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In the last week of this year’s first term, I downloaded an app called Kawu. Using the app, I was able to send pocket money to a distant relative in her Senior Five at Budo SS. By just plugging in their card number, I got the image and other details of this relative. And in a flash, the transfer was made. This is not a testimony that is reserved for me. Plenty of other people can attest to enjoying these services.
I engaged with a parent, who declined to be named, over a phone conversation about Kawu. A single mother, she has two students at Mityana Modern Secondary School and stays in Mubende, some 103 kms away. “My child explained KAWU to me.” she kicks off our conversation. “ She told me she could save money, but I only joined when I got a call from the KAWU team. Not only do I send pocket money to my children, but I also save the school fees on the app. Every time I get money, I save it in my wallet then send it to my children and ask them to pay school fees.”
The concept of KAWU is the brainchild of Steven Kakooza, a 24-year-old Computer Science graduate from Lira University passionate about solving some of society’s greatest problems. But surprisingly, starting KAWU was not even part of his plan. He wanted to revolutionise e-commerce while at university.
At Lira University, Steven realised that his university campus was far from Lira City. This meant that they could not get most of the products and goods they needed at campus and it would cost at least shs 14,000 to move to and fro on a boda boda which was the easiest means of transport available. This opened up his entrepreneurial spirit.
“I decided to start a supermarket with a mobile money stall as an extra. It grew so fast because of the distance problem. However, I had a challenge of lack of capital, so I got some money from a few friends, but it wasn’t enough.” This is when Steven decided to pivot to tech.
He built Yammie Shoppers, an online e-commerce platform for students to buy goods from shops in Lira Town. He leveraged the boda bodas at the university stage to do deliveries. “When these boda bodas got a student from campus and took them to Lira Town, they would come back with the deliveries.” But the market was so small due to the small number of students and they were making losses off each order even 18 months in.
The Genesis of KAWU
In the process of finding more users for Yammie Shoppers, Steven built Yammie Pay, an in-house payment platform for users of Yammie Shoppers. The logic was simple. “We wanted a payment platform that parents could use to buy things from Yammie Shoppers, pay for them and we make the deliveries. This means that the parents didn’t need to spend time and money moving physically around town buying stuff, and then also taking them to the schools.”
To further their innovation, Steven and his team joined the DSkills program organized by the Inter-University Council of East Africa (IUCEA) and GiZ, a German development agency among other partners. The program was implemented by StartHub Africa, and in the initial stages of this program, they were tasked with getting user insights. “We planned to visit a bunch of schools to get key insights about Yammie Shoppers and Yammie Pay. “ But before they could do this, they talked to a friend that was helping them with deliveries on Yammie Shoppers who discouraged them from pursuing Yammie Shoppers and asked them to find a way to help with sending pocket money which was his biggest problem.
This turned out to be a pivotal moment for Steven and his team. They visited six schools in Northern Uganda and got the same reviews. Receiving pocket money was a hustle, and then, even theft was rampant because the money was kept physically. And thus the idea of Kawu was birthed.
“We wanted to give students ATM Cards, but we realized setting up MasterCard or VISA cards was a tedious and expensive process. So we had to think differently, we had to build our own. We looked at chipped cards, but this was still expensive for us. So we ended up settling for the NFC-powered cards where we added a quick response (QR) code. This worked like a charm because, with a QR code, anyone with a smartphone is a potential ATM fostering inclusivity, accessibility and ease of use at quite an affordable price.”
In two weeks, the Kawu team built an app to go with the card to complete the process. So a student would purchase the card, and they would get a card number. Then the parent would download the Kawu app, add the student’s card and they will be able to send any amount of money after topping up their Kawu Wallet in the app. The student will then withdraw the money using the card from the Kawu agents in school, usually teachers, bursars or support staff.
The Kawu team emerged as victors in the Ugandan leg of the DSkills Program in April 2022 and won $1,000 to continue building. They went on to rack up another $2,000 from the same program at the regional level beating out competitors from Rwanda, Tanzania, Burundi, Kenya and South Sudan. Since then, they have raised further grants getting $20,000 from the Science, Technology and Innovation (STI) Ministry headed by Dr Monica Musenero Masanza and a further $5,000 as the Best Youth Innovation in East Africa by the East African Science and Technology Corporation.
Since officially launching in May 2022, Kawu has amassed about 10,000 students that use their cards in over 500 schools and has transacted close to $150,000 worth of pocket money. But Steven’s vision knows no bounds. He wants to go even further.
“We want to build the first student-focused neo-bank in Africa. Historically, banks have failed to infiltrate these markets of students, so we think there is a gap that we can take advantage of. We don’t just want students receiving pocket money using the Kawu app, there are so many more financial services that we can build on top of this. Also, we want to maximize the students that use our cards, and then graduate out of high school through partnerships with different players.” Steven says bullishly.
There are also plans for regional expansion in the pipeline. “As per our research, the Ugandan market is about $195 million and 10 million students. But when you add our neighbours Kenya, Rwanda and Tanzania, the market swells to 45 million students and $1.3 billion. We have similar problems, so we can offer a similar solution even in those countries.”
But it hasn’t been smooth sailing for Steven and his team. Raising funding from investors has been a challenge. They have been trying to raise a seed round and have had multiple conversations with investors from all over Africa. “The conversations have been promising, but we are yet to lock down an investor. “Steven tells me but declines to mention how much he is raising and who the investors are.
“Also, we are building a fintech and this is a field that is highly regulated. Some regulations have been bottlenecks for us, but we understand why they are in place. You are dealing with people’s money, remember.”
However, Steven remains optimistic. “We have been able to achieve so much in our first year. We believe we can do even more in the future. I have an amazing team, and amazing advisors including the fintech guru Innocent Kawooya of HiPipo, so we should be fine in the long term. I think we will win.” he concludes with a smile.