Red Pepper Uganda

POSTBANK, POSTA UGANDA LAUNCH JOINT PROJECT

The International Fund for Agricultural Development (IFAD), PostBank Uganda
(PBU) and Posta Uganda recently launched a project aimed at offering low cost
remittances and access to financial inclusion across the country.
The project dubbed, “Scaling up Remittances and Financial Inclusion in Uganda,”
will provide remittance services in poor rural communities as well as in refugee
settlements, many of which are taking in those fleeing conflict and food insecurity in
neighbouring countries.
The Minister of ICT represented by the Commissioner in the ministry of ICT and
National guidance, Moses Watasa and state Minister for Finance, Gabriel Ajedra
graced the event that took place at the Post Office outlet in Masindi District.
Watasa pledged government support to PostBank and Posta Uganda towards the
success of the project especially disseminating information to the rural communities.
Ajedra applauded IFAD and requested the two institutions to ensure the project
benefits the rural communities. He further noted that having rural people access
formal financial services is key to national development and will go a long way in
reducing poverty levels in the country.
James Arinaitwe, the Managing director, Posta Uganda said the objective of this
project is to lower the costs of provision of remittances services and to increase
accessibility to remittances linked financial products and services.
PostBank Managing Director, Stephen Mukweli said, “We are grateful to IFAD for
the support, this project will go a long way in empowering our communities and soon
customers will be able to access financial services from Posta outlets through the
agency banking model.
Under this project, PostBank Uganda will leverage Posta Uganda’s broad network of
rural post offices to expand access to financial services for the rural population. The
post offices will be equipped with modern digital and mobile technologies for
remittance delivery and financial services transactions, and postal staff will receive
specialized training.

Projections
By March 2019, the project aims to increase the number of remittance recipients it
serves by 50,000. In addition, it expects to provide remittance delivery services to
20,000 refugees as well as training in financial literacy.
IFAD representative Mauro Martini said, in a country where the cost of sending and
receiving remittances is still very high (above 12%), this partnership aims to reduce
transaction costs of sending money home to 3% (the Sustainable Development Goals
target) and eliminate all corridors (for example between the United States and

Uganda) above 5 per cent. It also expects to increase accessibility to remittance-
linked financial products and services.
Globally, about 40 per cent of remittances are sent to rural areas where the majority of
poor people live. This money is spent on food, health care, better educational
opportunities and improved housing and sanitation. Remittances are therefore critical
to help developing countries achieve the Sustainable Development Goals.
The project is an outcome originating from the African Postal Financial Services
Initiative, a program managed by IFAD jointly with the World Bank, Universal Postal
Union, United Nations Capitol Development Fund, and World Savings Banks
Institute and co-financed by the European Commission. The Initiative helped expand
the role of postal networks in 11 African countries in delivery of remittances and
access to financial services.

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