Uganda: new report cautions banks on agent banking

Apr 24, 2017 | The Monitor; All Africa

The study also shows that almost 80 per cent of the potential market is in rural areas and as such costs will play a great role in determining the success of this model.

The demand and supply side survey report for agency banking, which was launched at Kampala Serena Hotel last week, was produced by Financial Sector Deepening Uganda (FSDU) in partnership with Microsave. It gave an industry insight to enable the different sector players to plan for the new wave of interventions that will enable them make money but also increase financial services across the country. Mr David Cracknell, the global technical director Microsave - an international financial inclusion consulting firm, said banking systems in Uganda are highly concentrated in urban areas and as such not spread out to some parts of the country which makes agent banking a means to an end. However, he warned that it should not be very expensive for the people to use because it will discourage them from using the service. "If you do not make it easier with Agency banking, it will fail. For the model to become successful, you need to have many people on the platform-costs will be much lower," he said. He added: "The higher the number of people using the service, the lower the costs involved and the lower the number of people using the service the higher the cost of service which hampers growth of Agency banking." The study also shows that almost 80 per cent of the potential market is in rural areas and as such costs will play a great role in determining the success of this model. Read more on All Africa. Source: All Africa