Before I give my brief address, allow me to thank the FinScope Team, the Economic Policy Research Centre (EPRC), Uganda Bureau of Statistics and FinMark Trust for having successfully implemented the Uganda FinScope III (2013) survey. I am particularly grateful to DFID for the significant role they have played in providing the necessary funding for the survey. The Bank of Uganda continues to show much appreciation for the support that DFID has given towards increased financial inclusion in Uganda.

FinScope surveys are being implemented in a number of African countries with the ultimate aim of covering the entire continent. The stated objective of FinScope surveys is to determine the levels of access to, and use of, financial products and services by adult population 16 years or above.

Understanding access and use of financial services is paramount for policy making toward the improvement of the performance of the financial systems on the African continent. The ultimate goal of FinScope surveys is to contribute to the understanding of how a larger proportion of the adult African population can be formally financially included.

Increased financial inclusion can be achieved through opening bank accounts, increasing the level of savings and investments and securing loans from formal financial institutions, which are registered and regulated.

In an effort to improve financial intermediation in the economy the central bank has implemented a series of banking sector reforms like;

  • Capital Account Liberalization (1997)
  • Microcredit Deposit Taking Institutions Act (2003)
  • Lifting the licensing of banks (2007)
  • Financial Institutions Instrument (2011) (revisions of minimum capital)
  • Financial Consumer Protection Guidelines (2011 as amended 2013).

Some of the findings from this 2013 FinScope survey have shown that we might need to accelerate our reforms or perhaps review them. To quote only two results from the survey we see that;

A relatively small proportion of adult Ugandans, i.e. 20 percent or 3.4 million adult Ugandans are the only ones currently using the formal financial institutions including banks. The low level of using formal institutions (i.e. commercial banks, MDIs and credit institutions) is reflected in the recorded low levels of savings, borrowing and access to formal insurance.

Clearly, there are some economic implications arising from this situation and Bank of Uganda is committed to studying the results and providing further guidance for improvement.

Tremendous improvement has been recorded in financial access through the non-bank formal institutions and outlets including SACCOS, Micro Finance Institutions, FOREX Bureaus, Insurance companies as well as mobile money.

Mobile money services have contributed over 90 percent of the growth of these channels put together. Mobile money services could be improved further by linking to formal banks through new innovative products which can increase access and use of financial services in Uganda.

It is also important to note, that SACCOs are growing as an important avenue for improving the number of adult Ugandans holding accounts. Hence, reviewing the regulation and product structure of mobile money services and SACCOs could enable a larger proportion of adult Ugandans to access formal products and services. This may be achieved through account holding, savings and investment, credit and borrowing as well as insurance uptake, thus facilitating greater financial inclusion in Uganda.

The Bank of Uganda welcomes well researched evidence on the performance of the Ugandan economy. Therefore we look forward to receiving a detailed FinScope report which can help us to work towards assessing the kind of steps we need to take in order to improve financial deepening in Uganda.

This is a summary of the keynote address from the Bank of Uganda at the Launch of FINSCOPE III Survey Report on November 28, 2013 at Kampala Serena Hotel


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