Are digital platforms a clear path out of poverty for Uganda’s smallholder farmers?

Are digital platforms a clear path out of poverty for Uganda’s smallholder farmers?

By Geoffrey Okidi

John, a 50-year-old smallholder farmer in Mbale district grows maize, beans, and cassava on less than one acre of land for own consumption and sale. His farm production is affected by over reliance on traditional farming practices, use of low yielding varieties, small farm size and limited access to finance. John often sells his produce at his farm to middlemen at a low price, earning less than UShs1 million annually. John’s story is that of a typical smallholder farmer. His story represents that of 6.9 million households in Uganda according to the 2019 Uganda Annual Agricultural Survey report.

Fortunately, this narrative stands to change if Uganda’s third National Development Plan (NDP III) 2020/21 – 2024/25 goal to increase household incomes and improve the quality of life of Ugandans is realised. The NDP III recognises that a high proportion of the population is still dependent on subsistence agriculture due to: (i) low agricultural production and productivity; (ii) poor storage infrastructure; (iii) poor market access; (iv) low value addition; (v) limited access to agricultural financial services and critical inputs.

To solve these challenges, the government is committed to the Agro-Indutrialisation Programme, increase of ICT penetration and use of ICT services for social and economic development. But how can this commitment solve the challenges being faced by Uganda’s smallholder farmers?

The Financial Sector Deepening Uganda believes that embracing technology platforms is one way to activate this commitment.

The technology platform concept is fundamentally simple: create a place where producers and consumers can come together in interactions that create value for both parties using digital technology. Examples of digital platforms include Uber, Airbnb, Amazon, Jumia among others.

There are multiple ways by which digital platforms can create gains in production, efficiency, information flow, inclusion for marginalised groups, and transparency across segments in the agricultural value chain—all of which contribute to improved outcomes for small-scale producers. Some of the potential benefits of digital platforms include:

Market aggregation: Platforms create new efficiencies by aggregating unorganised markets. Market aggregation provides information and power to platform users who formerly engaged in interactions in a haphazard fashion, often without access to reliable or up-to-date market data. Using platforms, economies of scale can be realised when numerous dispersed smallholder farmers get organised into viable economic units or groups that are engaged in producing for the market. The 2019 Uganda Annual Agricultural Survey report revealed that only six percent of the adult household members belonged to a farmer group. To improve their incomes through collective actions, small holder farmers need to join farmer groups. Working in groups increases their bargaining power, possibilities of sharing services, assets, and infrastructure such as warehousing and processing equipment. This enhances post-harvest handling, value addition and product quality. Additionally, working in organised groups reduces the unit cost of production and delivery of services to smallholder farmers thereby increasing the possibilities of profitability and growth.

Appropriate value and supply chain financing: Access to finance remains a limiting factor for many farmers to invest in productivity enhancements. As such, only four percent of Ugandan farmers use a full package of production enhancing technologies (a combination of fertilisers and improved seeds) and supportive services according to the NDP III. This is partly because smallholder farmers are engaged in the production of a variety of enterprises that makes it uneconomical and increases the risk for lenders. Using a market-led approach to farming, smallholder farmers should be supported to participate in one or two profitable value chains appropriate to their agro-ecological zone. This will enable them increase access to internal and external value chain financing opportunities that platform participants can proffer. To begin with, smallholder farmers should be rallied around the 10 priority commodities in NDP III namely, coffee, tea, fisheries, cocoa, cotton, vegetable oil, beef, maize, dairy and cassava. Specialisation in these commodities will facilitate the development of appropriate value and supply chain financing business models and financial solutions in the digital marketplace.

Strong and sustainable partnerships in the platform economy: Within the digital platform, producers and consumers will be connected to each other to exchange value. For example, a platform would facilitate interactions between smallholder farmers, off takers, input suppliers, Financial Services Providers (FSPs), providers of social services, etc. Digital data from platform activities can drive increased financing to farmers, both as buyers of services and sellers of produce. The platform would also afford participants economies of scope which increases the opportunities for economic multiplier effects for the financial service providers, other economic actors, and the value chain actors. For example, FSPs can deliver financial services to different actors across the value chain thereby increasing the possibilities of revenue and profits. Platform participants would have increased access to various services across the value chain in addition to the primary economic activity. There is also increased ability to bundle services together to alleviate multiple constraints at one time. For example, platforms can easily facilitate contract farming while tying output markets to credit markets. Risk mitigation measures such as agriculture insurance and irrigation can also be bundled up with other services on the platform.

To determine the viability of embracing technology platforms, the Financial Sector Deepening Uganda has partnered with three technology platforms – Ensibuuko Tech Ltd, Quest Digital Finance Ltd and Emata Uganda Ltd to pilot three-year programs. The programs will digitise different agricultural value chains, trade, and light manufacturing supply chains. This is with a goal to support the development of sustainable business models, products/services, and solutions for delivery of financial services to the underserved market segments. Learnings from these pilots will be shared in subsequent blogs and case studies.

Photo credit: Image by Freepik


Annual Report 2020 – 2022

Annual Report 2020 – 2022

    Download Report

    This FSD Uganda annual report captures our accomplishments over the financial years 2020/2021 and 2021/2022 on the journey to build an inclusive financial sector for women, youth, forcibly displaced people, smallholder farmers, and micro, small and medium enterprises (MSMEs). This report also manifests how FSD Uganda has evolved as an organisation since its establishment in 2015 and gives a glimpse into our activities for the new financial year 2022/2023.

    The two-year implementation period covered by this report happened during unprecedented times of the pandemic which came with challenges. Regardless, the FSD Uganda team in agile fashion managed to find a way to implement the organisation’s activities and went on to overperform in some indicators.

    None of our accomplishments would have been possible without the support of our donors, partners, and sector stakeholders for which we are grateful.


    Building efficient credit markets in Uganda

    Building efficient credit markets in Uganda

    By Joseph Sanjula Lutwama

    Given that the average annual savings for adult Ugandans is under Ushs 5,000, many of us will have to interface with credit at one point in our lives. This becomes more likely when it comes to running a business. Credit is a critical component of the daily operations and survival of any business because few (especially the micro, small and medium enterprises) have sufficient business savings to meet their working and long-term capital needs.

    Unfortunately, not many Ugandans or their businesses have access to credit from formal financial institutions such as banks. The most recent national surveys on the demand for financial services put that figure to about 2 out of every 10 adults in Uganda. The other 8 rely on family and friends, informal financial institutions, and money lenders to meet their credit needs. In fact, many Ugandans are not even keen to access credit from formal financial institutions. This is in part because of past experiences where their property or that of close acquaintances was liquidated by banks for failure to pay back their loans.

    From high interest rates due to risky businesses and non-performing loans to burdensome collateral requirements, the state of credit markets in Uganda is informal, opaque and makes capital extremely costly. This is not a conducive environment for business growth and keeps individuals and businesses in a perpetual vicious cycle of debt.

    Thankfully, this narrative is bound to change with the amended Credit Reference Bureau regulations issued by Bank of Uganda on September 9, 2022. Credit Reference Bureaus ensure that transparency prevails in the credit markets as they track the credit history of all borrowers to enable lenders know how they repay their loans. This enables the financial institutions adequately assess and minimise the risk of default by providing credit and safeguards commensurate to the risks of the borrower. Until the recent amendments, this service was only available to the formal banking sector that covers Tiers 1-3 (commercial banks, credit institutions and finance companies and microfinance deposit taking institutions) of Uganda’s financial system.

    The amended regulations now extend this service to the entire economy to cover both formal and informal credit providers. It also expands the scope of credit to include financial and non-financial credit. This will greatly enhance the transparency in the entire credit market enabling both suppliers and consumers in this market to have a more complete credit risk score. The new regulations will also help level the playing field for small and large lenders.

    The hope is that this enhanced transparency will reward more disciplined borrowers with increased access to credit at affordable interest rates. The other anticipated benefit is more appropriate collateral requirements given that credit reports will become their ‘reputation collateral’.

    Credit reporting by the credit reference bureaus requires digitalisation of consumer and SME finance which represents a large opportunity to expand access to finance to unserved and underserved market segments. As the provision of digital financial services rises beyond traditional banks, expanding access to data from multiple financial institutions, from traditional formal to the less formal, is more critical than ever which makes this amendment timely.

    The amended credit reference bureau regulations also pave way for a discussion about the role that the Credit Reference Bureaus Association of Uganda registered in 2021 can play in credit reporting, a fairly new concept for majority of finance sector players while ensuring financial inclusion.

    From setting up industry standards for credit reporting, to educating borrowers and lenders about credit reporting, the to do list for the association is endless. The need to setup structures for less sophisticated financial institutions and measures to protect borrowers from excess risk as well as their data prove that a lot needs to be done to improve the status of Uganda’s credit market. To tackle this uphill task, the Financial Sector Deepening Uganda is keen to play a convening role for key credit reporting stake holders to discuss and agree on how to build an efficient credit market in Uganda that includes the unserved and underserved market segments.

    Photo credit: Image by pch.vector on Freepik


    Rebooting the Manufacturing Sector Post the Covid-19 Pandemic: A Case for the Platform Economy

    Rebooting the Manufacturing Sector Post the Covid-19 Pandemic: A Case for the Platform Economy

    By Joseph Lutwama

    Taking Stock

    In the manufacturing sector, the Covid-19 pandemic came with a mixed bag of fortunes. The pandemic presented an opportunity for some industries and catastrophe for others. Industries producing accessories related to the pandemic and those producing necessities like processed foodstuffs were not severely affected as they continued to operate[1]. However, those that rely on global supply chains for their industrial inputs were severely affected as the economic lockdowns across the globe made it very difficult to easily access imports[2].

    With the pandemic on its way out, how do we build the ruins into a more resilient manufacturing sector?

    Most of the recovery initiatives have focused on short-term stimulus packages to keep the manufacturing industries afloat. However, a lot more emphasis needs to be placed on setting the right foundations that will ensure long-term sustainability and resilience to future economic shocks such as the one occasioned by the Covid-19 pandemic.

    The State of Manufacturing in Uganda

    What makes most manufacturers vulnerable to economic shocks is their size and individual production capacity that makes it difficult to adjust and adapt in the face of economic disruptions. Obwona et al[3]. in their research on the evolution of industry in Uganda note that eight out of every ten manufacturers employ less than 35 people and nearly five out of every ten employ less than 10 people.

    Most of the manufacturers are small cottage industries heavily reliant on savings and informal credit from family and friends. In cases where they can access formal credit, it is limited in tenure and amount, usually not exceeding a year or two and small amounts ranging from US$100 to US$3000. Such terms leave no wriggle room for one to undertake long-term investments to build a strong foundation to cushion against economic shocks.

    The Platform Economy: An Anti-Dote to the Vicious Cycle of Vulnerability

    So then are these manufacturers doomed to a vicious cycle of vulnerability to economic shocks? I believe the platform economy has the anti-dote to this vicious cycle of vulnerability. The platform economy harnesses the power of technology platforms to transform micro and small manufacturing entities into viable and profitable business units with the capacity to grow into medium and large business ventures. There are three building blocks of the platform economy; aggregation, a supply-chain approach and technology.

        1. Aggregation looks at the ability of technology platforms to aggregate small economic units into large collective business ventures which results into economies of scale and scope. Economies of scale in the sense that the small manufacturing entities can produce at scale what previously was unimaginable as individual units. One thousand producers of honey collectively can produce honey at scale enough to compete for the large honey markets with much higher returns on investment in both the domestic and export markets. Economies of scope make it possible for the manufacturers to receive a variety of services and products at a much lower unit cost. Some of these services are provided as a shared service across all the platform participants thereby spreading out the cost.

          A clear path to scale allows these small manufacturers to consistently grow their business savings, providing them with a solid track record to access more reliable and affordable credit from formal Financial Service Providers (FSPs). It is these financial savings and formal credit that will provide a cushion in the event of an economic shock thereby building resilience within the business.

        1. The supply chain approach facilitates and promotes specialization among small manufacturers as they can only focus on one or two products if they are to maximise returns from a particular supply chain. These small manufacturers are used to engaging in a wide variety of products and services which they keep changing from time to time. While this may be a great strategy to ensure survival as a small business, it is not attractive to formal financial institutions as it does not create a clear path to growth and long-term sustainability. It only keeps them small as they never produce a product long enough to gain mastery and specialty which are critical ingredients of growth and scale.

          Operating in formal and organized supply chains (which technology platforms provide) forces these small manufacturers to focus and organize their businesses for scale and growth as they are now required to specialize in the production of specific products. This not only increases their access to formal financing but also reduces their financing risk. Being part of a formal and well-organized supply chain reduces the individual financing risk of a small manufacturing as their overall risk is spread out across the other more financially sound large supply chain actors.

        1. Technology is the third building block of the platform economy which connects all the dots of the platform economy. It facilitates the interactions among the platform participants in ways previously unimaginable in a physical environment. Technology is more efficient and cheaper as it enables interactions and transactions across a multitude of participants in real-time which otherwise would take days or months to accomplish at a higher cost in a physical environment. Technology not only enables efficiency gains and higher productivity (all critical to achieving scale and growth) but it also increases accessibility to finance at a much lower cost.

    A Parting Shot

    Technology platforms, that can crack the puzzle of crafting the right business model, that brings together the different actors on to the platform, to harness the economic advantages highlighted above, present an immense opportunity to increase access to formal finance. These platforms are also a path to long-term sustainable growth for the manufacturing sector in Uganda – a sector that is more resilient to economic shocks, adaptable and responsive to the ever changing and disruptive domestic and global markets


    [1] accessed on 23/06/2022
    [2] ibid
    [3] accessed on 23/06/2022


    Making a Culture out of Saving Money

    Making a Culture out of Saving Money

    By Carolyne Ariokot and Brenda Banura

    In a country whose citizens’ saving culture is in its adolescence, with only 54% of Ugandan adults saving an average of UShs6,000 (2018 Finscope Report respectively), commemorating the World Savings Day provides a great opportunity to highlight why saving money is essential.

    Saving money enables you invest, put your money to work so that it generates income and appreciates. From asset accumulation to taking up investment products from fund managers, there are varied investment opportunities to choose from.

    When you save money, your credit score improves. For people who don’t have assets to use as collateral when in need of loans, saving money accumulatively will help improve your credit score because it means that you are more likely to pay back. This is why, it is common for savings and credit cooperatives to give credit whose value is twice or thrice your saving balance.

    Among other lessons, the post Covid-19 pandemic effects demonstrated the importance of saving for emergencies. Saving money enables you deal with uncertainties better and reduces your economic vulnerability.

    The 2020 Covid-19 Finscope report (which identifies and describes financial service needs and the gaps in financial service provision), showed that 57% of Ugandans would not be able to sustain their lifestyle after just one day of lockdown.  81% would not be able to sustain it after 15 days. This lack of financial preparedness is partly because of the poor saving culture.

    For some individuals especially those in the rural areas and people without steady incomes, despite the multitude of benefits, there just isn’t any money to save after spending on the basics. Therefore, as advocates of financial inclusion, the Financial Sector Deepening (FSD) Uganda has transitioned from viewing access to financial services as an end, to viewing it as an enabler. Financial services include saving, credit, payments, and insurance. The financial inclusion efforts now go beyond individuals and businesses opening bank accounts to leveraging finance services to increase productivity, incomes and employment, access to basic needs and overall economic growth.

    By leveraging finance services to increase productivity, we are supporting financial service providers such as banks, insurance companies and financial technology companies to design related products that enable people increase incomes and opportunities to access and utilise financial services such as saving money.

    To advance these efforts, in 2019, Opportunity Bank rolled out a group loan product that enabled Christine Abur, a small-scale farmer in Kiryandongo district in Northwestern Uganda rent farming land that enabled her to increase her productivity and income.

    Abur narrates her experience saying, “I have been a farmer for a long time but the harvest from my half an acre of land was just enough to feed my family. I knew that renting land in the neighborhood would enable me harvest much more so that I can sell off the excess, but I just couldn’t afford to rent extra land. In 2019, Opportunity Bank educated women in my village about their group loan product and advised us to form a group, start saving and get loans. I joined a group with which I saved Ush50,000 (about USD13) per season. I saved for three seasons and my group guaranteed me to get a loan of UShs450,000 (about USD118). I used the money to rent land, buy seeds and hire extra labour. My harvest increased and so did my income and savings. I plan to rent more land, increase my income, and save a lot more.”

    FSD Uganda shares learnings from interventions such as these with other financial service providers to serve as a benchmark to extend similar services to the wider population.

    Just like a group loan product was developed to enable Abur increase her productivity, financial service providers design or enhance their various products to enable the different categories of clients especially those at the bottom of the pyramid to access basic services such as health, education, and housing.

    Ultimately, an increase in income for individuals and businesses stimulates active participation in the financial market by transacting to meet different needs. This is bound to see an increase in the number of people saving money and the amounts being saved.

    Photo credit: Image by jcomp on Freepik


    Assessing National Funding for Women’s Economic Empowerment in Uganda

    Assessing National Funding for Women’s Economic Empowerment in Uganda

      Download Report

      FSD Uganda was part of the advisory committee of a Publish What You Fund (PWYF) project that assessed national funding for women’s economic empowerment (WEE), women’s financial inclusion (WFI), women’s empowerment collectives (WECs), and gender integration (GI) in Uganda. The project also assessed funding in Ethiopia and Pakistan.

      The team worked with public expenditure experts to examine national and sub-national funding for WEE, WFI and WECs for the last five years. These outputs stem from the PWYF WEE project, which is building evidence to inform better investment decisions.

      The Uganda based report assesses the national funding to WEE, WFI, and WECs over five years: financial year 2016/17 to 2020/21. The report details the budget process, highlighting gender and equity (G&E) planning and budgeting. The analysis establishes the amount of funding appropriated to gender-responsive interventions, the proportion of appropriated funds released, and the proportion effectively utilised. The areas of focus included sectors that implement explicit programmes and/or interventions on women and girls to economically empower them, namely: health, education, social development, agriculture, water and environment, and energy.

      The study used a mixed-methods approach, including the quantitative and qualitative analysis of primary data sources and key informant interviews (KIIs). This study ascertains the extent to which and the areas wherein the Government of Uganda (GoU) has over the years contributed to improved quality of life and equal opportunities for women and girls in accessing, benefiting, and participating in development programmes.

      The reports provide useful insights for policymakers and gender advocates to support better funding approaches to advance gender equality and women’s economic empowerment. It also includes recommendations for improving the transparency of women’s economic empowerment funding.


      Validation of a Report, an Assessment of the Microinsurance Needs of Uganda’s Informal Traders

      Validation of a Report, an Assessment of the Microinsurance Needs of Uganda’s Informal Traders

      Kampala, Uganda: The Uganda Insurers Association (UIA) and the Makerere University Business School (MUBS) will today, during a validation workshop share findings from research that assessed the microinsurance needs of Uganda’s informal traders to inform microinsurance product development.

      This follows feedback from traditional insurance providers that suggests a lack of knowledge and data necessary to develop microinsurance products that meet the needs of the population.

      Microinsurance operates the same as conventional insurance except that it targets low-income individuals allowing them to pay smaller value premiums for protection from commensurate risks. The flexibility of the microinsurance product makes it potentially suitable for consumers in Uganda’s informal economy, who form most of the working population in Uganda.

      Insurance plays an essential role in the economy by providing a buffer should risks such as poor health, theft, fire, or damage occur. However, the level of insurance penetration in Uganda is extremely low at approximately 1%. This low uptake is largely due to low income and therefore, cost of insurance, lack of knowledge and awareness of the product and low levels of trust from most of the population.

      “A key solution devised to overcome the perceived high cost of insurance, especially among the lowincome population, is to provide a customised microinsurance product to meet the specific needs of this segment of the population,” explains Mr Jonan Kisakye, the Chief Executive Officer, Uganda Insurers Association.

      While the benefits of microinsurance products are generally accepted, the microinsurance market in Uganda remains small. As of June 2022, there were only two microinsurance firms in Uganda, one of which is yet to provide microinsurance products.

      The research found that the understanding of microinsurance and the main risks facing market vendors differed from one stakeholder to another. Most market vendors are not willing to pay for insurance which isn’t tangible and from which they might not benefit or retrieve a portion of the premiums paid.

      Those willing to pay indicated the ability to pay premiums amounting to Ush30,000 monthly. These were willing to pay for microinsurance products that feature medical-related products, simplified documentation, affordability, and diversity of products.

      Additionally, a generally limited understanding of insurance and a lack of trust in providers were noted.

      “Based on the research findings, we recommend sensitisation and awareness initiatives that promote microinsurance literacy among informal groups as a tool to increase uptake. There is also need to encourage consumer protection against exploitative pricing and poor products. Further, insurers need to adopt a marketing strategy that clearly articulates the value proposition by recognising the differing needs and attitudes of the market vendors,” says Dr Rachel Mindra Katoroogo, the lead researcher and Dean, Faculty of Commerce and Senior Lecturer at Makerere University Business School.

      “Financial Sector Deepening Uganda offered financial and technical support to this research process because of the important role insurance can play in creating financial resilience. This research study is one of a number of collaborations between universities and local industry associations that we have supported to promote contextually relevant research for the financial sector. We hope this will increase collaboration between academic institutions and associations to develop evidence-based solutions for financial inclusion,’’ says Joseph Lutwama, Director of Programs, Financial Sector Deepening (FSD) Uganda.

      Note to the editor

      About UIA

      The Uganda Insurers Association (UIA) is an umbrella organisation for all insurance and reinsurance companies in Uganda and works for the establishment and development of a sound insurance industry. UIA works to advance the interests of insurance and reinsurance companies by adopting a common strategy that encourages and promotes close cooperation, the exchange of business among members, builds on knowledge through research, influences the enactment of favorable legislation, and represents the views of the membership to the Government, quasi-government, and private bodies. The insurers are 36 and reinsurers, 4. The insurers are divided into non-life totaling to 21 companies, life has 9 companies and there are 2 microinsurance companies.

      About MUBS

      Makerere University Business School (MUBS) is the leading provider of business and management education and research that facilitates professional and industry development in the region. MUBS was established to centralise the development and standardisation of business and management education in the country while creating an environment and opportunity for the young and old to develop their talents and strengths through different academic and training programmes. These programmmes are offered at undergraduate, postgraduate to professional level.

      About FSD Uganda

      Financial Sector Deepening (FSD) Uganda is the country’s leading ‘think and do tank’ on financial inclusion and inclusive financial market development. FSD Uganda is an independent not-for-profit company committed to promoting greater access to financial services. FSD Uganda seeks to develop a more inclusive financial sector with a focus on low-income individuals. We support innovation, conduct research, and support regulatory processes that shape the financial sector. The organisation is funded by the Bill & Melinda Gates Foundation, the European Union, and the Mastercard Foundation.

      For more information, please contact:

      Peter Simon Odoki, Public Relations Officer, MUBS via or +256-772402575/+256-702402575

      Kalule Gava Ibrahim, Publicity, Advocacy and Market development Officer, UIA via or +256-782 044 787


      The State of Financial Inclusion in Uganda: An Analysis of the 2019/20 Uganda National Household Survey Findings

      The State of Financial Inclusion in Uganda: An Analysis of the 2019/20 Uganda National Household Survey Findings

        Download Report

        In today’s increasingly connected world, access to useful and affordable financial products and services that meet the needs of individuals and businesses is a critical factor to their survival, growth, and sustainability. Since the early 2000s, financial inclusion has been a constant focus of global development stakeholders and a “stated goal for both public and private sector actors.”

        In 2013, the Bill & Melinda Gates Foundation (BMGF) launched the Financial Inclusion Insights (FII) programme to track the progress of financial inclusion in Uganda and seven other countries in Africa and Asia. In 2019, BMGF handed over FII initiatives to local stakeholders to ensure ownership and buy-in from in-country private and public agencies, better integration of FII data in the decision-making process, and long-term sustainability of FII research and action.

        To leverage a large-scale population study and link FII metrics with other household and individual-level statistics, a set of FII questions was included in the Uganda National Household Survey (UNHS) carried out by the Uganda Bureau of Statistics (UBoS) from September 2019 to November 2020. This report offers the first-round of analysis of FII data collected via a harmonization with the UNHS. The findings presented in this report are comparable with the FII 2017 and FinScope 2018 survey results in Uganda.


        Uganda’s National Fourth Industrial Revolution(4IR) Strategy – Annexure

        Uganda’s National Fourth Industrial Revolution(4IR) Strategy – Annexure

        Draft opportunity assessment and digital readiness assessment

          Download Publication

          A three-component framework is used to assess and compare the technology strategies of a peer group of countries and draw learnings for the formulation of national fourth industrial revolution (4IR) strategies. The first component is the objectives that have been made explicit in the 4IR strategies. This looks for discussions on goals, aims, purposes and other synonyms for objectives. The second is the focus of the strategies, either technology or opportunity focused, and the sectors to which the strategies are applied. A technology focused approach is one in which the strategy is developed by anchoring on 4IR technologies and outlining how those technologies can be applied across sectors. This measure excludes Artificial Intelligence (AI) strategies from the set of technology-based strategies because AI strategies are common across countries.. An opportunity focused approach is one in which the strategy is anchored on key areas of opportunity, for instance economic sectors, in which numerous 4IR technologies can be applied. The final component is the key levers for action outlined in the strategies. Here, the tools and activities the nations will focus on to achieve their objectives are assessed. The comparison will provide insights on international best practices and common trends in 4IR strategy planning. Many countries refer to or take inspiration from the strategies of others . Learning from others provides an array of ideas and experiences from which to draw to draft comprehensive and well considered strategies.


          Five Years of the Fintech Association, a Case for Robust Industry Associations

          Five Years of the Fintech Association, a Case for Robust Industry Associations

          By Brenda Banura

          Congratulations to the Financial Technologies Service Providers Association (FITSPA) on reaching another milestone, a celebration of five years of stewardship in the financial technology (fintech) industry.

          Prior to the birth of FITSPA – the fintech association, the digital financial solutions sector in Uganda was in a frenzy propelled by the significant takeoff, of mobile money. Mobile money subscribers had dramatically grown from 0.6m in 2009, the year of introduction, to 23.3m by 2017. Usage of mobile money had evolved from money transfers to include payments, savings, credit, and cross-bank transfers making it a fully-fledged digital payments ecosystem.

          The regulatory framework

          These innovations happened in an environment that lacked a robust legal and regulatory framework except for mobile money guidelines, which were not comprehensive for the increasingly complex financial system.

          The government was keen on formalising this sector, but there was no credible industry body to work with to make this possible. Unlike other sectors like banking, insurance and microfinance, the fintech community did not have an association that could engage government and other major stakeholders to further the interests of the digital payments ecosystem. There was need for formalisation for the industry to thrive.

          FSD Uganda’s role in FITSPA’s set up

          For the Financial Sector Deepening (FSD) Uganda, the establishment of FITSPA was important because technology comes with affordability and efficiency. These aspects play a significant role in increasing financial inclusion. Financial technology makes it affordable to reach the underbanked in remote rural areas efficiently, in addition to smoothening the value and supply chain.

          To kick start the step-up, FSD Uganda played a convening role bringing all fintechs together to build consensus around forming an association. FSD Uganda then funded legal support to set up, register and offer guidance on how to build a strong association.

          This is in addition to supporting the association in developing an industry code of conduct to improve the integrity of the FinTech industry and ultimately increase customer, regulator, and investor confidence.

          FSD Uganda also introduced FITSPA to regulators and advocated for the association to have a seat at the table.

          In July 2017, FITSPA was launched to give fintechs a voice to lobby for appropriate regulation and a platform to engage with regulators. True to its founding objectives, in 2020, the National Payment Systems (NPS) Act was passed.

          After the setup of FITSPA, FSD Uganda provided hands-on support to FITSPA members to operationalise the NPS Act in preparation for the license application. To aid this process, a Compliance Toolkit that would assist its members in implementing the provisions of the NPS regulations was developed.

          To date, FSD Uganda continues to provide guidance and influence in all matters geared towards supporting growth aimed at increasing financial inclusion while navigating the dynamics of developing useful financial digital solutions.

          As it celebrates its fifth anniversary, FITSPA has grown by leaps and bounds. The process has been long, and challenging but, in the end, worthy because of the benefits of industry associations that were made evident along FITSPA’s journey.

          Dividends of associations

          Associations enhance the credibility of the members. Until the payment aggregators came together under FITSPA, the industry had little credibility. FITSPA opened the door to solid partnerships within government, private sector, and the international community. FITSPA has now built meaningful partnerships with key stakeholders like the Central Bank, Uganda Bankers’ Association, Private Sector Foundation, the Uganda Institute of Banking and Financial Services, and National Information Technology Authority Uganda. The association has also succeeded in raising funds for further development of the Fintech Ecosystem in Uganda. So far FTSPA has received funding from aBi Finance, International Trade Centre, and the Bill and Melinda Gates foundation. The association is also the founder member of the African Fintech Network and even went on to host the Africa Fintech Festival in 2019.

          Related to enhancing credibility, associations also ensure accountability. The industry through their association can agree on a set of standards against which every member would be evaluated and sanctioned in the event of a breach. FITSPA’s code of conduct and the National Payment Systems policy, legal and regulatory framework in place are benchmarks for this.

          Visibility and brand value are other benefits of associations especially to the small players. They leverage the platform of the association to tap into the networks of the industry and showcase their services at the lowest possible cost. Irrespective of the size and market share, all members of the association will have visibility at all the association events, publications and platforms. Being a member of FITSPA will open doors previously impossible to open because the small FITSPA members can leverage the FITSPA brand and networks.

          Associations provide a platform to access opportunities previously unimaginable especially for the small players. FITSPA has been able to mobilise funding and technical support that has and will continue to benefit its members especially the small members. For example, FITSPA was able to secure technical support from FSDU to develop a toolkit for preparing its members to understand the policies and apply for licenses under the National Payments Systems Act. The members supported each other and today, 15 fintechs have been licensed by the central bank, most of them being FITSPA members. Many other members have started the process to obtain licenses. For some of the small members, this is not a service they would have easily accessed outside the FITSPA membership.

          Five years ago, today’s fintech milestones would be a dream if fintechs big or small had attempted to achieve them solely.  But together so much has been achieved and more is yet to come. Like FITSPA, FSD Uganda in its role as a market facilitator has and will continue to support the growth and development of industry associations. Notable examples of such associations include the Uganda Bankers Association (UBA), the Uganda Insurers Association(UIA), and the Association of Microfinance Institutions of Uganda(AMFIU) all key players in the increase of meaningful financial inclusion.


          Ensuring Resilience in the Supply of Agricultural Finance amidst the COVID-19 Pandemic: Lessons from the Integrated Cooperative Model.

          Ensuring Resilience in the Supply of Agricultural Finance amidst the COVID-19 Pandemic: Lessons from the Integrated Cooperative Model.

            Download Toolkit

            COVID-19 disrupted the supply chains of the agricultural sector. Much as farming was one of the essential services that were exempted from the government lockdown measures, the distribution of the agricultural produce was limited due to restrictions on movement during the lockdown.

            Over the last decade there has been an increased emphasis on cooperative development which has resulted in exponential growth in the Savings and Credit Cooperative Organizations (SACCOs). However, SACCOs are insufficient in addressing the financing challenges of agriculture because they are limited in how far they can mitigate against the risks inherent in agriculture.


            Financial Sector Deepening Uganda’s Deal Flow Facility Partners with Asoko Insight as its Online Platform Provider

            Financial Sector Deepening Uganda’s Deal Flow Facility Partners with Asoko Insight as its Online Platform Provider

            Nairobi – Uganda’s leading financial inclusion think-and-do-tank, Financial Sector Deepening (FSD) Uganda and Asoko Insight, Africa’s go-to provider of business intelligence and digital engagement platforms, are pleased to announce a five-year partnership to facilitate deal flow in Uganda via the Deal Flow Facility (DFF).

            Funded by the European Union in collaboration with the Capital Markets Authority and incubated at FSD Uganda, the DFF is a technical assistance and match-making initiative designed to address the persistent gap in accessing growth capital for Ugandan businesses.

            By utilising digital technologies, the DFF creates a one-stop shop where businesses can access capacity-building support and capital, and investors can find a pipeline of investable opportunities.

            FSD Uganda aims to support over 220 Ugandan businesses to become investment-ready and close at least 40 debt / equity deals in the next five years via the platform, stimulating private sector growth and enabling direct and indirect job creation.

            Asoko Insight has been contracted to build the digital platform for DFF to support matchmaking between global investors and local businesses. Over the last two years, Asoko has created a vibrant opportunity marketplace on its Digital Engagement Platform, facilitating connections between African businesses and global and regional stakeholders offering financing and business support services.

            FSD Uganda will tap the same proprietary technology to build an online ecosystem of investors, companies, and transaction advisors to enhance private capital inflows to Ugandan businesses, joining a range of global Development Finance Institutions, multilaterals, development banks and private investors that have partnered with Asoko in pioneering digital technologies to connect with Africa’s private sector.

            “The DFF online platform is a key component of FSD Uganda’s mission to facilitate a conducive business environment for financial inclusion. By addressing structural barriers to private capital inflows and strengthening access to non-bank financing for Uganda’s private sector, the platform is expected to have a wide-ranging impact on the economy and support the nation’s strategic development plan,” Norah Koigi, Director of the Deal Flow Facility at FSD Uganda, said.

            “Our experience of digitising deal-making is illustrative of the transformative potential of technology to enable business growth across Africa. We’re excited to bring our expertise in creating digital platforms to bear with FSD Uganda, whose work makes an unparalleled impact on financial inclusion as a route to economic development,” Rob Withagen, co-founder, and Chief Executive Officer of Asoko Insight, said of the partnership.

            The DFF is sector agnostic and focuses on established companies with financing needs of $500K and above. Women and youth-led businesses that meet the criteria are especially encouraged to apply. Companies meeting the above criteria can express their interest here.

            About Asoko Insight
            Asoko Insight is Africa’s leading corporate data and engagement platform, providing global investors, multinationals, and development institutions the most effective route to discover, shortlist and engage their target universe of African companies.

            About FSD Uganda
            FSD Uganda is an independent, non-profit organisation that supports innovation, conducts research, and helps to promote and improve policy, laws and regulations that shape the financial sector towards a more inclusive financial sector with a focus on low-income individuals.

            For more information, contact
            Jennie Forcier Patterson
            Content Director, Asoko Insight

            Brenda Amony
            Portfolio Relationship Manager DFF, FSD Uganda


            Mitigating the Impact of Covid on Gains in Financial Inclusion

            Mitigating the Impact of Covid on Gains in Financial Inclusion

            By Jackie Kitiibwa

            COVID-19 has been a significant setback for the development plans of many countries. The global recession that has been developing alongside the ongoing health crisis has not only intensified existing inequalities but also threatens to set back decades of economic growth and poverty reduction in emerging and developing economies.

            The widespread lockdowns and social distancing controls employed as a necessary response to the pandemic led to massive disruptions that threatened to erode the gains made in financial inclusion. As a result, many segments of the population, households, and businesses experienced a significant loss of revenue and struggled to maintain their lifestyles or operations. According to the World Bank, 90 million people fell into extreme poverty globally in 2020. This is especially true for those at the bottom of the economic pyramid who were always a hospital bill, or fire away from falling into poverty and for whom the lockdown and resulting economic slowdown meant less income and increasing debt.

            An initial FSDU analysis of the impact of the Covid-19 pandemic on households showed that more than half of the adults in Uganda were unable to sustain their lifestyle during the lockdown, 28% had no coping mechanism, and almost a quarter would lose 100% of their income by the end of the lockdown1.

            The impact of the pandemic was felt excessively by women. Evidence from Uganda indicates that violence against women and girls intensified during the pandemic. Sexual violence, teenage pregnancy, and early marriages were seen to increase. In addition, a study by McKinsey2 suggests that women were almost twice as likely as men to have lost a job during the pandemic. This is due to many reasons, some of which include the over-representation of women in some of the sectors that were hardest hit like the retail industry, but also cultural and societal norms that necessitated women to stay at home whilst children were out of school.

            Also, Micro, Small and Medium Enterprises (MSMEs) were severely affected. Many enterprises downscaled to reduce operating expenses while others closed entirely. Consequently, there was a significant rise in unemployment. Furthermore, because the majority of paid workers are employed in the informal sector with no formal contracts or social security, most layoffs were done without terminal benefits.

            Even with the impressive adoption of technology seen during the pandemic, only a tiny fraction of the working population in the formal sector could successfully transition to remote work. Informal sector employees such as waiters, security guards, and drivers were unable to work from home. Additionally, the stimulus package established by Government to support households and firms was disproportionately urban-focused.

            To recover and build resilience after the COVID-19 pandemic, and to achieve greater financial inclusion, Government and the private sector need to:

            1. Promote the use of digital technologies

            The importance of digital access and digital skills for social inclusion has been evident to most over the past decade. However, a global pandemic has reinforced the need to examine gaps in our policies and the ground reality. New technologies have proven effective in increasing the use of regulated digital channels, but more needs to be done to improve access and use, particularly in rural areas where they are most important. The role of the private sector is critical in this global effort to expand opportunities and provide more options for millions of people.
            Since the pandemic, more people are managing their finances online; buying and selling on e-commerce platforms and social media; and finding work through the gig platform. Fintech and agritech companies offer highly targeted and customized products to different segments of the informal economy. They also create the building blocks of e-commerce and value chain eco-systems which do not currently exist or are highly inefficient and manual.

            For example, we have seen financial service providers offer digital micro-lending to small businesses within the value chains of large suppliers. Also, Fintechs are digitizing the agriculture value chain using cloud-based technologies to help cooperatives efficiently manage recordkeeping and their day-to-day operations and use these digital trails to offer credit to thousands of farmers.

            Obviously, all this should be supported by robust digital ID systems, mobile communications, and digital payment systems. In India, because the government had previously heavily invested in a universal ID programme – the government was able to quickly and safely send much needed social payments to hundreds of millions of Indians across the country during the pandemic.

            2. Effective deployment of capital

            Some of the measures Government instituted to minimise the adverse effects of the crisis to economic activity included expanding the lending capacity of key financial institutions like the Uganda Development Bank (UDB) and providing exceptional liquidity assistance to supervised financial institutions that were in distress. However, these financial institutions are never well-placed and do not have the incentives to serve the informal sector which comprises 87 per cent of the urban working population. As such, relief funds channelled through these large financial institutions did not reach low-income households or small businesses.

            To this end, Financial Sector Deepening (FSD) Uganda has partnered with the MasterCard Foundation to set up a Covid-19 recovery Fund out of which small businesses – primarily women and youth-owned or led – will access loans at concessional rates through Tier III and Tier IV financial institutions. The Fund not only aims to sustain small enterprises and protect jobs but also provide a more sustainable economic recovery way beyond the crisis.

            3. Leveraging cooperatives and other business collective groups as an inclusive economic platform

            Many cooperatives are engaged in agro-processing and value addition activities at different levels of the value chain. Most of these activities have significant backward and forward linkages to the informal sector. By leveraging the power of technology platforms, government, the private sector and development partners can bring together different players to enhance the productivity and incomes for smallholder farmers and Micro, Small and Medium Enterprises (MSMEs).

            These technology platforms have the potential to create economies of scale and scope resulting from cost savings and increase in aggregated production and increase in diversity of goods and services provided on the platform. Beyond providing agricultural inputs and business stock these platforms can provide small holder farmers and MSMEs with a wider range of services including education, healthcare, and digital merchant payments.

            Policy makers, regulators, development partners and financial sector players need to act fast in designing responses that are focused and make the most of available resources. In the right setting, supported by with an enabling environment – policy and regulation, solid and effective institutions, and appropriate consumer protection frameworks and empowered customers – these initiatives will help build back better from the economic devastation of the Pandemic while laying stronger foundations for future resilience and sustainability.


            1. FSD Uganda (2020) Assessing the Resilience of Ugandan Households Before Covid-19. – 
            2. McKinsey (2020) COVID-19 and gender equality: Countering the regressive effects.

            — This article was first published in the Financial Services Limited magazine —


            The Shared Agent Banking Platform is Increasing Financial Inclusion in Uganda

            The Shared Agent Banking Platform is Increasing Financial Inclusion in Uganda

            By Brenda Banura-Ssekalo

            Fast; there are hardly any queues. Convenient; agents are within the neighbourhood and open for longer hours than bank… These are some of the phrases customers use to describe agent banking. This is where bank customers can carry out transactions at contracted retail outlets known as bank agents. “I no longer have to spend money on transport to access the bank branch. My community now has an agent,” a customer in Eastern Uganda says. Thanks to shared agent banking, customers of one bank can make cash deposits and withdrawals at agents established and shared with another bank.

            Over four years since the first steps to create a shared agent banking platform, Financial Sector Deepening (FSD) Uganda is proud to report that as of 2022, 22 out of Uganda’s 25 commercial banks (Tier I) are part of the shared agent banking platform. This is in addition to one regulated financial institution in Tier II which category includes credit and finance companies.

            The journey to establishing a shared agent banking platform started in January 2016 when Uganda’s Parliament passed the Financial Institutions (Amendment) Act, 2016 which enabled banks to use agents to deliver their services across the country.

            In 2017, BoU released the agent banking regulations that provided a regulatory framework for agent banking services. The guidelines did not explicitly allow for a shared agent banking platform prompting the Uganda Bankers’ Association (UBA) to come up with the concept of a shared agent network within the existing agent banking framework, which concept BoU approved.

            UBA then approached FSD Uganda to bring the idea to fruition. Recognising the potential of this industry-driven initiative – the impact it would have on formal financial inclusion, customer choice and market competition, FSD Uganda was quick to come on board along with Consultative Group to Assist the Poor (CGAP), a think tank within the World Bank. The possibility of extending the reach of
            the financial services to the underserved, underbanked, and unbanked in rural, remote, and frontier markets made this worthwhile for FSD Uganda.

            FSD Uganda’s role in making the platform operational
            To get the process started, FSD Uganda brought together several banks interested in joining the platform, working with the industry to create a robust governance and participation framework, technical standards, and business model.

            In addition to providing technical assistance, FSD Uganda supported the initial set-up personnel required to establish the Agent Banking Company and the platform. FSD Uganda provided grants that helped to hire the project manager, oversee the project, develop the training curriculum that set the standards for agent recruitment and management for all banks, and train bank staff in deployment of the solution.

            Our initial support and the credibility of the agency helped crowd-in the support of multiple development partners and secure financial commitments towards providing further technical assistance to the initiative.

            On 25 April 2018, UBA launched the shared agent banking network with only two banks. The increase in the number of participants to 22 by 2022, saw 20,463 agents join the shared agent banking network. The platform has cumulatively processed 4.6 million transactions valued at UGX 5.14 trillion (USD 1.4 billion). 533,532 customers with bank accounts were served between January
            2020 and December 2020.

            Impact of the shared agent banking platform
            These numbers show that a shared agent banking network has significantly contributed to deepening access and enhancing the use and uptake of financial services even in rural areas, a key outcome for FSD Uganda. For example, an FSD Uganda study in collaboration with UBA and Uganda Christian University shows that between October 2019 and December 2020, the total number of agents in Hoima and Mbarara grew by 90%, and active agents by 69%.

            Through this network, competing banks ride on a shared technology platform and rather than competing on the reach of their agent networks, these banks compete on price, products, and agent and customer satisfaction. Agents on the platform provide various services such as cash deposits and withdrawals, inter-bank transfers, utility payments, and statutory payments among others. The reduced cost of service delivery enables banks increase their reach, a win for enhancement of financial inclusion. Ease of operation also broadens customer choice and shifts market competition from reach to quality of service.

            Varghese Thambi, CEO of Diamond Trust Bank (DTB) considers the platform advantageous because it significantly reduced the cost of reaching DTB account holders and general customers in  the banking sector.

            This innovation has helped banks to serve under-served populations better by facilitating Ugandans to open accounts with participating banks from their neighbourhoods. This is especially so in the urban and peri-urban areas where 95% of the agents are based.

            In the rural areas, the shared agent banking network has enabled the proximity of access points to women who are less likely to be financially included than men and created income opportunities for youth and rural populations to serve as agents.

            The future of the shared banking agent platform
            At the time of establishing the shared platform, Uganda’s mobile money had matured so much that the mobile money agents outnumbered bank branch and Automated Teller Machine access points by nearly 100 times.

            A go-ahead to establish the shared platform gave financial institutions an opportunity to level up to the telecommunication companies. To achieve this, several things must happen. Connectivity infrastructure needs to be improved, and pricing models and stakeholder compensation need to be integrated, among others. The participating financial and non-financial institutions and agents being
            on-boarded also need to increase.

            A few banks reported closing some of their branches which are more expensive to operate to focus on enhancing financial access through the platform. As more agents sign on to the shared agent banking platform, the program will work to deploy at least 615 agents or more for every 100,000 people.

            The shared agent banking network still has a long way to go, especially in rural and remote areas where most that are financially excluded reside. But the journey has begun and by the look of things, it will only go forward.

            For more information, read FSD Uganda’s ‘Making elephants dance’ – The pioneering journey of Uganda’s shared agent banking network.


            Highlights on Agent Banking Services in Western Uganda (Mbarara and Hoima Districts)

            Highlights on Agent Banking Services in Western Uganda (Mbarara and Hoima Districts)

              Download Case Study

              This report assesses uptake and usage of agent banking and the effect of COVID-19 on shared banking services in two districts, Mbarara and Hoima. The research was conducted by Uganda Christian University in partnership with Uganda Bankers’ Association (UBA) and the Agent Banking Company (ABC) Uganda Ltd.

              Through this initiative, Financial Sector Deepening (FSD) Uganda is facilitating collaboration between local industry associations and universities to promote contextually relevant research. The study is part of FSD Uganda’s industry capacity building programs reinforcing that industry associations play a critical role in advancing and developing inclusive financial markets.


              Executive Announcement: Meet FSD Uganda’s new Executive Director

              Executive Announcement: Meet FSD Uganda’s new Executive Director

              We are pleased to announce that Financial Sector Deepening (FSD) Uganda has filled its open position on the leadership team. Patrick Oketa joins us as the Executive Director – he will lead the development and oversee the delivery of FSD Uganda’s key programmatic initiatives.

              Patrick is a seasoned banker, economist, and finance professional with experience in debt investing, private equity, development banking and advisory. He has over 20 years of experience working to deploy capital to businesses which have the potential to positively change the livelihoods of Uganda’s most vulnerable communities.

              Patrick most recently worked as Managing Director at Aval Capital. His experience includes roles with Development Banks such as: the African Development Bank, East African Development Bank, and the Uganda Development Bank. He has also in the past worked for Actis, Acumen and Pearl Capital as Director and partner.

              He brings a wealth of experience in the management of capital flow across the entire ecosystem. He has worked with diverse multinational teams and has earned deep credibility as a trusted advisor and partner with a myriad of stakeholders in both private and public sector.

              Patrick is passionate about financial inclusion and impact investing. He is an ardent advocate for the increase in the role of the financial sector as a contributor to the national GDP of Uganda with a belief that this could exponentially improve the livelihood of millions of Ugandans which fits in well with FSD Uganda’s vision and mission.

              He holds a Bachelors’ Degree in Economics, Masters in Banking and Finance and an MBA.

              We are excited to have him on the team and look forward to the work we are going to accomplish together.


              Our Donors & Partners

              Bill & Melinda Gates Foundation logo
              European Union Logo
              Mastercard Foundation Logo
              Report a concern anonymously


              Subscribe to our PUBLICATIONS

              OUR CONTACTS

              Plot 7A, John Babiha (Acacia) Avenue, Kololo
              P.O. Box 608 Kampala, Uganda
              TEL: +256 393 231260/2

              © Copyright FSD Uganda 2015 – 2022. All Rights Reserved.