Corporate Social Responsibility by Hewlett Packard in Uganda

How Hewlett Packard CSR Benefits the Community
  1. Promotes micro economic growth in Uganda. How has this been done? Hewlett Packard built a new public-private consortium in Uganda to provide micro-finance, involving organizations as diverse as ACCION International, Freedom from Hunger, and the Grameen Foundation, and with some funding from the U.S. Agency for International Development. 
  2. Uses technology to ease micro economic growth and ultimately contributing to the micro-economy of Uganda. This was evident in 2002 where Hewlett Packard formed a partnership with a number of microfinance networks (MFIs) and commercial partners working in related areas to explore how technology could be used effectively to help scale microfinance. The partnership – called the Micro - development Finance Team (MFT) – was quite successful at mobilizing resources from the United States Agency for International Development, leading academic institutions, and engaging a large management consulting firm. 
Description of CSR as externally perceived 
Using a combination of technology and business processes, the Remote Transaction System (RTS) was developed, that supports both group and individual lending, online and batch offline processing, and back office synchronization. This solution was intended to become an industry standard, help MFI reach isolated clients cost effectively, and enable microfinance to reach a new stage of development.

The RTS is based on the use of sturdy hand-held devices that can communicate over GSM cellular networks. Combined with the use of smart cards given out to clients and microfinance agents, the system allows MFI agents to collect crucial financial data in the field and subsequently to transfer the data directly into the MFIs’ computerized financial management systems. The RTS eliminates the need to prepare, transport, and enter hand-written reports, reducing costs for rural operations.

In addition, electronic collection of data raises client confidence in MFIs, as well as reducing fraud. Finally, the system, if used by the industry as a whole, might allow MFIs to take full advantage of latent synergies that exist among geographically and financially diverse institutions.

With prototype technology, the MFT implemented a pilot of the system in Uganda in partnership with three MFIs: Uganda Microfinance Union (UMU), a cooperating partner of ACCION; the Foundation for International Community Assistance (FINCA), and the Foundation for Credit Community Assistance (FOCCAS), a collaborating partner of Freedom from Hunger.

The advantages of the system as implemented included automation of transactions, reduced client time and travel, more frequent payments, reduced cash management risk, and avoidance of costs for “brick and mortar” branches. The MFT is experimenting with improved MFI business models in Uganda.

In addition, the MFT has handed over its intellectual property rights to the RTS to a new organization, Sevak Solutions, whose task will be to evolve licensing procedures and a broader business strategy for disseminating the RTS platform to microfinance institutions both in Uganda and throughout the developing world.

Because the RTS Uganda pilot was of a relatively short duration and rolled out to only hundreds of clients, it was not able to definitively prove the value of the technology at scale. Financial analysis provides evidence of benefit to loan clients, especially in rural areas that would otherwise go unserved. However, the solution was only tested with existing clients and did not include previously unserved customers. The analysis also provided evidence of high value to the agents and MFIs under some business models.

Long term impact on Ugandans 
The micro-financing solutions using technology are easing access to financing to the rural poor and eventually increasing their purchasing power and income generating opportunities. This is promoting healthy livelihoods in the long run.

CSR Rating against 10 
 This is a true example of CSR done right. The company’s CSR is well matched with its core mission and it uses its technology solutions to ease micro-financing.


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