When you move around the streets of Kampala, it is evident that Ugandans are more connected to the web through their mobile phones. This has also risen to more innovation in the financial and telecom sectors that has led to incorporation of mobile money services into the existing banking services. Unfortunately, Uganda currently has no clear policy regulating all digital platforms which according to Henry Mbaguta the assistant commissioner financial service department in the Ministry of Finance has resulted into rampant fraud.
“In the financial sector, if you don’t have appropriate policies, regulations and guidelines– there will be a tendency to encounter issues of fraud, issues of mismanagement and these are issues that could be addressed in a regulatory frame-work that should drive saving mobilisation” he said. The policy is expected to increase financial inclusion by 15 percent in 2020.
“We’ve also been in the process of enacting the national payments policy and law. Key is this is to make sure that we are able to provide a licensing and supervisory framework for the various platforms” he added.
Under the same arrangement, the rural poor will have access to small phones at subsided rates and enjoy digital financial services. Mr Mbaguta says that when we go deep in the community smartphones are not a privilege for everybody and he feels that they must make sure that mobile money serves the purpose, it should be done through some from of subsidization.
According the executive director of Micro Financial institutions in Uganda (AMFIU), Jacqueline Mbabazi, says the policy if formulated, will increase the transaction levels and ease access to credit. “In Uganda the use of mobile banking and the digital the digital financial services is still a bit of a grey area. It is something that we are encouraging people to increase outreach, reduce costs, make it easier for the customer to use. But there are many other things to work on. For instance to encourage a customer that if you play your loan, using the mobile phone, its is cheaper. But some clients also still have this attitude of, am I sure it will get there?”
It is clear that technological innovations are increasing piling pressure on regulators and government, to adapt to new trends to remain relevant.