By Stephen Kalema
About 22 per cent of Ugandans do not have any money to save, a Finscope Report 2018 on Gender and youth has revealed. The percentage translates to about four million Ugandans.
The report, done by Financial Sector Deepening Uganda, and released yesterday in Kampala, however, shows that of the remaining 78 per cent, only 22 per cent trust banks with their money.
The report which is conducted every after a period of three years to determine how individuals of 16 years and above manage their money, extent to which they use financial services and monitor changes in levels of financial inclusion over the time, shows that 20 per cent (3.7 million) of Uganda’s population do not entirely entertain using banks while about 36 per cent (6.7million) use both means that’s formal and informal services.
While disseminating this report in Kampala on Wednesday, the director of programmes Financial Sector Deepening Uganda, Rashmi Pillai said most of Ugandans who have nothing to save are dependent, old people and those who are unemployed.
“Nearly 40 per cent of the women do not have any income sources,” Rashmi said.
“However why again do we have few bank users? Maybe banks should carry out a survey and find out. Are they giving out services that the public need?”
Ann Nakawunde, Managing Director Finance Trust Bank said the population of Uganda needs alot of financial literacy because even those who have bank accounts, only a few are operating.
“Every year banks publish dormant accounts. This means people want to save but may be policies do not favor them to generate money which they will have to save,” Nakuwunde said.
She challenged both the banking sector and government to come out and find why people shy away from the formal financial services yet it’s the way to go.
According to the report, people whose educational levels are lower such as primary levels, secondary levels and those who never went to school don’t save in banks. However those using both formal and informal services include every educational levels.
The report also clearly showed that Ugandan who save informally are most likely to be members of different groups such as Shop credit, Savings groups, Remittance, Burial societies, Informal money lenders and such groups relay on informal borrowing to help their regular expenses, for business purposes, buy land or build houses.
However, according to Rashmi most people in these groups are youth and women .
But the Finance Minister said many bank services are in urban areas yet most population live in rural areas.
“78 per cent of Uganda’s adults are rural based yet financial providers find it costly to reach services to them that’s why most banks are coming out with agent digital banking but also this one needs technical know how,” Matia Kasaijja said through a document read by Henry Mbuguta, the Assistant Commissioner financial services, Ministry of Finance.
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