The Bank of Uganda Governor Prof Emmanuel Tumusiime Mutebile has said Mobile Money and other supply-side technological developments have redefined financial inclusion through reduction of transaction costs, counter party risk and information asymmetry.
The Governor made the revelation during the Financial Sector Deepening Uganda (FSDU) breakfast discussion on ‘Redefining the approach to financial inclusion in Uganda’ that took place on Wednesday at Kampala Serena Hotel.
“After several years of stagnation in the uptake of formal financial services, mobile money pushed formal usage from 28 percent in 2009 to 58 percent in 2018,” said Prof Mutebile.
He also disclosed that the technology-driven financial infrastructure of today and tomorrow will count fully when it is made accessible to consumers with knowledge, skills, and confidence to constructively engage with the financial system.
“Bank of Uganda in partnership with the Ministry of Finance Planning and Economic Development as well as friendly donors are is championing effective financial inclusion through a multi-pronged approach that prioritizes financial literacy among other initiatives that are elaborated in the National Financial Inclusion Strategy.”
The banker, however, pointed out derisking of agriculture sector as a particular challenge to all stakeholders in fostering financial inclusion yet the sector employs majority of Ugandans.
“I look forward to working with you all in making finance count for the many, not the few, as we tailor financial inclusion to serving the people in the different layers that they belong to,” noted Prof Mutebile.
At the same symposium, Rahmi Pillai, the FSDU Executive Director disclosed that there has been an improvement in the country’s financial inclusion status with 78 per cent of adults financially included as of 2018 compared 70 per cent in 2009.
On the other hand, Ms Pillai said sectors like agriculture, agro processing, manufacturing, tourism are still faced with a number of blockages like uncertainty in macro economy, lack of management skills, competition from other international firms, lack of access to finance for startups among others.
“We would like to have more inclusive growth where the financial sector is not the driver but the enabler and actively supports the needs of the real economy and the overall well being of individuals and businesses,” she said.
Gideon Badagawa, the Executive Director of Private Sector Uganda concurred with the Governor on the issue of derisking the real economy in order to redefine financial inclusion.
“When we talk about the real economy we are talking about agriculture, manufacturing. It’s about these sectors that employ more people that generate us much production and drive markets.
“The real economy must be derisked and how do we derisk ot? By making sure that we have the off take from the manufacturing industry and agriculture. We can derisk agriculture by organizing farmers We as the private sector we urge that the best way to link farmers to the market is through industry and that is why we must support agro-led industries because they are the ones that understand the market not farmers,” said Mr Badagawa.