The Independent Uganda: You get the Truth we Pay the Price
Uganda is one of the top performers in financial inclusion, according to the US-based Brookings Finance and Digital Inclusion Project (FDIP). Uganda was ranked 5th among the 26 countries surveyed with the success being attributed to a strong level of mobile money adoption and the amendment of the Financial Institutions Act 2004.
The report, the second in an annual series measuring countries on four dimensions of financial inclusion – country commitment, mobile capacity, regulatory environment, and the adoption of traditional and digital financial services, saw Uganda score 78% of all the possible scores, tying with South Africa and Brazil, ahead of Rwanda and Tanzania.
This represents an improvement from last year when it scored 75%. “Uganda has demonstrated its commitment to advancing financial inclusion through digital mechanisms, including by creating a joint working group on Mobile Money Financial Services between the Bank of Uganda and the Uganda Communications Commission and by developing guidelines on mobile money services,” the report reads in part, adding that there’s need to further reduce fraud to ensure financial stability and consumer confidence.
The use of mobile money in Uganda has gained traction over the past seven years, with latest data from the UCC showing that the country’s mobile money users surged from 19.5 million in the second quarter of 2015 to about 19.9 million users in the subsequent quarter, with the value of transactions increasing from Shs 7.6 billion to Shs 8.8 billion during the same period.
Additionally, Parliament amended the financial law early this year paving way for commercial banks to introduce agency banking, Islamic banking and bancaasurnace in a move to boost financial inclusion.
John D. Villasenor, who co-authored the report, said evaluating progress toward adoption of affordable formal financial services matters because financial inclusion is a key ingredient in promoting household welfare and broader economic development.
The report comes at a time when the Central bank has just concluded the implementation of various initiatives aimed at boosting financial literacy and deepening financial inclusion in a country where only about five million people have bank accounts in a population of 35 million people.
During the survey, Kenya retained its -position as the highest-ranked country in the study by a 5 percentage point margin followed up closely with Colombia that scored 79% citing high penetration of financial services driven by telecoms.
The report notes that although diversity demonstrates that while there is no single path to facilitating financial inclusion, engagement in multinational knowledge-sharing networks and investing in digital financial services can help countries develop successful and sustainable approaches to making progress toward inclusive finance.
The survey aims at providing policymakers, the private sector, representatives of non-governmental organisations, and the general public with information that can help improve financial inclusion in their respective countries and beyond.
