Mobile money has emerged as one of the main solutions to achieving financial inclusion in Uganda.
However, experts now want the focus turned to better regulation of the sub-sector to mitigate the risks of mobile money transfers.
This was one of the major concerns expressed during the Financial Inclusion Week get-together and dialogue, held in Kampala, during which regulators, bankers, money transfer and telecom operators agreed that getting financial inclusion right will depend on better regulation.
For instance, since October last year when Uganda launched the Financial Inclusion Strategy 2017-2022, regulation has been stepped up and the country has recorded a 24 per cent jump, with 78 per cent of the adult population now financially included.
The strategy, built on five pillars aims to reduce financially excluded adult Ugandans to only five per cent of the population by 2022 and to reduce financial exclusion and barriers to obtaining financial services.
“We have made significant gains in reducing the number of people that did not have access to financial services to only 22 per cent. At the time of launching the financial inclusion strategy, only 54 per cent of Ugandans were financially included,” said Rashmi Pillai, director of programmes at Financial Sector Deepening Uganda.
According to Bank of Uganda Governor Prof Emmanuel Tumusiime-Mutebile, these gains are driven by two innovations in the country’s financial sector — the use of mobile phone technology to deliver financial services and agent banking.
But other experts add that financial inclusion that is dependent on the mobile phone must be low-cost, fast, secure and convenient.
“Regulation is key because technology alone cannot do it. As regulators, we must keep up payment systems oversight,” said a Bank of Uganda official.
The 2018 Finscope Uganda Report shows that 57 per cent of adults in the country use digital payments.