Eshango

Across Africa, 1 billion people work for themselves doing whatever business activity they can to survive in the informal economy. Many of these people are non-literate, live in poverty and are often vulnerable. These entrepreneurs’ non-literacy makes keeping records of their businesses uniquely challenging; they are often reliant on the use of memory. The lack of detailed business records hinders both entrepreneurs’ ability to demonstrate the creditworthiness of their businesses and also financial service providers’ (FSP) ability to assess loan applications. 

Eshango is a business and financial management application designed with and for non-literate users. To enable them to make better financial decision and improve their access to finance. Scaled up, Eshango has the potential to improve the financial management of businesses, financial literacy and financial inclusion of non-literate entrepreneurs. Improved performance of informal businesses has massive potential in poverty reduction and more inclusive economic growth.

Due to a lack of opportunity in the formal economy, the low barriers of entry in the informal economy provide the only chance to generate much-needed income to survive for a majority of the population.

The ILO reports 85% of the population of Sub-Saharan Africa are employed within the informal economy – that’s over 1 billion people. Of these, 94% have no education.

The IMF states that the informal economy on average is responsible for 39% of countries’ GDP on the continent. Comparatively enterprises in the informal economy are only 25% as productive as formal enterprises.

One of the key reasons these entrepreneurs struggle to grow their businesses is due to a skills gap, particularly the ability to keep accurate and detailed financial records to manage their finances, and use these to improve business decision making. There is no viable solution on the market to support them.

This impacts on the ability of these businesses to access affordable credit resulting in capital constraints. Without financial records, FSPs struggle to assess loan applications and charge high-interest rates to cover their risk. The World Bank reports that 47% of informal enterprises say access to finance is their biggest obstacle.

Eshango is a business and financial management tool for non-literate entrepreneurs. It is an Android application, designed with a no-text philosophy, and uses inbuilt smartphone technology: camera; text-to-voice; and drag and drop of visual icons and imagery. The user enters all product and service purchases and sales, any loans taken and debt repayments made, and any payments into and out of savings.

We have built an innovative and intuitive numerical entry system based on the Abacus and drag and drop of icons. Users take photos of products to log transactions against products. Eshango calculates the cash in hand balance, debt balance and savings balance for the user while registering all the transactions providing detailed financial records. A review screen allows users to see the overall data on their businesses. With the permission of the user, data is uploaded to a cloud-based database.

Providing accurate cash balances and logging sales and purchases increase entrepreneurs’ financial management. A better understanding of the financial transactions of the business allows for better decision making and ultimately increased profits and income. Detailed business records can be used to support loan applications, easing constraints to accessing capital.

We serve non-literate entrepreneurs, mainly women, who are running businesses out of necessity. These entrepreneurs have received no formal education and are often excluded from the support they need to develop their businesses.

The idea was developed from the founders’ experiences working in poverty reduction in West Africa, where a constant challenge for the women involved in our projects was business and financial management. We regularly saw these entrepreneurs slowly lose money as they were unable to consider all of their expenditures when calculating profit and what to take as income. Resulting in more money being taken out than the business could sustainably support.

The development of Eshango has involved and was driven by engagement with over 200 female entrepreneurs across Guinea, Sierra Leone and Liberia. Focus groups were held to discuss how businesses are managed currently by our target group, and what they want and need to know about their business at any given point. Step-by-step user testing was conducted on our target group’s ability to use an abacus-based numerical entry system, taking photos and navigating through the app. The learning from the user testing was incorporated into a prototype app, which was tested in Liberia in Q4 2019.

We fit this challenge as we provide a technological solution to support low skilled, non-literate entrepreneurs working informally to better manage and grow their businesses and thereby create for themselves a more sustainable, higher paying job. The low barriers to entry for trading on the informal economy means it is often the last resort for people, often very poor and highly vulnerable, excluded from formal opportunities. Working in the informal economy can improve the resilience of poor households to economic shocks and recessions. Eshango fills a market gap, as no viable solutions are available for non-literate entrepreneurs for business management.

The core philosophy of our business is inclusion, to use technology to develop solutions that meet the needs of excluded and marginalised groups. We achieve this through our innovative co-development approach whereby all development decisions are made based on learning and ideas co-generated with our target group, and this is embedded in our culture as a company. Several business management solutions exist; however, Eshango is the only application to target semi and non-literate users actively. 

Our initial research into business management showed that a vast majority of entrepreneurs were familiar with management techniques of using and counting stones and leaves to keep track of money or the quantity of product. This is a similar idea to an abacus, which forms the basis of our numerical data entry system. The functions of Eshango, sales, purchases, running costs, savings and debt management were set based on our discussions with users and designed to provide them with the information they need. Our analyses showed that entrepreneurs manage money for each stock of product, rather than manage product quantity as units. As a result, Eshango doesn’t track unit quantities of product, instead allows users to enter purchases and sales against products and manage cash balances. The application uses specially designed icons and text-to-voice technology to provide visual and audio guidance throughout the app.

Eshango is a technological software solution, using the Android operating system and smartphones. We have built the app using the specifications of Android smartphones that are available and affordable in our target markets, to ensure our product is situated and usable on any device that our target user has access too. The app uses the camera, text-to-voice capabilities, dragging and dropping of icons and the processing powers of smartphones. We see the adaption of the abacus and similar ancient counting technology, as a critical piece of Eshango’s core technology, as it inspired our bespoke and revolutionary numerical entry system. We see our core technology as a blend of ancient technology, adapted and powered by the smartphone.

User testing of the second prototype carried out in Q4 2019 in Liberia with non-literate entrepreneurs showed:

• 87.5% of participants said they would use Eshango to manage their business;
• 87.5% of participants were able to use the core functions of the app, notably taking a photo and using the abacus to enter financial data;
• Eshango recorded a more accurate cash balance of the business compared to the users memory, proving that Eshango provides business management benefit to the user.
• The average time to input a sale or enter a purchase was 36 seconds. This was the most time intensive step of the functions that will need to be used multiple times a day. Observations of the participants at their places of work, showed that none had a regular flow of customers, showing that the time burden of using Eshango will not negatively affect the users business. Likewise, users are able to remember purchases until they have the ability to enter them into Eshango;

In addition, feedback workshops held with the participants highlighted some key improvements that are being incorporated into the third prototype to improve its usability.

This link shows a demo video of our second prototype:

https://vimeo.com/430336447

The principal intended long-term outcome of Eshango is increased incomes and reduced poverty for its users.

This is achieved through facilitating access to the app through partners, such as NGOs, FSPs, cooperative and association structures, that are directly working with non-literate entrepreneurs, and by supporting our target user to use the app. The direct outputs of the use of Eshango are improved business management and increased financial literacy. This, in turn, leads to a short-term outcome of better business decision-making, business growth and ultimately, higher business profits. Higher profits lead directly to Eshango’s intended long-term outcome of increased incomes of users.

In addition to this core theory of change for Eshango, the use of the app generates detailed financial records (output) that can be used to support loan applications and accessing capital for their businesses (short-term outcome), thereby increasing the user’s financial inclusion of the user to the services provided by FSPs (long-term outcome). Increased financial inclusion can further support business growth, and thereby contributes to Eshango’s long-term outcome of increased incomes of users.

We are currently in the process of developing our third prototype, our minimum viable product  (MVP) based upon testing and user feedback gained in Q4 2019. As such, we have no current users. We plan to launch the third prototype in Q3 2020 under a further pilot, to gather more evidence and proof of concept. The pilot will be completed in close collaboration of our target users, our target partners and FSPs, ensuring we build evidence that our solution meets the needs of all stakeholders. Therefore, enabling us to adapt the app and our business model to the needs of our users and planned customers.

Once the pilot has been completed, we are confident in being able to achieve a fast growth curve and reach scale. We plan on doing this through building partnerships with NGOs, associations and cooperatives in the short term and securing funding through them to achieve users and grow our user base. By working with FSP from the pilot, we will lay the foundations of diversifying our revenue stream.

Planned user number per year are:

Year 1 – Pilot 250 users

Year 2 – limited rollout, 1,000 users

By the end of year 5 – 75,000 users

Our goals within the next year are as follows:

•      Run a limited pilot of the third prototype, our intended MVP with 250 users.
•     Collect long term data on the impact of Eshango in the lives of our target users.
•     Secure funding through start-up innovation funding opportunities to support the costs of running pilots and business overhead costs.
•     Establish partnerships with NGOs to support outreach to our target users and helping users to use the app.
•  Secure donor funding through partnerships with NGOs to support outreach.
•  Support NGOs to achieve their social impact aims and improve the service they provide to non-literate entrepreneurs.
•     Start working with FSPs and to build partnerships, by involving them in the pilot to develop their confidence in our solution and to lay the foundations of a future commercial relationship.
•     Develop a Data Collection Dashboard that will support the roll-out of a data-focused business model.

These goals will lay strong foundations to achieve by year 5:

•  75,000 active users
•   30% increase in business turnover for active users
• 20% increase in incomes for active users
• 18,750 active users use their business records to access formal financial services
•  Establish three commercial contracts with FSPs
•   Diversification of business revenues, including from investment.

Within the next year we have highlighted the following barriers:

• Digital literacy of our target users means they are unable to use the app effectively
•  Limited access to smartphones by users
•  Donors reorient funding from livelihoods to health due to COVID, limiting funding opportunities for Eshango

Possible barriers by year 5:

•  Users are unwilling to agree to share the data Eshango collects
• Lack of trust on the part of FSPs and other partners in the data collected by Eshango
• FSPs are unwilling to pay Eshango for the services provided.

• Digital literacy of our target users means they are unable to use the app effectively
• Limited access to smartphones by users

Partnering with NGOs, FSPs and other development organisations, means we can access their networks to directly reach our target users. Digital literacy training can be built into user outreach, and FSPs can offer loan products to purchase smartphones.

• Donors reorient funding from livelihoods to health due to COVID, limiting funding opportunities for Eshango

Historical trends in the response to pandemics show that many donors invest heavily in economic recovery. Eshango provides support to informal businesses a common resilience strategy adopted by households, and so provides a cost-effective way to support some of those most effected by the crisis.

Year 5:

• Users are unwilling to share the data Eshango collects

Establishment of an adapted data protection policy co-designed with users to alleviate their concerns incorporating industry practises, and the adequate communication of this policy to new users to gain their consent to collect and share data.

• Lack of trust on the part of FSPs and other partners in the data collected by Eshango
• FSPs are unwilling to pay Eshango for the services provided

The planned pilots will build an evidence base to show that the data collected is accurate and viable, and develop our key value proposition. This will allow for clear communication and marketing messages.

We have a core team of four staff:

Fred Fenwick – Founder, working full time

Rob Giddings – Founder, Part time Technical and User Experience Lead

Christian K Deo – User Testing and Outreach Lead, Liberia, part time

Kayleigh Oliver, Junction 5 Studios – Programmer, part time contractor

Our team is split across two locations London and Monrovia, Liberia. We also have the support of an experience graphic designer who works as a contractor.

Our team has been working together for over two years on Eshango. Separately, the two founders have a proven track record in designing and rolling solutions to support non-literate entrepreneurs to grow their businesses and increase their incomes. They have worked for a variety of both big and small developmental organisations, building up a comprehensive skillset in organisational management.

In addition to having worked with FSPs, associations, NGOs and other institutions. Together, they have a combined eighteen years’ experience working directly with non-literate entrepreneurs across Africa. Both having lived within Eshango’s target communities.

The founders initially started working together in 2016, designing an innovative image and game-based entrepreneurship training kit targeted at non-literate women, which has proven highly successful. Eshango was created out of this experience.

The application and database are built by Junction 5 Studios, led by Kayleigh Oliver, a creative digital production studio based in London. That has supported and delivered development of mobile projects across multiple disciplines for five years. 

A majority of the user testing is delivered by Christian, a young Liberian ICT Graduate. He has successfully engaged and worked closely with entrepreneurs, facilitating workshops, running user testing, ensuring user input and advising on app development.

We currently have a partnership with:

Peace Child International (PCI), a UK based NGO working across West Africa, with a strong presence in Sierra Leone. Both founders have previously worked with PCI.

Youth Crime Watch of Liberia (YCWL), a Liberian NGO

Both organisations have been involved in the development of Eshango having funded and facilitated user testing and engagement through the concept development stage.

Our partnership with both parties is now focused on facilitating access to Eshango to the non-literate entrepreneurs who both organisations work with, for the planned pilot. Both NGOs have extensive grassroots experience supporting business growth of vulnerable entrepreneurs. Their established delivery record and presence will enable Eshango be rolled out with minimum risk and maximum efficiency in the short term.

Our embedded entrepreneur support business model is based on providing benefit to our target users, supports them to increase their incomes and will be free to access. This provides an attractive offer to NGOs and donors, who by working with us will be able to provide more effective support to their beneficiaries in business and financial management and to achieve their objectives.

Commercials partnerships with FSPs will enable Eshango and smartphones to be marketed directly to users, supporting FSPs social and business goals. One revenue channel will be to charge a referral fee to FSPs for each of their new clients who are using Eshango, as improved business management lowers FSPs risk of lending. Expanding on this Eshango can link other service providers to users and charge a referral fee.

With the permission of the users, their business records can be collected, for the development of a data-based model.

The collected data can be presented to partners, for a fee, through our planned online SaaS dashboard. This data can be used by FSPs to monitor clients and assessing loan applications; for NGO project monitoring and evaluation; or aggregated and used for research purposes. The data Eshango collects will provide detailed insights into the informal economy, that is currently not possible or cost-effective.

Over the first three years of the business, revenue streams will be mainly from grants and contracts with NGOs, donors and other developmental organisations. Over this period we will engage with FSPs and other partners to start to develop commercial partnerships. This will provide a base of funding to lay strong foundations to generate more diverse revenue streams, build up a significant base of active users needed for a data-based business model.

Over the fourth and fifth years, we aim to increase our revenue streams through commercial partnerships, based on client referrals, support in monitoring clients and providing aggregated datasets, thereby increasing and diversifying our revenue streams. Importantly, this will also reduce our dependency on donor funding.

Solve provides a unique opportunity for Eshango to gain early stage recognition, financial support and advice that will prove fundamental to our growth, and ultimately to achieving scale. The recognition of being selected will significantly support our efforts in developing partnerships for the initial roll out of Eshango. Similarly access to Solve’s network will enable new partnership possibilities to be developed. The technical support and advice available through Solve will boost the technical development of our data collection system and dashboard, and enable exploration of other technological possibilities for this system. In addition, this mentoring support, will enable the consideration of new thinking and industry best practise into the business model and practises of Eshango. The funding will be used to support the running of further pilots and gather further evidence of the value of Eshango. This evidence base will be critical in promoting the benefits of Eshango to different partners.

Being selected a Solve solution would not only provide Eshango with support to peruse its current goals and roll out plan, it would also enable us to develop an even stronger solution and company that would be able to increase our impact for our target users.

Eshango is developed to support some of the poorest and most vulnerable people, the creation of a viable and sustainable business model that maintains the free for the user goal is crucial. Partnership with Solve will allow the consideration of industry best practise and new thinking into Eshango’s business model and revenue streams. As Eshango aims to be working across countries, in different regulatory environments, partnership with Solve can help access advisors to ensure that the business set up and management procedures are fully compliant in each jurisdiction.  In particular, this will also ensure that the policies that we adopt for data collection, storage and sharing are fully compliant, providing our users with the guarantee that we are compliant with local data protection laws.

We are targeting three different types of partners:

1 – User outreach and engagement

We aim to establish further partnerships with NGOs and FSPs to support outreach to users so that they can access the Eshango app. In partnership with these organisations funding can be secured to cover the costs of user outreach and engagement.

2 – Funding

We are also seeking partners who can provide support to the company, such as innovation grants. This funding can be used to support the costs of pilots and the build-up of an evidence base that can support the communications needed to build partnerships with user outreach partners.

3- Advisory support

Eshango is actively seeking partnership with organisations that can provide technical support on our business model, legal and regulatory and our data collection, storage and presentation system. These partnerships would ensure we are following industry best practise, while ensuring we are using the available resources to build the core of the business.

Eshango is an innovation created to address a grave problem: there are currently no viable solutions available to support non-literate women’s business and financial management.

Eshango has been developed with and for non-literate entrepreneurs, particularly women. Over 200 non-literate women entrepreneurs have been involved in each step of the development of Eshango to ensure that it meets their needs and works for them, showing our commitment to involving women in our solution.

Across the world, women are disproportionately disadvantaged, including in economic terms. They are more likely to be non-literate, excluded from formal employment opportunities and working in the informal economy. The ILO reports that 89% of women are employed in the informal economy across Sub-Saharan Africa, highlighting the scale of the problem and the potential of Eshango to be transformative.

Eshango’s provision of detailed business records to users has life changing implications: it can catalyse and support their inclusion into financial and other services, which are very difficult to access for non-literate people. This data (subject to the user’s consent) can have transformative impacts on policy as well, by informing decision-taking by development practitioners and policy makers on what action to take to better support vulnerable, poor women working in the informal economy.

The prize will add creditability and exposure to Eshango, supporting our engagement with potential partners. The funding will be used to: run a pilot with women users, in Liberia; engage with Liberian FSPs and involve them in the pilot, laying the foundations for future partnership.