

  • Good public relations / sales language. The way your staff talk to the customers especially ladies who happen to be the biggest customers is key.

  • Smartness. Ensure that you or your staff manning the stall is smart at all times.

  • Endeavour to keep the operating area as clean and free of insects like flies.

How can one invest in the Chapati business

One can venture into this business in different ways. Some of those that I have been able to identify are:

  1. Renting Space. You might be having a shop or premises that are in a strategic location by the roadside. You can simply rent out space to anyone who is interested in setting up a chapati stall and they are in position to pay something commensurate monthly.

  2. Hiring a Location and erecting key infrastructure. As seen earlier, the operating table can take on different designs as well as abilities. Some people have specialised in identifying customer friendly locations, erecting a shelter as well as the required operating table then renting out the facilities to actual chapati sellers for a daily rate. One of those locations I know of earns the landlord UGX 50,000/= daily!!!!!

  3. Acquire all the requisite infrastructure and set up a chapati stall. This would imply running the business in its entirety. It might involve you manning the stall directly or hiring an individual that you pay.

What is the sales outlook like?

The location in which I did the research from was in a Kampala suburb called Kyebando. It is not as busy as many of the suburbs I know. However, the sales figures were quite interesting.

One packet of Wheat Flour weighs 2 Kilogammes and on average produces 20 chapatis. The highest selling stall in that area consumes not less than 24 packets daily. The arrangement used is option two where the actual chapati seller hires infrastructure from someone else. He pays a daily rate of UGX 50,000/=. Considering that each plain chapati costs UGX 500/=, this guy should be earning gross revenues of at least UGX 240,000/=. This is exclusive of extra income that comes from Rolex and Kikomando sales.

Something definitely looks quite appealing. Don’t you think so? If I were to go into this business, I would focus on eventually setting up a chain of outlets using investment model II above.

Welcome to the Chapati business. I wish you the best in your endeavours.

James Wire is a Small Business and Technology Consultant based in Kampala, Uganda

Follow @wirejames on Twitter.

Email lunghabo [at] gmail [dot] com

Other Articles of Interest:

The disregard for Data Privacy in Uganda

In the late 90s, as a Systems Administrator for Starcom, one of the pioneer Internet Service Providers in Uganda, I had the privilege of managing the Email server and in the process got to know which email accounts were used by StateHouse as well as the Kabaka of Buganda. Out of pure professional ethics, not even once did I snoop to find out what kind of communication they were undertaking. As the overall administrator of the server, I had unlimited privileges that I could have chosen to abuse at will or in exchange for a few pieces of silver. That was then.

Close to eight years ago, I got to learn about this couple. They were so much in love with one another until the entry of the other girl turned things around. Rita couldn’t stomach it any longer and quit the relationship. Meanwhile, her boyfriend had other ideas. After failing to convince her to reverse her decision, he turned to stalking her. Philip had friends who worked for the Telecom company that his ex girlfriend was subscribed to. With their help, he tracked down her phone interactions in a manner that eventually proved disastrous to her new relationship. To-date, these scenarios are still common with telecom employees willfully playing the role of Judas. I have been told that for as little as UGX 50,000/= one can get phone records for any person of interest without needing a Police or Court order.

When it comes to the banks, someone I will call Mark has had banking records involving his credit cards and other transactions given to his wife without his approval. How she accesses the information is still a mystery to him. The bank in question is a leading international bank whose professionalism you would ordinarily not put to question. He is now scared because if his wife can easily get such information, then what happens in the event that someone who has ill motives makes a move for the same?

The case of Bank connivance in the death of an Eritrean Businessman in Uganda is very telling. The Inspector General of Police came out decrying the presence of a Mafia Network in the banking system. Airtel was recently too accused of abetting number plate theft. These are matters not to be taken lightly.

There has been a fresh demand by the Uganda Communications Commission to ensure that sim card registration is adhered to. In a recent press release, the to-do list had among others a requirement that, database reconciliation/verification to be done by operators in liaison with NIRA (National Identification and Registration Authority). This has caused a lot of concern. The depth of information that NIRA has about individuals is so much and if shared carelessly with other providers whose lackluster approach to confidentiality is well known, the threat on individuals is likely to be made worse. Whereas thugs have always had only phone records to contend with, now they are likely to have residential information, next of kin thereby making it easier for them to plan kidnaps for ransom.

I have a bone to pick with UCC for the haphazard manner in which some interventions are undertaken. After huffing and puffing about sim registration and fines to Telcos that do not comply, many of us were under the impression that this matter had been settled as far back as 2015. It is a shame (a very big one) to realise that it had to take the death of a high profile individual for the same institution to bring this matter to a close. I cant shake my head enough to show my disappointment. However, that is a story for another day.

Now that private data is being aggregated with the potential for sharing it with providers in future, what should be done to ensure that we minimise its abuse?

  • Enact a Data Protection law

This is a law that prohibits the disclosure or misuse of information held on private individuals. The cases cited in this article can easily be pursued legally once the appropriate laws are in place. The Data Protection and Privacy Bill 2014 already has the desired provisions. These include;

Section 27 Unlawful obtaining and disclosure of personal data

(1) A person shall not knowingly or recklessly –

(a) obtain or disclose personal data of the information held or processed by a data controller; or

(b) procure the disclosure to another person of the information contained in personal data.

(2) A person who contravenes this section commits an offence and is liable on conviction to a fine not exceeding one hundred and twenty currency points  or imprisonment not exceeding five years or both.

Section 28 Sale of personal data

(1) A person shall not sell or offer for sale personal data of any person.

(2) A person who contravenes subsection (1) commits an offence and is liable on conviction to a fine not exceeding one hundred and twenty currency points or imprisonment not exceeding five years or both.

NB: Please note that One Currency Point is equivalent to UGX 20,000/=

  • Limit the amount of information shared with third parties

UCC should ensure that going forward, NIRA does not share all users’ information with the Telcos or any other third parties. This can be made possible through the use of software interfaces which limit the kind of access one can have to the National ID database. This is something within the means of NIRA to achieve in a short a time as one week.

Other than that, I look forward to the day when employees as well as companies whose staff are involved in illegal use of private consumer data are made accountable for their ill deeds. Many are suffering out there silently having been victims of this unprofessional conduct. Others have had to pay for it with their lives. We cannot afford to wait any longer.

James Wire is a Small Business and Technology Consultant based in Kampala, Uganda

Follow @wirejames on Twitter.

Email lunghabo [at] gmail [dot] com

Other articles of interest:

HOW TO – Start a Snacks Business

A Snack is defined as a small portion of food or drink or a light meal, especially one eaten between regular meals (Dictionary.com). Snacks are one of the top selling items in any shop or supermarket in Uganda. Everyone everywhere somehow eats a snack or two daily.

In Uganda, the common snacks are ground nuts (pea nuts), Soya, Mandazi, Chapati, Simsim, Crisps, Chips (french fries), Sumbusa, pan cakes, doughnut, popcorn, gweke (fried maize), cookies among others.

The snack business is characterised by the following;

  • Low entry barriers (can easily be started with few resources)

  • Easily run as a home business

  • Low margins

  • Requires high volume sales

  • Price sensitivity

If you have any remote interest in cooking, then this is one of the most obvious businesses to pursue. Before you start worrying about how to sell the product made, let us scan through the various issues that need to be addressed.

Key Considerations

To set up a snacks business it is crucial that one addresses the listed issues:

  1. Business Plan: Have one, however basic. This plan should be able to guide you on what you plan to produce, how you plan to sell it, anticipated trading volumes, an overview of your operating expenses, targeted sales price among others.

  2. Recipe: Come up with a recipe for the snacks you want to produce. This is very important since you are entering a market that is likely already flooded with similar snacks. It helps if you find a key differentiator. An example, if you chose to go into the Fried Mukene Snacks business today, the edge would be in adding some spices to your recipe that will attract customers to your product.

  3. Raw Materials: You definitely need to acquire raw material which will be processed to form the snacks. This raw material is key in your value chain. Ensure that you set up a steady supply of the raw material to avoid breakdowns in your production cycle. Nothing hurts customers like getting accustomed to your product and then they all of a sudden have to bear with its absence from the market for a week or so. No amount of excuses will win all of them back. You will essentially have gifted them to the competition. If you can stock the raw material to avert such instances, do so.

  4. Production Equipment: You’re going to have to acquire equipment necessary for the production of these snacks. Depending on the snacks in question, the equipment can be as basic as they get. Look around in your local market, talk to people already in similar business to find out where they source their equipment from or at worst, visit the upscale supermarkets and shops that deal in the high end equipment. Your pocket and planned target market is key in determining what kind of equipment you settle for.

    IMG_9700

    Plastic packaging can be sealed with either the electric sealer, flat iron or candle.

  5. Production Location: Where do you plan to make the snacks from? This is dependent on multiple factors among which is your target market, resource availability, production expectations, type of snacks etc. There are snacks that need to be consumed within a short timeframe after production for the best customer experience like chips, rolex (chapati & egg), sumbusa or fried fish. You also have snacks that can be kept for a while and even packed like mandazi, cookies, roasted groundnuts and gweke. The longer lasting snacks can always be processed from any location, packed well and sold in entirely different locations while for the quick to eat snacks, you need to position your production facility near the customer.

  6. Packaging: This has to do with the way you present your product to the customer. You could choose to go it anyway you want but first assess and see how others are doing it. If you’re going to use supermarkets and shops to retail your products, you need to have decent attractive packaging in place.

    IMG_9697

    Compare the two packagings. Which one gives better appeal?

    If you plan to sell by the roadside, then all you need might be old newspapers in which to wrap the snacks. Align your packaging with the target market so that you avoid over or under investing in it. This has a direct impact on your sales performance.

  7. Branding: This is the practice of creating a unique name and image for a product in the consumer’s mind. As you set out to sell your snacks, you need to create an identity for them or else they will get lost in the multitudes of products out there. A customer should be able to know that they are buying your product and not any other. Near my home, there is a Chapati seller who branded his stall as Budaka Boys. As a result, it is very convenient for me to send my 8 year old to buy his chapati. Do not undermine your days of small beginnings. Most big name product brands started small. Work on the branding as you go along with the business since it is likely to significantly complement your other efforts. I have developed three household product brands from first principles today and hence know what it means.

  8. Sales Strategy: By now you should be having an idea about how you plan to sell your product. There are numerous ways snacks are sold and some of them include; roadside sales, door to door hawking, office to office hawking, supplying shops or supermarkets, online (whatsapp, facebook etc) among others. Your choice should be determined by the target market you have in mind, cost of product, packaging and capital investment at your disposal.

  9. Human Resources: Do you need to hire workers? Can you do this work on your own (at least for starters)? Are you able to pay the workers? Do you need workers in the production or sales and marketing areas? Ask yourself leading questions before you make a decision. Alternatively, even when you need workers, maybe starting with family labour could be a better strategy. It’s worth learning from the Indians here.

  10. Money: The snack business in its most basic form does not require lots of money to start. With UGShs 100,000/= (Approx US$ 30) one can kickstart this business. However, as stated earlier, being a low margin business, you will need to target volume sales before making sensible returns. This implies re-investing your proceeds religiously at least for the first six months in order to grow the business operations.

This may not be an exhaustive guide but should give you a good idea of the landscape you should expect to find going into the snacks business. Feel free to contact me for more detailed input.

James Wire is a Small Business and Technology Consultant based in Kampala, Uganda

Follow @wirejames on Twitter.

Email lunghabo [at] gmail [dot] com

Other Articles of Interest:

HOW TO – Start a Supermarket

A Supermarket is a large self-service shop selling foods and household goods, according to the English Oxford Living Dictionary. In Uganda, you might want to avoid sticking to that definition by erasing the term large.

We have supermarkets that cover over 5000 Sq. Metres while those in most residential neighborhoods are as small as 20 Sq. Metres. It’s important that we have a similar appreciation of what a supermarket means in the Ugandan context before going ahead with this article.

One of the businesses Ugandans have given attention in the last ten years is the Supermarket business. As a supplier of products to supermarkets, I have an eye for locating the new ones considering that the wider I cast my net, the more sales I make.

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A typical neighborhood supermarket in Kampala, Uganda

From my observation, this is one of the easiest businesses to set up and yet potentially challenging to run. You could choose to directly manage its operations or hire a team to do so. The former option is likely to reduce on the operational headaches by far.

What do you have to consider when setting one up?

  1. Location: The biggest success factor for this business is location. Where you put your supermarket will clearly determine not only the category of clients you attract but also their numbers and frequency of shopping. A supermarket located by the roadside with little or no parking slots for cars had better be near a busy public transport stage. You could also locate it in an affluent suburb or on the road leading to such a suburb from a busy work area of the town. However, in this case, having good parking is a big advantage considering the likely transport mode for most of the middle class families. One of the best locations also is residential areas. Setting up one within an estate or its environs offers a much bigger market guarantee especially if the estate is big in size.

  2. Ground Floor: Wherever the location you settle for, always insist on having the supermarket on the ground floor. Anything short of that will lead you to failure right from the word go. Most Ugandans are not into the habit of climbing stairs just to get stuff done. It is the reason you find most of the storeyed buildings in the city having tenants occupying only the first three floors with the rest being empty. Suppliers also have an easy time when delivering products since having to lift them to higher levels might involve much more labour and time.

  3. Parking: Availability of parking for cars is crucial if you want to reach out to an affluent or mixed client base. Depending on your location, you might want to insist on having parking space near or at the front of the supermarket.

  4. Branding: This can be a complex matter but in the most basic way, simply ensure that you come up with an appealing name and graphics for the business. This process needs to put into consideration your likely target customers and long term plan for the business.

  5. Fittings: Get your internal fittings right. The shelves, cold storage facilities, tables, security among others. The extent of these fittings is determined by the spread of services and products you intend to provide. A basic no frills supermarket intent on merely retailing basic household goods would focus on shelves, a cashier’s table and one or two fridges.

  6. Supply Chain: Supermarkets need suppliers in order to serve their customers. Supplier X brings her baked Cakes, the supermarket displays them on the shelves and customers buy. After sale, the supermarket notifies the supplier to restock as well as receive payment for the previous consignment. The beauty with this is that as you set up the supermarket, suppliers start flocking the venue asking to be registered. So, it is among the easiest to handle.

  7. Human Resource: You need people to run the supermarket. Even when you choose to manage it directly, depending on your scale of operation, there is always that need for a few extra hands to help in:

    • Attending to customers

    • Receiving products from suppliers

    • Security

    • Cleaning the supermarket

    • Managing books of accounts, e.t.c.

  1. License: Get a trading license from the local authorities. This trading license is paid for annually and has to be factored in as one of the recurrent costs.

  2. Business Registration: With things getting tighter in Uganda today, you can hardly open up such a business without having some form of registration. Identify whether you want to register a Private Limited Company, Sole Proprietorship, Partnership or any other mode. This is a pre-requisite in order to get a Tax Identification Number from the Uganda Revenue Authority.

  3. Business Plan: Try to have some form of written business plan. I know, when I talk about this, you’re probably imagining a one hundred page document filled with all sorts of academic brouhaha!!! No. A business plan can be as simple as a three page document listing the key issues and how you plan to deal with or achieve them. In the case of a supermarket, one of the issues you need to address is the products and their pricing.

    • What mark-up do you place on your products and how does the eventual price affect the ability of your target market to purchase?

    • What type of products do you stock? You have no need stocking electronics like Televisions in a supermarket located in a housing estate. That shelf space is better used stocking washing detergents.

    • What product sizes or packaging do you opt for? Detergents like Ariel or Omo are on high demand and purchased by most households. However, the purchase quantities vary from one market segment to another. The affluent moneyed class prefers to buy the One Kilogram or even Five Kilogram packs while the low income households prefer to buy the smaller 100 gram packs. Study your market and stock the right product sizes.

  1. Return Policy: Set a clear policy on product returns. Often times supplied products get expired, damaged or might be defective right from the factory. As a supermarket, you do not have to bear that as a loss, it should be clear to the suppliers that they replace any products that cannot be sold to customers for one reason or another.

  2. Supplier Payments: Most suppliers offer credit to supermarkets save for a very few like Milk and bread suppliers who tend to collect their money upon delivery. However, for those that extend credit, it’s crucial that you have a very organised system of managing them. Some supermarkets settle outstanding invoices every two weeks, thirty days or even forty five days. Others clear each pending invoice upon product depletion on the shelf. Setting up a predictable payment system for the suppliers not only endears you to them but also ensures that you manage your cashflow better. This particular point is the reason Uchumi Supermarket closed operations in Uganda and Nakumatt Supermarket too is currently struggling to remain in business.

  3. Point of Sale System: This is an electronic system used to record transactions at the point of payment in a shop or supermarket. It could be crucial or not depending on your scale of operation. If it’s a small Mom & Pop neighbourhood supermarket that you directly manage, you may start without it. However, for a business you aren’t actively managing, this system will help you so much as it allows you to make daily audits of sales by recording all transactions.

  4. Theft: For as long as you get into this business, expect this to be a sticking issue. Globally, supermarkets put a 3% mark-up on their product pricing to cater for just this. While you can employ technology and other means to reduce its prevalence, theft will always occur. How does it happen?

    • Walk-in customers. There is always an army of people who have made it their livelihood to steal products from supermarket shelves and find their way out without paying. This is one of the reasons you need an extra hand to run the supermarket. They can keep watch over such activities. However, what happens if they collude?

    • Crooked Suppliers. There are cases of suppliers who deliver less than what has been indicated on the invoice. It implies that you pay them for goods that were never supplied in the first case. Matters are made worse when they collude with your staff to make these false declarations.

    • Staff. Internal supermarket staff could also be a source of illicit product loss. They tend to take advantage of the trust bestowed upon them to engage in theft. In bigger supermarkets, they are known to form networks that ensure the untraceability of their illegal activities. The closed Uchumi Supermarket was a glaring example that suffered from internal staff theft.

  1. Money: Finally, have money. While I cannot give you financial estimates, by perusing through the list of issues presented so far, you can get a good idea of what to prioritise and hence determine how much you need to set up the business. The best thing about it all is the fact that product stocking which tends to cost a lot is largely on credit hence reducing the overall initial financial burden.

I hope you are now ready to start that supermarket business. Do not waste any more time. Get at it right away.

James Wire is a Small Business and Technology Consultant based in Kampala, Uganda

Follow @wirejames on Twitter

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President Museveni, avoid Knee Jerk reactions on Installing Security Cameras

The death of Afande Felix Kaweesi (RIP) took us all by surprise and matters were worsened by the brutal and professionally executed hit. In the aftermath of this occurrence, President Yoweri Museveni was quoted by various media houses as having stated that installation of cameras along public roads should be done as soon as possible.

In the run up to the 20th Common Wealth Head of Governments’ Meeting (CHOGM) held in Kampala, Uganda in 2007, installation of security cameras was on the To Do list. One of the reasons given was that they would continue providing surveillance long after the event. Apart from seeing remnants of poles and housing units for cameras, that project died as fast as it was birthed. Money was spent procuring these cameras, installation was probably done but that is as far as things went.

Mr President, before you embark on another spending spree to procure new cameras, I have a humble appeal. Please do not follow the knee jerk reaction on this matter. Many of your people may be looking at this need merely as a procurement opportunity without internalising its overarching importance towards facilitating crime management in the city of Kampala.

As steps are taken towards implementing your directive, it is crucial that certain things are kept in mind. These include;

  • Needs Assessment and Budgeting – Apart from equipment costs, time and labour required can also be intensive. Product quality is also key as opting for low cost products without considering their abilities could lead to challenges like low quality images hence creating challenges during evidence collection, poor visibility at night or during the rain among others.

  • Planning for Infrastructure, Maintenance and other recurrent costs – In Uganda, we have a tendency to believe that initial costs are all that matters when acquiring technology. Plan ahead for costs of maintaining infrastructure eg Wireless connections to the data centre may require servicing, obstructions could occur near the cameras and have to be removed, cameras may have to be replaced and even outright vandalism of some cameras could occur. In cases of non networked cameras, there might be a need for a team of people to physically collect data from them periodically among other activities. This is where probably the CHOGM camera project went wrong.

  • Technology Integration – Our security forces already have different technologies in use. The Police for example has license plate recognition software which is used a lot to get ticket defaulters. The camera system installed should be able to integrate this and other technologies including facial recognition, gunshot detection, incident mapping, video analytic among others. That way, we shall avoid having silos of technologies that are not interoperable, a waste of tax payers money.

  • Policy Development – There needs to be policies in place to manage this surveillance. It is crucial to achieve a balance between protecting citizens’ privacy rights and enabling law enforcement officers utilise the technology in an effective manner.

  • Active Monitoring Vs Passive Monitoring – Active monitoring is real time monitoring where locations are observed continuously while passive is the opposite. The former approach is a lot more resource intensive but allows the security agencies achieve much more especially when it comes to preventing crime. However, does Uganda’s force have the capacity to actively monitor a widespread camera system covering the entire Kampala city? Maybe a mix of Active and Passive would work best. Certain areas considered hot spots could be monitored actively while for those that are less dangerous, a passive approach can be undertaken. This decision will also inform on the type of technology to be deployed where.

  • Integrating Camera systems with current practices – There are procedures and practices that the security systems are utilising to monitor and manage crime. These do not have to work in isolation with the Camera systems. Could there be a need to mount cameras on all Police Patrol cars for example? In danger spots, can patrol teams be deployed in areas where the camera coverage is poor or where they expect criminals to seek refuge from the cameras?

  • Cameras are not a replacement to normal security duties – It is important to ensure that there is no sloppiness that develops on the part of the security officials as a result of camera installations. The old school physical engagements of investigating, tracking and preventing crime still apply. These cameras should be viewed as the icing on the cake. Footage can be used to corroborate information, identify culprits and witnesses to be interviewed among others.

Any eventual decision on the kind of Cameras to use should not restrict itself to a particular model of cameras but instead opt for a variety of camera models with different abilities. There will however be a need to get assurances from the vendors about their interoperability with other vendors’ equipment.

Technologies that need to be integrated in the procured system should include among others;

Gunshot Detection Systems: They work by utilising a system of sound sensors installed all over the target area. By scanning sounds in the area, these sensors are able to decode whether it is from a gun or not and through a triangulation approach offer an approximate location where the shot was fired from. Integrate this with crime mapping software and you will easily know theneighborhood in question.

License Plate Recognition: This scans number plates of cars and can verify with any database to determine whether the car in question has uncleared tickets, has been reported stolen or any other issue as brought to the attention of the authorities.

Facial Recognition: Advances in technology now allow computer software to be able to match faces when compared with database entries. By integrating this software with the cameras, one should be able to quickly track offenders especially the repeat offenders.

There is a lot more to share on this but it is my hope that this time round, the Government of Uganda manages this project the right way in order to achieve its intended goals without financially haemorrhaging the public coffers.

For God and My Country !!!!

James Wire is a Small Business and Technology Consultant based in Kampala, Uganda

Follow @wirejames on Twitter

Other Articles of interest:

Additional material from Using Public Surveillance Systems for Crime Control and Prevention by Nancy G LaVigne, Samantha S Lowry and others.

HOW TO – Start a Home Business

The signs of a struggling economy are allover us. Everywhere you turn, businesses are closing and the new ones that open can hardly last six months. The spending power of Ugandans has greatly reduced thereby affecting many an entrepreneur.

When you take a walk through most of the shopping centres and office buildings in Kampala today, you’re likely to find many closed shops and business premises. The spiralling rent charges under a climate of reduced business are leading many to abandon city operations or if not business altogether.

Despite these grim signs, we Ugandans are known for our entrepreneurial spirit. We always want to have something on the side. Recently, while having lunch with a friend that had just been registered by the Architects body, the first thing he told me was, “I want to register my own Architectural firm now.”

I however want to share with you the idea of doing business from your home. This is a concept many are not aware about or feel inclined not to embrace due to various perceptions. However, if you really want to continue being an entrepreneur under these tough economic times, you need to seriously consider starting a Home Business.

As I understand it, a home business is one that you operate from the confines of your residence. It involves producing your products or offering your services from the confines of your residence only going out to either prospect for customers, deliver a service or make deliveries in the case of products. As someone that has dabbled in home business for eight years now, I can say that it’s worth the inconvenience.

Some of the benefits of a home business include;

  • Lower Business Start-up costs: By operating from your residence, there are a number of shared costs that you can share with the pre-existing dispensation. Electricity, Rent, Water can all be initially utilised from the home bills.

  • Ease of working: For those that are trying to earn an extra buck outside their official jobs, working from home during the evenings and weekends can help them grow their dreams in business.

  • Flexibility: Home business saves you the daily routine morning and evening traffic jams that you mandatorily go through in order to head to a remote work place. This implies that you can start work at convenient times without a hussle. Working mothers would appreciate this more than the men because they usually have to divide their attention between work and the children.

  • Business Validation: By operating from home and avoiding certain overheads, you are able to get time to not only understand the business better but also verify its potential for success. I covered more on this in this article.

How do you go about starting a Home Business?

Passion: First and foremost, identify where your passion lies. Due to the kind of inconvenience a home business is likely to have on your personal life and space, it had better be something you are so passionate about and do not mind doing any time of the day. Short of that, you might back off before maturity due to flimsy reasons not worth noting here.

Skills: Now that you know what you want to do, ensure that you have the requisite skills to see it through. These skills could be acquired by you or hired. I do all my home business with my family. We do not hire external labour at all. However, there might be cases where you need to hire external skills sets. Ensure that you plan well on how to embrace external people in your residence.

Minimum Viable Product/Service: Assess the opportunity you want to pursue and establish what is required at a bare minimum for you to offer a service or product on the market. Even when the product/service is not what you eventually envisage it to be, focus more on getting into the market and letting the market shape your eventual decisions on the product or service. I do package products for supply to supermarkets. Initially we started by packing only 100 gram products, however, due to customers’ demands, we now added packs of 250 and 500 grams.

Market Access: Getting to the market is another crucial consideration while working from home. You need to study your target market and establish the most convenient and cost effective modes of accessing them. Supermarkets are one good avenue for products. I also know of a young man who sells second hand clothes from home. He reaches out to most of his clients on phone and through hawking visits to recreation centres in the evening hours as well as over the weekends. This guarantees him regular sales.

Working Space: Remember you’re operating from your home. For some, you might be having an empty room somewhere that you can put to use. In other cases, this free space is not there and you just have to create the space. I begun the home business while renting a house, so, space was an issue. What I opted for was to have a portion of the sitting room turn into a production area for a limited time and upon completion, it reverted to its original setting. If you came home while we were producing our products, you would think it was a 24 hour factory.

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My then 5 year old son helping with the product display at a tradeshow

Cooperation: For the married or if you’re sharing a residence, you need to win the cooperation of your family members. Do not force some of these activities upon them as they are likely to get very negative about the entire project, eventually working against you to its detriment.

Do I hear you asking, what kind of business you can do from home?

In a series of articles titled Business You can start with less than 100,000/=, I covered a number of possible business opportunities. Reading through will give you a good idea of what to try out.

However, Snacks, Mushroom growing, Decoration, Online Work like Transcription, Software Development among others are some of the easy to start home businesses.

Off you go. Get started and feel free to share your experiences.

James Wire is a Small Business and Technology Consultant based in Kampala, Uganda

Follow @wirejames on Twitter

Other Articles of Interest:

He Died!! Where did his Mobile Money go?

On his way home from work, he hired a bodaboda to help him swiftly navigate the traffic jam only to get involved in a nasty accident that saw him lose his life. Charlie (name not real), was an ambitious young man who was out to curve a better world for himself. In his business, he used a lot of Mobile Money (MM) transactions since they offered a lot of flexibility and security. When he died, no one knew about the financial status of his MM account nor his pin code. Not even his wife!!!

Such scenarios are common in Uganda. People die, lose phones with their simcards or travel out of the country only to return years later and the Mobile Money is no longer available.

Where does this Mobile Money go? This is the key question.

It is typical of the telecom companies in Uganda to reassign phone numbers that have not been in use for a while. This re-assignment is done in such a manner that any Mobile Money that was on that account gets erased too. I have a sim card from Airtel and once, due to a long period of inactivity, it was deactivated. Before the deactivation, I had deposited UGX 20,000/= on the Moble Money. Upon reactivation, when I inquired about the MM, all I was told was that I had to register afresh. No explanation was given for the absence of my MM previously deposited.

Imagine a telecom deactivating at least 300 sim cards per day. Of those, let’s say 50% have Mobile Money leftovers that average out to UGX 20,000/= on their individual accounts. This gives a total of UGX 3,000,000/= (Three Million) daily being taken over by the Telecoms company. In a month, this works out to UGX 90,000,000/= (Ninety Million) and a year, that adds up to a conservative estimate of UGX 1,080,000,000/= (One billion, eighty million).

This may not look like much money to the telecom company but a quick analysis reveals that it can pay the annual salaries of at least ten middle level managers with each earning in the region of Eight to Nine Million shillings. This same amount can be used to pay up for the lease on the cars used by the telecom.

While appearing as a small loss on the part of the customer, this money when aggregated becomes massive and this is where the telecom companies benefit unscrupulously.

In another scenario, someone deposits UGX 1,000,000/= (One Million) onto the MM account and does not use it for a period of two weeks. The telecom company earns interest off that money but the customer is only entitled to the principal amount deposited. This is another ugly scar rearing its head in the MM field. Every day, you have Billions of Shillings deposited onto the Mobile Money systems and they earn a hefty sum for the Telecoms companies even if they remain unused for a mere few days. Is it fair that the status-quo continues? Isn’t it time the consumer was given their due?

Well, some telecoms have come up with a spinoff savings scheme using MM but that is like dragging wool over our eyes as clients. Whether I enroll for the savings scheme or not, for as long as I have my Mobile Money on the phone, it is prudent that any interest earned by the telco be passed on to me too (at least a fraction).

Currently there is no serious modality when it comes to regulation of Mobile Money. Like loan sharks, the players set their rules and determine how the game is played. Apart from the requirement by the Central Bank for the Telcos to have bank accounts that backup the electronic money with actual cash reserves, there is nothing more. When MTN suffered an internal MM fraud setback some years back, it was a result of system manipulation that led to issuing of more electronic money than the actual bank reserves had.

In this era as we transition from paper to digital money, it is prudent that the Bank of Uganda wakes up to its responsibility. They need to move swiftly with the times, work with the Uganda Communications Commission and any other parties to ensure that we have a fair and forward looking environment that will see a greater adoption of MM.

Digital Money is a reality we are faced with and have to ready ourselves to embrace it fully.

James Wire is a Small Business and Technology Consultant based in Kampala, Uganda

Follow @wirejames on Twitter

I’ve been Retired. How do I invest my money?

“Dear James, I have been working with a known brand name in Uganda for many years. Recently, I was retired under mutual consent and given a severance package. However, I do not know exactly what to do in order to ensure that my money does not fade away. I still have a young family and need to continue earning somehow. Please help!!”

The tone of the email vividly showed me that Gusaga (name not real) was crying out for help. As opposed to most cries I get of people who lack money, this time round, he has the money but is scared about losing it all.

You too are probably having a time of your life in that job guaranteeing you certain basics as well as promising you much more in future. However, one fate that awaits you for sure is retirement. One day, as sure as night follows day, you will be sent packing. What do you do when that time comes?

Gusaga is an accomplished professional who has put in a great effort in his career and is now at crossroads. Faced with the scenario of a lifestyle change from the 8am to 5pm job routine, the frequent meetings and travel, the corporate hobnobbing that has seen him mingle with the crème de la crème, the feeling of power and importance managing a team, company supported holidays to exotic destinations for his entire family, guaranteed education for his children in elite international schools among others, he begins to wonder what lies ahead. However, in this article, we shall stick to his concern, the money. How can he keep it and ensure that it multiplies?

First and foremost, for the money to multiply, Gusaga needs to seriously consider becoming an investor of sorts. It is only by sowing that money in various opportunities that he will realise the growth he yearns for.

He needs to establish his personality for starters. Is he a risk taker or risk averse? Investment ventures are driven by that foundation in individuals. In most instances, carefully thought out but risky ventures tend to pay significantly more than their non risky alternatives. Money lending is one of those slippery businesses where you swing to either extremes, from a good kill to a total loss. With a personality portfolio in place, he can then start considering opportunities accordingly.

In Uganda, some of the safe investment opportunities are;

Fixed Deposit: This is a financial instrument provided by banks which gives investors a higher rate of interest than a regular savings account, until the given maturity date. You might have UGX 10,000,000/= (Ten Million) and choose to fix it in a bank for a year at an interest rate of 10%. This will guarantee you UGX 11,000,000/= (Eleven Million) by the end of the transaction period. You get to make a profit above the average rate offered for savings accounts. This kind of opportunity is good if you are in a situation where you do not have a clear plan of action for the money you’ve acquired. The time it spends away from you should allow for a more sober assessment of opportunities.

Company Stock: Uganda has a vibrant stock exchange called the Uganda Securities Exchange (USE). It is basically a market area where investors can buy and sell shares of companies. You might be a great admirer of a leading business brand that happens to have listed on the Stock Exchange. Your dream of part ownership can easily be realised through this market. Two benefits for holding company stock are; first, as a part owner of the company whose shares you bought, you are entitled to a share of the profits which come in the form of dividends. Secondly, your share value is also likely to increase in financial value over time. A share you probably bought for UGX 500/= might go for UGX 750/= within a year or two. However, some care is needed when choosing the companies to invest in as the possibility of losses also exists.

Government Securities: It is normal procedure for the Government of Uganda to borrow money from the public (Public Debt) in order to fund its activities. This is done through the issuance of Treasury Bills and Bonds. What about them?

Treasury Bills are issued when Government is borrowing money for the short term i.e. not lasting more than one year. They are issued for periods of 91, 182 and 364 days.

Treasury Bonds are issued when Government is borrowing money for the long term i.e over one year. They are issued for periods of 2, 5, 10 or 15 years.

Depending on the targets you have, you can settle for the most appropriate security. By offering a predictable interest payment, these securities are risk free and hence very ideal for the risk averse. The Bank of Uganda is responsible for issuing these securities on behalf of the Government.

Other investment options do however exist especially if you are ready for the risk involved. You can consider either starting up from scratch or buying equity in an existing concern. Some business opportunities commonly pursued in Uganda include;

Real Estate: This entails property, which consists of land and the buildings on it. You can opt to invest some of your benefits in purchasing of land and selling it off after a while for a profit.

Alternatively, construct rental structures on the purchased land. This requires studying the location where the land is situated in order to put the appropriate structure that will easily win over customers. Many make the mistake of setting up large bungalows targeting high end tenants who are very limited as opposed to small apartments or units (trains) that target the medium and low end market that is much more readily available. When completed, rentals guarantee you a steady flow of cash on a monthly basis. While at it, do not forget that Uganda Revenue Authority has begun taxing landlords.

Consulting: You have worked for a good number of years and have a skill that has been perfected over this period of time. This is your chance to get into the consulting arena and sell your skillset as a speciality. Take the example of someone who has been handling tax matters for a company and got to know the intricacies involved, why shouldn’t they consider becoming a Tax Consultant upon being retired? Now that you do not have an employer expecting to take up your time from 8am to 5pm daily, you can partition that time among many smaller customers whose aggregate pay leaves you smiling your way to the bank.

Building a client base is usually the challenge here. However, if marketing is your problem, then consider joining an existing consulting firm as a partner.

Farming: Yeah right!!!! I know this is the buzzword for the average corporate in Uganda lately. No talk of achievements is complete without one saying, “I built a house and have a farm!” The rapid urbanisation coupled by an ever increasing demand for food is a great sign about the future of farming. This profession requires love, patience and honesty with yourself. Many have jumped into it and come out crying foul. As the owner, you need to be ready to love the farming activities and thereafter be active (telephone farming has messed up many due to the unprofessional conduct of most farm hands). Patience is also key because while a crop my fail you in one season, you could very easily register a bumper harvest in the subsequent season.

However, it is also worth noting that some enterprising people have come up with a cooperative approach to farming where you contribute money to a pool and this pool is utilised by someone to actually do the farming (e.g. chicken rearing) only for them to remit an agreed upon interest at the end of the season cycle. The principal amount is again ploughed back into the next farming cycle until a time when you choose to pull out of the initiative.

Technology: The technology field has generated many business opportunities over the last decade. From hardware provision, supply and installation to software development. Many Ugandans are active in the development of applications with the aim of getting a slice of the market. It is worth considering getting into this field even when you are not technically skilled. There are a number of youths out there with brilliant ideas that lack resources to pursue them. Teaming up with them could lead to a win-win.

The biggest danger I have noticed with these youthful entrepreneur wannabes is their lack of professionalism, consistency and vision. They tend to dwell so much on the belief that they are too good and everything in the business rotates around them. So, a good understanding of how to deal with them is crucial prior to committing resources.

Tourism: Uganda over the past few years has consistently topped the charts in the tourism realm globally. At one point we are being praised for being the best destination and on another note, for being the most hospitable country among many other accolades. All these are indications of how pregnant the country is to embrace tourists. You want to be able to tap into this market before it gets saturated.

One of the key challenges for this business venture is the initial investment required. Depending on the level you want to start at, it can be significantly high.

Education: Schools are a worthy investment. If you assess the demand for decent schools in the central region alone, you’re most likely not going to hesitate setting up one. While chatting with an Ex Member of Parliament who happens to be a teacher and school owner, he told me that Primary schools are some of the easiest to set up and yet also have a very fast pay back. Since they do not need exorbitant facilities like Science Laboratories, they are a safe bet when joining this industry. I would also include Nursery schools or day care centres in this category of quick pay back.

In case you do not have prior experience in the industry, it is advisable you piggy back on existing industry experts.

Supermarket: The era of small shops has been overtaken by supermarkets. Nearly each residential area has some sort of supermarket lately. This is one easy to set up business considering that the largest investment is in renting the building, branding, setting up shelves, installing Point of Sale system and hiring staff. Products to be sold are usually got on credit from the suppliers who are then paid after sales are done.

You however need to be aware of the pitfalls that come in through product pilferage. Workers and sometimes customers tend to steal from supermarkets hence creating income shortfalls.

There are many other possible business ventures for you to attempt. Take time and do your own assessment of the environment you are in. The trick is to always look out for the problems afflicting people, there-in lies a business opportunity.

Finally, I advise you to invest in multiple opportunities, something we usually term as balancing your business portfolio. There are investments that give you returns within a month or two, others a year or two and some five to ten years. Each category of business has its merits and demerits. Since you do have a substantial sum of money, identify two to three business ventures and invest not more than 40% of your severance package. This is aimed at ensuring that incase you backfired in any of them, the loss will not send you under.

What advice do you have for Gusaga?

James Wire is a Small Business and Technology Consultant based in Kampala, Uganda

Follow @wirejames on Twitter