Financial inclusion alone is not enough – Experts

Kampala, Uganda | THE INDEPENDENT | Finance experts have said that having people financially included must come with their ability to manage shocks, invest, and have better health.  Financial inclusion refers to products or services that are either financial or non-financial made accessible to poor populations to aid their financial needs.

Rashmi Pillai, the Executive Director of the Financial Sector Deepening Uganda (FSDU), told a meeting at Kampala Serena on Wednesday that it was not enough for all people to have just bank accounts, access to mobile money and other financial services. Financial inclusion must reflect a positive change in their lives.

Pillai said last year the number of Ugandans financially included increased from 28 per cent in 2009 to 58 per cent in 2018. But also, the number of poorest Ugandans increased from 19 per cent to 27 per cent. Pillai said the numbers of financial inclusion are looking positive from the supply side but the impact on people’s lives must also be felt.

Technologies like mobile money have enabled people to send and receive small money but from many, it doesn’t go beyond that.

Kenya is almost achieving 100 per cent financial inclusion but people’s ability to manage shocks and invest in the future has gone down.

Bank of Uganda Governor Emmanuel Tumusiime Mutebile said the technology-driven financial infrastructure of today and tomorrow will count fully when it is made accessible to consumers with knowledge and the skills to use it.

Also noted was the challenge that most adults rely on sources of income that give them access to small amounts of cash on an inconsistent basis.  Their financial behaviour, Pillai said, is driven by their daily needs which makes it hard to invest in the future.

This calls for the government to direct support activities they do, invest in health to cushion them against disease shocks.

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