Mobile Money Transactions Hit a Record Ugx 18.6trillion

2217 Views Kampala, Uganda

In short
The facility introduced four years ago has grown rapidly across the country offering companies a possibility to tap a market where many people do not have bank accounts.

Transactions across all Mobile Money schemes in Uganda have hit a record Ugx 18.6trillion, in the fourth year of the service, the latest Bank of Uganda (BOU) Annual Supervision Report 2013 indicates.

This represents a 59percent growth from the Ugx 11.7trillion transactions recorded in 2012.

The facility introduced four years ago has grown rapidly across the country offering companies a possibility to tap a market where many people do not have bank accounts.

Across the country, kiosks can be seen by the road side and trading centers, advertising the availability of mobile money services.The service allows a subscriber to pay for goods, services and utilities, make deposits and withdraw cash from authorized agents using the mobile phone.

The Economic Policy and Research Centre (EPRC) in November 2013 released a report on financial inclusion in the country whose main highlight was that Mobile Money services had contributed a reduction in the percentage of adults excluded from financial services.

Musa Mayanja Lwanga, a Research Analyst at EPRC explains that even the tax 10% levy imposed on Mobile money transactions by the government, did not affect the growth. Instead number of Mobile Money users surged by 65percent to 14.3million in 2013.

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MTN Uganda remains the largest provider of the service with 5million subscribers in 2013. “The popularity and growth of MTN Mobile Money supported by a large agent network exceeded 30,000 agents and significantly increased financial inclusion of the unbanked,” says Mazen Mroue the MTN Uganda CEO.

Lwanga from EPRC says that in the future this will change as the banking sector will be integrated with Mobile Money and even salaries could be paid using the platform.

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In Kenya where this platform is more popular than it is in Uganda, people get to access loans, banking services and pay for the pension using mobile money. It has continued to facilitate trade in Kenya with some shopkeepers also accepting the service. In Uganda, its potential has not been reached, but if it is to branch out to offer banking like services, it has to be regulated.

Currently regulation of the service is still blurred and tends to oscillate between Bank of Uganda (BOU) and the Uganda Communications Commission (UCC), with none openly pointing out what they do.

The best BOU could in 2013 was to issue guidelines. “The guidelines specify the minimum standards expected for conduct of mobile money services,” reads the BOU Annual Supervision report. The Annual Police Crime Report 2013 revealed that Uganda lost about 18.1billion to cyber crime, which includes Mobile Money fraud.