Telecom companies are rising to the occasion to increase financial accessibility in Uganda. Although estimates indicate one in every thre" />

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June 23, 2024
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Digital financial services deepening financial inclusion – MTN enable access to affordable finances

Telecom companies are rising to the occasion to increase financial accessibility in Uganda. Although estimates indicate one in every three Ugandans has a bank account, financial penetration in the countryside remains a major problem.

Telecommunication companies like MTN Uganda have stepped up to bridge the gap by offering various platforms to underserved communities.

Uganda’s journey to achieve adequate access to affordable financial services has over the years been rocky due to a number of structural and institutional bottlenecks.

Digital financial services, however, are playing a pivotal role in plugging this divide as various institutions and telecoms are now partnering to enhance access to financial services especially for the unbanked. Financial products Like Mokash have helped reverse the trends.

MTN Uganda in partnership with banks issued over 4.7 Million loans worth UShs. 435 Billion in 2020 alone. 

Stephen Mutana, MTN Uganda’s general manager for mobile Financial services says;

“The system has recorded a high uptake for credit as it allows for structured payments within a period of thirty days. Over 2.5 Million customers have saved nearly UShs 16 Billion on the platform.”

Clare Muhindo, a resident of Kira Municipality in Wakiso testifies to the quick credit relief afforded by the facility which she has used since 2016.

“It always comes in handy when I am not able to access cash, day or night and I pay back as soon as I can. My loan limit keeps growing because of my good pay back culture.”

A big enabler for digital Financial inclusion is access to mobile phones. By June 2020, 39 people out of every 100 Ugandans had no access to a communication line signalling low mobile penetration in the country.

Uganda has one of the least number of people with access to a mobile phone compared to her East African counterparts. Currently the Uganda Communications Commission estimates there are 6.96 million smartphones and 17million feature phones in the country.

But with Telecoms like MTN furthering mobile penetration, financial inclusion levels are expected to increase in coverage thus bringing many into the money economy.

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