MICROFINANCE PAPER WRAP-UP: “A Digital Bookkeeping App to Improve Access to Finance,” Published by UN Capital Development Fund

Ghana-based financial technology firm Ozé and Ecobank, a Togo-based commercial bank that operates in 35 countries, partnered beginning in 2020 to expand usage of the Ozé Business App among young entrepreneurs in rural Ghana. The Ozé mobile phone app is designed to help users track business data even if they are unfamiliar with bookkeeping. In addition, the resulting data can be used to support loan applications submitted by the users’ micro-, small and medium-sized enterprises (MSMEs).

In researching the needs of MSMEs, Ecobank and Ozé found that “digital literacy and smartphone ownership” in the Western and Ashanti Regions were lower than in the Greater Accra Region. Additionally, young entrepreneurs most often kept bookkeeping records in notebooks, and the records were often incomplete.

Before rolling out the program, Ecobank widened its network of agents in the targeted areas, and Ozé added several features to its app: (1) the integration of digital payments; (2) the ability to have sub-accounts for multiple businesses; and (3) the option of adding a separate profile through which an accountant can manage the account – particularly for those who do not have access to a smartphone. Ozé and Ecobank launched the initial pilot program in March 2021 in the Ashanti Region and expanded it to the Western Region in June 2021.

As of March 2020, 37,000 registered businesses in Ghana were using the Ozé Business App. Of this total, 35 percent were women-owned, and 61 percent were youth-owned. From the rollout of the new program in March 2021 through June 2021, Ozé onboarded 1,910 new users.

The authors deemed the progress slow. Due to low levels of digital literacy, Ozé found that in-person support staff were vital to increasing uptake and usage of the app. Once customers were using the app, however, the collected data was helpful in building the perceived creditworthiness of young MSME owners. Although the data has only been used to approve internal loans from Ecobank, the authors conclude that the model has potential to enable digital lending from other lenders to support more MSMEs.

This is a summary of a paper published by UN Capital Development Fund, November 2021, 12 pages, available at
https://www.findevgateway.org/paper/2021/11/digital-bookkeeping-app-improve-access-finance-case-study-ghana

By Zachary DeLuca, Research Associate

Additional Resources

Ozé homepage
https://www.Ozé.guru/

Ozé Business App for iOS and Android
https://www.Ozé.guru/#ourproduct

Ecobank homepage
https://ecobank.com/

UNCDF homepage
https://www.uncdf.org/

More MicroCapital wrap-ups
https://www.microcapital.org/?s=wrap

Did you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page.