Uganda: Agency Banking Will Deepen Financial Inclusion

Jun 27, 2017 | The Observer; All Africa

Agency Banking is one of the new provisions of the Financial Institutions (Amendment) Act 2016 and will be a key driver of increasing financial inclusion in Uganda.

As a signatory to the Maya Declaration, this demonstrates the government's commitment to serve the unbanked. The declaration is an initiative by the Alliance for Financial Inclusion (AFI) to help unlock the economic and social potential for an estimated two billion unbanked people around the world. According to the draft Agent Banking Regulations (2016), agent banking is defined as 'the conduct by an entity of financial institution business on behalf of a financial institution as may be approved by the central bank'. It is a component of Digital Financial Services (DFS) based on digital and mobile solutions which have revolutionised financial systems around the world. These solutions have increased efficiency, convenience and consumer options. In emerging and developing economies like Uganda, digital financial platforms, notably mobile money, have not only changed the financial landscape, but have also provided an avenue for financial inclusion to millions of previously excluded people into the formal financial ecosystem. The GSMA, an umbrella trade body bringing together mobile operators worldwide, states in its 2015 industry report that mobile money services are available in 93 countries through 271 services and reach over 400 million people. Agents are the backbone of mobile money services, providing the much-needed arm's length connection to customers. According to the World Bank's most recent Uganda Economic Update, 'Step by Step: Let's Solve the Finance Puzzle to Accelerate Growth and Shared Prosperity, 2017', financial services have expanded rapidly in Uganda over the past decade with approximately eight mil- lion adults now having access to an account at a formal financial institution. Read more on All Africa. Source: All Africa