FSD UgandaBuilding trust, reducing friction, and expanding inclusion through digital public infrastructure
A more inclusive digital economy depends on more than access to technology. It requires systems that are trusted, interoperable, and able to serve users across the entire financial ecosystem from large financial institutions to Tier IV providers and low-income consumers at the last mile.
FSD Uganda’s Digital Economy pillar focuses on reducing friction and strengthening trust through digital public infrastructure (DPI). DPI refers to the shared digital systems such as payments, digital identity, data Exchange, and fraud prevention that make financial services safer, faster, and more accessible.
Through this work, FSD Uganda supports stronger interoperability, better consumer protection, improved fraud prevention, and more efficient movement of data and payments across the financial ecosystem. The goal is to ensure that digital financial services are not only accessible, but also trusted, affordable, and inclusive for all Ugandans.
In 2025, this work focused on strengthening the foundations that enable the ecosystem to function better. This included supporting the review of Uganda’s National E-Payments Strategy, strengthening fraud prevention systems, improving fintech participation in the payments ecosystem, and expanding low-cost investment opportunities for ordinary Ugandans.
Strengthening the payments ecosystem
As digital payments continue to grow, the sector faces a new challenge: ensuring that growth translates into affordability, trust, and real usage.
FSD Uganda supported the Bank of Uganda in conducting the end-term review of the National E-Payments Strategy (2021–2026), which was designed to support Uganda’s transition toward a cash-lite economy.
The review showed strong progress on the supply side. Legal and regulatory frameworks improved, payment infrastructure expanded, and innovation accelerated. However, these gains did not automatically translate into stronger usage. Persistent reliance on cash remains driven by demand-side barriers such as high transaction costs, low transaction limits, limited digital literacy, and weak consumer trust.
The review also highlighted the absence of a national switch, which continues to contribute to market fragmentation, higher costs, and inefficient cash-in cash-out processes. At the same time, rapid growth in digital payments has increased exposure to cyber fraud, reinforcing the need for stronger consumer protection and faster redress mechanisms.
These findings reinforce an important lesson: infrastructure alone is not enough. Digital payments scale when users trust the system, understand its value, and can use it affordably.
Expanding inclusion beyond formal banking
For digital public infrastructure to drive inclusion, it must work beyond banks and large regulated institutions. It must also serve Tier III and Tier IV providers, fintechs, SACCOs, and the wider ecosystem where most underserved users interact with financial services.
In 2025, FSD Uganda supported The Financial Technology Service Providers Association of Uganda (FITSPA) to develop Third-Party Guidelines for Fintechs operating within the National Payment Systems framework.
Many fintechs continue to face overlapping licensing requirements, restrictive partnership models, and limited pathways to work legally and efficiently with regulated institutions. The proposed guidelines provide a clearer framework for licensed fintechs to partner with third-party providers while improving compliance and reducing barriers to innovation. The guidelines were finalised and submitted to the Bank of Uganda for ratification.
This work is important because inclusive digital finance depends on an ecosystem where smaller providers can participate safely and competitively not only where large institutions dominate.
Protecting trust in the digital financial system
As digital finance expands, trust becomes a public good. Fraud, weak data protection, and poor customer redress can quickly undermine adoption and confidence.
In 2025, FSD Uganda and the Uganda Bankers Association advanced Phase II of the Cyber Security Operations Centre (CSOC). While Phase I focused on establishing a fraud incident reporting portal, Phase II expanded this into a stronger shared defence system for the financial sector.
This work provided the foundation for the launch of the Financial Sector Anti-Fraud Consortium (FS-AFC), Uganda’s first cross-sector alliance against financial fraud.
Adoption of the fraud incident reporting portal expanded from 21 member banks to 59 Bank of Uganda supervised financial institutions, including banks and payment service providers, with active participation from regulators and enforcement agencies.
This demonstrates how targeted investments in shared infrastructure can create broader system resilience and improve confidence across the market.
Strengthening consumer protection and data privacy
Trust also depends on how well consumers are protected and how safely personal data is handled. FSD Uganda supported the Personal Data Protection Office to develop a professional curriculum on data protection and privacy, aligned to the Data Protection and Privacy Act (2019).
The project addressed a growing skills gap as institutions sought to comply with new legal requirements but lacked trained personnel. It concluded with a Training of Trainers programme that certified 40 professionals who can continue to support data privacy capacity building across the sector.
Alongside this, FSD Uganda continued engagement with regulators on stronger customer redress mechanisms, consumer protection standards, and financial literacy.
As digital finance grows, consumer trust will depend not only on access, but on confidence that systems are fair, secure, and responsive when problems arise.
Expanding access to investment opportunities
Financial inclusion must go beyond access to payments and savings. It must also help people build resilience, plan for the future, and grow wealth over time.
FinScope Uganda 2023 shows that more than seven in ten Ugandans have no concrete long-term financial plans, only 11 percent are satisfied with their financial situation, and 60 percent are not confident about financial security in old age.
These findings point to an important gap: many low-income Ugandans remain excluded from safe, formal investment opportunities.
In 2025, FSD Uganda supported the Ministry of Finance and Bank of Uganda in launching Okusevinga, a mobile government securities platform that allows retail investors to buy and sell government securities using mobile phones.
With a minimum investment of UGX 10,000, the platform significantly lowers the barrier to entry for government investments and opens access to a market that has traditionally been limited to higher-income investors.
Okusevinga demonstrates how digital public infrastructure can support not only financial inclusion, but also wealth creation and broader participation in capital markets.
Looking ahead
The digital economy is no longer only about digitising transactions. It is about building systems that are trusted, connected, and inclusive.
In 2026, FSD Uganda will continue to support stronger interoperability, broader inclusion of Tier III and Tier IV institutions, improved consumer protection, and shared infrastructure that reduces fraud and strengthens resilience across the financial sector.
The focus will remain on ensuring that digital public infrastructure works not only for large institutions, but also for smaller providers and low-income users at the last mile.
The objective is clear: to make digital financial services safer, more affordable, and more accessible for all Ugandans.
