KAMPALA – Uganda is deemed one of the most entrepreneurial nations in Africa; several businesses continue to offer the opportunity. Mobile money business is one of such.
A quick reflection on financial service, mobile money remains one of Uganda’s most sought for fintech solution.
The number of mobile money agents has grown by 49,488 in two years, according to data from Uganda Communications Commission (UCC).
The report indicates that 8,500 new agents were added to the network between the second and third quarter of 2020, adding to the more than 227,736 agents that operate across different networks.
MTN has the biggest share with an agent network of more than 109,000 agents operating across the country.
The growth is partly due to the shift to digital transactions that registered rapid growth during the Covid-19 related lockdown.
A study conducted late last year indicated that more than 614 businesses adapted digital technology as a survival tactic during the period.
Mobile money has been one of the biggest drivers of the cashless economy and financial inclusion attributed to increased mobile penetration.
The growth signals the significance of mobile money to the economy.
Mr Paul Lakuna, a research fellow at the Economic Policy Research Center, said yesterday the telecom sector has been integral in Uganda’s growth story, and Covid-19 has made it more apparent for a complete shift.ADVERTISEMENT
“We need to depend on telecoms for a lot of things including e-commerce for those selling online and sending for delivery via motorcycles,” he said, adding that the sector has the potential to create more jobs.
A 2018 Finscope survey undertaken by Financial Sector Deepening Uganda found that 78 per cent of Ugandans are financially included mainly through mobile money.
Experts say financial inclusion is one of the major drivers for growth particularly in sub-Saharan Africa.
Financial inclusion not only enables trade but also ensures that people can save for the future, access credit and manage their finances.
Mobile money has bridged the inclusion gap by taking these financial services closer to the people through providing accessible services.
affordable and a convenient way of accessing financial services using a mobile phone, anywhere at any time.
To bridge the gap, the soaring mobile money agent base also has played a key role.
The growth in mobile money agents also correlates to the growth of transactions.
In Uganda, according to data from Bank of Uganda, the value of mobile money transactions grew to an all-time high in December, capping the year at 28.2 per cent in 2020 compared to 2019.
The number of mobile money transactions, the report noted, grew by 25 per cent during the same period.
The Central Bank noted mobile money transactions grew to 3.5 billion in 2020 compared to 2.8 billion in 2019. Value of transactions rose to Sh 93.7 trillion in 2020 compared to Shs 73 trillion in 2019.
In 2020, telecoms saw transactions grow to double digits month-on-month having recorded Shs10.3 trillion in value of transactions in December.
Deposits and withdrawals equally grew to Shs 2.5 trillion month-on-month from an average of Shs1.5 trillion in 2019.