Uganda: Bank of Uganda Says Mobile Money Charges Are High

Nov 29, 2017 | The Monitor; All Africa

Bank of Uganda says mobile telephone companies' financial services charges are high.

"The charges are high; that is for sure," BoU Director for Commercial Banking, Mr Benedict Ssekabira, said on Tuesday at Parliament in Kampala. "Even for moving money from one person to another, the charges are high." Mr Ssekabira said no one can be happy with such high charges. He was part of a team of BoU officials who were appearing before the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) to respond to various questions. During the sitting, COSASE vice chairperson, Anita Among, asked BoU why mobile telecommunications companies, which, besides voice calls and data, also provide financial services such as money transfer and lending. The Financial Institutions Act restricts money transmission to banks. MTN, whose customers constitute close to 70 per cent of Uganda's mobile phone users, charges its customers between Shs500 - 2, 500 and Shs2, 000 to send between Shs2 million and Shs4 million. On the other hand, Airtel Uganda, the second largest by customers base, charges Shs450 to send between Shs500 - Shs5, 000 and Shs1, 000 to withdraw between Shs5, 001 - Shs500, 000. The charge to withdraw up to Shs5, 000 on Airtel Uganda is Shs300 whereas the charge to withdraw between Shs5, 001 - Shs30, 000 is Shs800. The charges for commercial banks vary. To engage in mobile money, the telecommunications companies deposit money on escrow accounts in commercial banks. The banks then deposit money at an agent's location. For MTN to engage in lending money, it had to do it in partnership with a commercial bank, as BoU had advised it. However, BoU deputy governor, Dr Louis Kasekende said a law has been drafted [by the First Parliamentary Counsel] to include regulation of mobile money. "What are we [BoU] doing? The principles behind payments have already been drafted and agreed," Mr Kasekende, said. "It will be submitted, most likely this week, to the Cabinet. We have also recommended that the Bank of Uganda Act be amendment so that it is very clear as to who had the mandate of regulating the payments." He said it is work in progress adding that when the law is passed, it would address all the gaps that have been identified. Source: All Africa