The Director General of Uganda Investment Authority, Mr. Robert Mukiza has pledged to the members of the Financial Technologies Service Providers Association (FITSPA) that government is more than ready to support them throughout.
Speaking on the first day of the annual FITSPA symposium held at Sheraton Hotel on Wednesday, Mr Mukiza said that across East Africa, Ugandans are the most innovative, educated people and they must be supported by the government so that their innovations don’t only stop at the incubation stage but reach the goal of their discoveries to benefit people.
He noted that Uganda as a country is soon getting into Middle-income status, its economy must not only depend on industrialization but technological innovations must also be supported because they are a solution to many entities in industrialization such as financial transactions.
“During the Covid-19 lockdown, Ugandans became more innovative than Rwanda, Kenya and Tanzania. Ugandans are very innovative therefore let’s give them that space and financial support, so we really need to talk to each other and see how we can bring out all the innovations on the board and see how they can be of importance to the country and the region at large,” he said.
Mr Mukiza revealed that government is also ready and committed to updating the regulatory flamework to ensure and enable the FinTech ecosystem to remain safe, efficient and inclusive. He added that inclusivity is also a very important aspect of any FinTech if it’s a solution meant to solve a certain problem.
“The government of Uganda and of course the Uganda Investment Authority are also committed to reducing the cost of doing business in Uganda to ensure that more FinTech innovative businesses come on board thus making Uganda an innovation hub in Africa and East Africa. For me the cost of doing business is a back born to any developing economy therefore we are here to see that domestic investors are supported,” Mr Mukiza said.
He however noted that if businesses are registered and licensed, it will be very easy for them to access money since many of them thrive on a self-funding mechanism.
“According to a recent survey by FITSPA, 57 per cent of FinTech in Uganda are self-funded, and only 12 per cent have access to venture capital, this shows that there is a need for the government to come and support them. This situation needs to be reversed and as a government, we are in preparation to come up with grants specifically for FinTech businesses.”
His call was highly welcomed by the FITSPA board chairperson, Mrs. Josephine Olok who said that the figure of 57 per cent of FinTechs thriving on self-funding is not sustainable and there is a need to diversify financing to ensure that players in the Fintech ecosystem are funded relatively not from external sources but from the government.
“The 57 per cent of FinTechs on self-funding is not sustainable neither does it show a sign of a promising sector because how much longer will one keep on asking for money from friends, family? Even the entrepreneur may not have money to run the business, therefore there is a gap in the market and as FITSPA we have decided to look for funding from different insinuations. So the issue is how do we create partnerships, attract investors and also how do we ensure that our local investors understand what the Fintech market is and what are the opportunities,” she said.
Limited access to funding for FinTechs has also limited linkages between their products and services to other traditional incumbents because of the various barriers in place that inhibit their communication with services already in place.
However, despite the funding challenges, a new study by Agricultural Business Initiative (aBi) conducted in June this year found that skills such as software and development of internet apps, infrastructure, cybersecurity, data science, machine learning, cognitive computing, design, marketing, and regulatory and risk management are still a big challenged because they are the most difficult to find amongst the emerging financial technologies (FinTech) subsector.
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