- We want more Fintechs to offer financial products
- Financial institutions should innovate services that suit the vulnerable
- Inclusive formal savings are key for low-income people to build resilience to cope with unexpected shocks
Bank Of Uganda Deputy Governor Michael Atingi-Ego is appealing to financial institutions to come up with services that meet the demands of Ugandans to ensure that Women and youth are included in the financial system to be empowered.
This was while speaking as Key-note speaker, during a stakeholder workshop, organized by Scale2Save, a program that establishes the viability of low savings accounts among the vulnerable.
“We are emphasizing the aspect of social economic transformation through financial inclusion. We want to ensure that banking services are delivered to those who are financially excluded through the provision of digital savings credit. We do not need more bank branches countrywide, we need more banking services to reach the people” said Michael Atingi-Ego.
The event brought together key stakeholders in the Ugandan financial ecosystem to share knowledge with a joint call to action with steps that ensure financial inclusion in Uganda.
Weselina Angelow, the Scale2Save, Programme Director, noted that commercial banks should not only be restricted to only serving high-end market players but also the low end informal players.
“We as the banking sector sometimes have difficulty in understanding because branches are in the urban space while low income, under served people are in the rural spaces and so we see that the microfinance oriented institutions that have a more local footprint, that are closer to the customer have a better understanding of their needs”
She added that, “it does not mean that retail banks and larger financial institutions cannot serve this market as well. There is an opportunity for all market players but in order to understand customers, financial service providers need to talk to them coupled with research that can be collected.”
While saving in an effective and secure manner can open many doors to prosperity for the most vulnerable, inclusive formal savings are key for low-income people to build resilience to cope with unexpected shocks but also be empowered to create employment and boost economic activity, as highlighted during the dialogue.
With over 70 percent of enterprises informal, it emerged that digital technologies offer financial services at lower costs, fostering opportunities for large-scale inclusion by enabling institutions to serve lower income earners including, the marginalised, ultrapoor and refugees to create employment, taking note of the fact that shared platforms do also act as a catalyst in agri-value chains for inclusion.
Grace – Nshemeire Gwaku, the Chief Operations Officer at Private Sector Foundation Uganda (PSFU) an apex body of about 300 business organisations noted that e-commerce is slowly formalising the informal sector while banks remain laid back, caged by bureaucracy and risk.
“We are asking banks, this is Africa, this is Uganda, find us solutions for our market, you know our market, how we behave and live. Someone has an address and a financial transaction on mobile money which is enough to get their history”.
These she says, are barriers to the informal sector even as one million youth turn eighteen to join an informal labour force in need of financial services which are not available because banks are not disruptive enough to innovate suitable products for them.