FSD Uganda2024 Annual Report Letter from the Board Chair
Shaping Uganda’s financial future: FSD Uganda’s advancement of digital financial services for financial inclusion and economic growth
In this annual report, we highlight FSD Uganda’s key achievements in shaping the finance sector to benefit Ugandans in 2024. We also look ahead to 2025 as we approach the end of our current strategic period. Reflecting on 2024, we recognise both progress and challenges in financial inclusion, both within Uganda and globally. Despite a difficult global and local context, significant strides have been made in increasing financial inclusion.
Progress in financial inclusion
Uganda’s fifth FinScope Survey which was launched in 2024 shows that the percentage of financially included adults has grown from 77 percent in 2018 to 81 percent. Formal financial inclusion is more common among men and urban populations. Mobile money and savings groups remain the most widely used services, with the share of Ugandans using digital transfers increasing slightly from 57 percent in 2018 to 64 percent. Globally, the Global Findex also reports that digital payments in developing economies grew from 35 percent in 2014 to 57 percent in 2021.
Financial health remains a challenge
However, this progress does not align with the financial health of the population. Poverty projections for 2024 suggest that 4 out of 10 Ugandans live below the poverty line, with the World Bank estimating that 7 percent of the global population—about 574 million people—will still live in extreme poverty by 2030. Additionally, the World Economic Forum has revised the timeline to close the global gender gap from 99.5 years to 135.6 years.
To foster economic growth and reduce poverty in the medium term, experts recommend that Uganda’s economy undergoes structural transformation, focusing on shifting labour to more productive sectors. This includes reforms to encourage private sector investment by reducing business costs, improving access to finance, and promoting digital and other innovative technologies. These recommendations align with FSD Uganda’s approach to improving financial inclusion through market systems development, which directly impacts financial health.
Our work in financial inclusion is comprehensive, going beyond just providing access to financial services. We aim to leverage financial services to improve productivity, access to basic needs, and overall economic growth. Increased digitisation in essential sectors, particularly financial services, has paved the way for innovations in digital financial services (DFS), which are reshaping the inclusive financial ecosystem. Technology is essential in coordinating various value chain actors efficiently, especially when located in different areas.
Digital financial services and economic growth
Digital financial services are a cornerstone of FSD Uganda’s efforts to create more inclusive financial markets. To promote the adoption of DFS among underserved populations, we are implementing a platform strategy. This strategy uses digital technologies to drive economic growth, enhance efficiency, and improve access to financial services. Through partnerships with four implementing partners, we are working on activities such as strengthening institutional capacity, reviewing business models and products, and mapping ecosystems.
Looking ahead: Addressing challenges and gender inclusion
A digitally driven strategy will always face challenges in economies like Uganda where cash is still king among underserved and unserved populations. This highlights the complex nature of the issues we are tackling and reinforces the need for a holistic approach that ensures more people and businesses gain access to financial accounts and use them for digital transactions.
Looking ahead to 2025, we plan to specifically target young women, who are often excluded from financial services, across all our programming, including digital financial services (DFS).
None of these interventions would have been possible without the invaluable support from our partners—the Gates Foundation, the European Union, and the Mastercard Foundation. We also extend our sincere appreciation to all our partners and stakeholders for their ongoing support, recommendations, and collaboration.
Looking ahead, we are excited about the continued progress FSD Uganda will make in the coming financial year.
Emma Mugisha
Board Chair
