Why IDEO Last Mile Money invested in Opareta
How a radically transparent and responsible lending platform for agents is driving financial empowerment in Uganda and beyond
Mobile money is a booming business in Sub-Saharan Africa. In 2021, over three million active agents were responsible for $698B of transactions. Yet, many of these agents continue to rely on outdated tools: physical ledgers, Excel extracts, and informal cash loans, while conducting their mobile money transactions via USSD codes.
Opareta imagines a different future. Focused on Uganda today with ambitions to expand throughout Sub-Saharan Africa, Opareta is increasing the scale and sustainability of agent networks through a digital operating system that makes it easy for agents to manage Cash-In/Cash-Out (CICO) transactions, apply for float loans, and build a digital identity transferable to other products and platforms.
As part of the 2022 Last Mile Money Accelerator, IDEO Last Mile Money is working with Opareta to help them achieve an ambitious goal: designing a radically transparent and responsible lending experience for agents. The Opareta team believes that agents should feel informed and in control of their financial lives when taking out a loan, and exercise good judgment in how much risk to take on and when.
We wanted to share more about why we’ve decided to invest in Opareta — what makes their team and approach unique, and why we want to see them succeed. Keep reading to learn more about what Opareta is building — and why we believe in it.
A digital operating system for agents
The core Opareta product is a mobile app which agents can use to run their entire business, with transactions enabled across any USSD Mobile Network Operator. These transactions are synthesized into digital reports that highlight float position and commission earnings — an appealing, user-friendly upgrade from paper accounting.
This includes a simplified digital ledger, which eliminates the need for physical log books. By offering agents digital transaction records, Opareta can help agents better understand their business performance, reduce the rate of errors in record keeping, and simplify efforts to report and track earnings.
“Opareta keeps our transactions, you cannot miss anything. If a customer comes and complains, I go to Opareta and check — and all transactions are there — that is fantastic. I don’t write anymore because I use Opareta.” — Opareta agent
Faster access to float
In Uganda and other Sub-Saharan African countries, mobile money agents are usually freelancers or gig workers. One of the biggest factors for determining their ability to take on jobs depends on their own balance of money. How much business they can do depends on how much float — or digital inventory — they have in their own accounts. Many agents are unable to access affordable financing, and therefore must either grow their business through profits alone, restrictive overdraft facilities, or informal loans with high interest rates.
Opareta makes it easy for agents to unlock float loans with fair payment terms. When agents run out of float, they can request a loan in-app, which is processed and disbursed within two hours. This has a major impact on agents’ ability to do business across multiple platforms, such as MTN, Airtel, and more — unlocking additional opportunities to grow commissions.
Today, agents can repay loans within the app but it requires coordination from field associates. Looking ahead, Oparata is working on translating loan approvals into auto-generated contracts that can be shared in-app before disbursing loans via their web dashboard. We’re working together to design a loan experience that’s transparent and intuitive, helping agents understand the loan, interest, and fees in clear, human-friendly terms, in order to unlock increases in credit to grow their businesses.
“Sometimes, you have to wait a long time to get float. When you don’t have float, you don’t have work.” — Opareta agent
A digital identity that empowers
Underneath all of this infrastructure is Opareta’s special sauce: the development of a digital identity system for agents that will allow them to access funds and grow business across new networks.
Lacking digital identity is a key challenge for aspiring agents, which removes them from opportunities to sustainably grow their core mobile money business and expand into digital services outside of it. Despite owning the customer relationship, agents without digital identity are unable to expand into additional mobile-based business lines, forcing them to focus solely on mobile money or offer brick and mortar products (i.e. electronics or FMCG).
Opareta is building platform tools and APIs that enable transaction monitoring, agent mapping, and performance management for agent networks through a Unified Agent Identity API. With the first version complete, the Unified Agent Identity API collates various data sources to build a cohesive profile on agents, including digitized KYC (delivered in-app), mobile money transaction activity (collected in-app and stored in Opareta’s database), geospatial information, and loan repayment data. Opareta leverages this information to verify the agent’s identity and segment that agent based on the size and quality of their business, facilitating access to float loans.
“Opareta monitors me to pay back on time. It helps me earn more and get loan repayment extensions. It makes me serious with money and repaying on time.” — Opareta agent
What else?
There are lots of other things we love about Opareta. Here’s why we believe in them.
The Opareta team
The Opareta team is full of rockstars. CEO Raymond Besiga worked at Flutterwave, Head of Commercial Bernard Anguyo has built agent networks at MTN and Airtel, and Co-Founder and COO Michael Schwartz worked at Fenix, and has coached early stage startups through fundraising. We admire their commitment to building an ethical business that is truly focused on empowering their customers.
Strong product vision
Beyond facilitating float loans for Opareta’s platform, the company wants to build a digital identity for agents that other companies can embed in order to approve loans, sell financial products, and use existing agent networks as go-to-market infrastructure for ecommerce, retail, and other businesses.
They envision a future where any company that wants to build an agent network or sell a service to agents can either leverage Opareta’s APIs or plug into their agent network directly in order to immediately access tens of thousands of agents. Opareta sees itself as being an agent’s business partner — helping them build the digital identity needed to unlock further opportunities for economic growth.
Traction
Opareta is already resonating with agents in Uganda. Since January 2022, Opareta float loan disbursements have grown 9.5x, from 14K to 135K, while keeping defaults at 5%. Additionally, 85% of loan takers have requested and received a second loan.
“My float was insufficient before, but Opareta helped me out. I increased my capital, which I didn’t have before. I now have more float on MTN, Airtel, and agent banking.” — Rose M., Opareta agent
What’s next for Opareta and Last Mile Money
At IDEO Last Mile Money, we’re incredibly excited to partner with Opareta to boost the financial literacy, confidence, and empowerment of their agents. Together, we’re helping these agents understand what goes into accepting their loan application in simple and accessible ways, and also supporting them in their journey to become more creditworthy so that they can access capital and grow.
Want to support Opareta’s mission?
The team is currently hiring for product and engineering roles. Learn more about Opareta, and apply for open roles here.
