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  • Team Asaak

Coronavirus Pivot

Updated: Feb 25

First, we are all healthy, safe, and working remotely. Second, this is impacting our business in a few ways:


On-Ground Situation The first COVID-19 case in Uganda was reported on March 22, 2020, imported from Dubai. As of April 19 there are 55 confirmed cases and 28 recoveries, according to the Ministry of Health.


Laudably, the government has taken swift and strong action. For the past week the country has been on a total lockdown, and before that was a partial lockdown. No public or private vehicles are allowed on the roads; only those carrying food, medicine, and cargo can move around. All businesses, NGOs, schools, and government offices were ordered to shut down except for clinics, pharmacies, supermarkets, traditional food markets, and restaurants (take out only). People are only allowed to walk to these places and cannot use their personal vehicles to travel. The lockdown is being strictly enforced by police.


Personally I am happy to be in Uganda, where a centralized authority is tightly enforcing the lockdown. I have confidence that the government’s early measures will contain the virus better than in other countries. In addition, Uganda’s borders are less porous than average so there is less international traffic. Uganda has dealt with Zika and Ebola in the past and has public health systems in place to detect and contain such pandemics.


Local Defence Unit (LDU) personnel deliver beans and other food to vulnerable communities in Kampala. Image: AFP/Sumy Sadurni



Lending Operations

Existing Loan Portfolio: Our boda clients were all unemployed by the ban on public and private transportation. This has been a huge economic shock for service workers in every single country, and we are not immune to it either.


Through our partnerships with Jumia and other ecommerce and logistics companies, we are finding alternate employment for our drivers. Food and cargo delivery was deemed an essential service since people are mostly confined to their homes. Our primary goal right now is to obtain employment for our drivers so they can feed their families. Our drivers have already started working with Jumia as well as Rocket Health, a service of The Medical Concierge Group (TMCG), an innovative telemedicine startup experiencing a massive increase in demand due to this situation. Rocket Health retails pharmacy medicines and products through an ecommerce platform and uses our boda drivers to deliver these essential goods on demand to residents of Kampala.


Our boda client Lwanga Bosco was recently interviewed about his experience with Asaak’s boda loan product for an NBS television special.



Our boda client Lwanga Bosco had this to say about his new job as a pharmacy delivery courier: “I am happy with my job at Rocket Health because I know exactly how much money I will earn in a week. In the boda business it is never certain how many clients I will get in a day, so it’s difficult to plan and make a budget for my family. In the future I hope to use my new savings to buy a car and start my own transport business.


New Loans: Originating new loans is paused until the lockdown lifts and we have reasonable confidence that there will not be another lockdown imminently. We plan to resume disbursing motorcycle loans when we are sure that drivers can carry passengers.


Staff/HR: The day before the government announced the first shutdown (it has come in phases), we decided to close our Uganda offices. We have shifted to working remotely, which is possible since all our operations staff have smartphones and some have laptops. The major challenge is that for cultural reasons, it is hard to close deals with new partners through pure phone interactions. We are going through introductions and referrals as much as possible to build trust, but it still takes time to make progress. Our U.S. team already works remotely so there wasn’t any major change there. They are taking all possible precautions to stay safe.


Coronavirus Silver Lining We are pivoting to adapt to this unprecedented challenge and we actually see some new opportunities:


Driver Referrals: For logistics companies, ride hailing apps, and food delivery apps, a common challenge is recruiting reliable and trustworthy drivers who will not cheat a customer or run off with a package. Those risks are especially acute during an economic downturn when crime generally goes up. Before hiring a boda driver to deliver packages, some logistics companies actually require a guarantor to sign for his employment before they hire him. This is because a boda driver can carry a laptop or $200 cash at a time, due to the prevalence of cash on delivery (COD).


Logistics companies and apps have much greater confidence in Asaak drivers than random drivers they might meet. Our drivers have documented credit history, two guarantors, a new and insured motorcycle, a tracking device in the bike, and sometimes prior experience with a ride hailing app + a smartphone. We can simply leverage our existing data (“Asaak Credit Score”) to recommend drivers for employment at logistics companies and charge both the driver and employer a recruitment fee. For the driver, a job with a logistics company brings a steady and predictable weekly income with no hassle of finding clients one by one. For the logistics company, significant recruiting time is saved and the risk of theft of food/cash drastically decreases.


In the future, we could potentially design a guarantee fee product to create recurring revenue, wherein we guarantee the driver and reimburse the logistics company in case of theft.


Currently our primary focus is simply to get employment for our drivers so they can start earning income again. Often the logistics companies are willing to garnish drivers’ wages by deducting their loan installments and remitting them directly to Asaak, which lowers our payment risk on the existing boda loans. This also saves the driver the time and transaction fees of receiving cash then remitting his loan payment to Asaak by mobile money or bank deposit.

Graphical explanation of the new Driver Referrals program.



Fuel Loans:

As clients transition from the boda business, which has instant cash payments from customers, to food delivery, which has weekly payments from logistics companies, our drivers experience a cash flow management problem of not having enough money to buy fuel for the week. This has dramatically increased the popularity of our fuel loan product which we had already been piloting and is now seeing increased usage. Instead of disbursing cash to drivers, we instead top up prepaid cards which can only be used to purchase fuel from our partner petrol stations.


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