Kampala, March 5, 2018: Financial Inclusion in Uganda has gained significant recognition through the recently launched National Financial Inclusion Strategy (NFIS) 2017-2022 whose major focus area is to enhance development of the financial sector to be more robust to enhance inclusion.
If implemented well, there will be opportunity for more Ugandans to access a broader range of affordable, high-quality financial services and products.
Financial inclusion is a state in which all people who can use financial services have access to a full suite of quality services, provided at affordable prices, in a convenient manner, and with dignity for the client.
Broad and inclusive access to formal finance is essential for sustainable development in Uganda. Enabling a greater percentage of the population to access formal services such as savings, credit and insurance products can bring significant benefits to individuals (through increased security for their funds and the ability to access bigger loans), to businesses (reaching emerging markets, diversifying and expanding) and to the government (by supporting more inclusive growth and increased productivity through wider access to finance).
Use of digital financial services and solutions is also considered key to facilitating women access services and products. In this instance the customer’s journey towards financial inclusion is largely led by mobile money services. This is a great opportunity considering that close to a third of the population is already actively using mobile phones.
A study conducted by Financial Inclusion Insights in 2016 indicates that women are less likely to own mobile phones and be active users of mobile money (38% of men use mobile compared to 25% of women). Women prefer to use informal financial services. This is mainly propagated by social cultural norms that continue to sustain gender disparity due to the nature of women’s access and control of economic opportunities and resources.
In the wake of these realizations and the urgent need to improve the situation of women, FSDU has taken steps to facilitate key market actors to reduce the gender gap.
FSDU has attempted to realize the objectives set out in the National Financial Inclusion Strategy 2017-2022 by addressing each objective as hereunder:
- Under the objective of reducing exclusion and assess to barriers to financial services: FSD has through partnership with other representatives such as the financial service providers (FSPs), development partners, donors, and non-governmental organizations (NGOs) facilitated provision of financial services to excluded segments of the population. For instance FSDU through partnership with MTN supported the translation of the Mobile Money Menu into 7 languages in an effort to make it more accessible to people in peri-urban and rural areas.
- Under the objective of credit infrastructure Objective: FSDU Leverages human centered design and other best practices in product development to create, pilot and test services that meet the needs of the excluded. One major example is linkage banking that has seen over 800 savings groups (VSLAs) comprising of over 70% women connect with financial institutions through mobile banking, offering safety and convenient access for their savings.
- Under the Deepen and Broaden Saving, Investment and Insurance Usage Objective: FSDU has endeavored to provide technical assistance and grant support to market actors such as NUMIDA that have leveraged technology such as a mobile phone to deliver suitable micro insurance services in exchange for regular premium payment proportionate to the likelihood and cost of the risks involved.
Furthermore, FSDU has through its Pillar on policy and regulation, supported a better business environment for women by initiating the movable collateral security bill that will see women, who do not ordinarily own property or land, use alternative assets such as bicycles or sewing machines even, as security for credit.
FSDU is working towards reduction in minimum (Know Your Customer) KYC requirements to allow more women access to formal financial services and products.
“ FSDU recognizes the critical role women play in Uganda’s economy. Women’s exclusion from formal financial services poses a threat if not addressed. We remain committed to ensuring women and other vulnerable groups such as youth and refugees get access to cot effective and quality financial services so as to help reduce their vulnerability as well as increase their potential to play an even more active role in economic growth.
This International Women’s Day, we urge everyone to play their role and #PressforProgress for #FinancialInclusionofWomen.”
Jacqueline M. Musiitwa, Executive Director, FSD Uganda
As Uganda continues to progress towards improved financial inclusion, more must be done to ensure that any progress is truly inclusive and targeted toward the need of underserved populations, particularly women.
Ugandan regulatory entities and service providers are making positive strides with regulatory reform that focuses on expanding financial inclusion and new products that better suit customer needs.
About FSD Uganda
Financial Sector Deepening Uganda (FSDU) is an independent not-for-profit company committed to promoting greater access to financial services in Uganda. FSD Uganda seeks to develop a more inclusive financial sector with a focus on low-income individuals (particularly women) and Micro, Small and Medium Enterprises (MSMEs). We support innovation, conduct research, help promote and improve policy, laws and regulation that shape the financial sector in Uganda. FSD Uganda works with both public and private sector players to develop sustainable improvements in the livelihoods of low-income individuals through reduced vulnerability to shocks, increased incomes and employment creation.
FSD Uganda is funded by Department for International Development (DFID) UKaid and is part of a network of nine financial inclusion organizations working in the sub-Saharan region of Africa.Posted on