The Independent Uganda: You get the Truth we Pay the Price
In Uganda, now almost all banks have built partnerships with the telecom companies offering mobile money, to offer their customers what they have termed the ‘mobile wallet’ enabling them to transact business on phone.
Fuel companies have introduced a fuel card enabling customers to fuel at their petrol stations without paying in cash.
According to Leopold Tzeuton, who was managing director when Total Uganda introduced the card 15 years ago, the card offers the customer five advantages including security, analysis, services, control, and network.
Challenges ahead
Despite these advances, the number of people who remain financially excluded is enormous.
A paper by Bank of Uganda says like all other Third World countries, illiteracy is a major challenge in the development of financial technologies in Uganda. It is hence common to find people stuck at ATM machines because they can’t follow instructions and always seek assistance from askaris or fellow customers some of whom may be fraudsters. This has led some banks to develop ATMs with operating instructions in a vernacular.
Mutebile, also cites regulatory challenges and says that if more radical mobile banking business models are eventually developed in which mobile money becomes a substitute for demand deposits in banks, the ability of central banks to control interest rates could be undermined. This is because central banks control short term interest rates by varying the liquidity available for commercial banks to meet their reserve requirements.
“Mobile money may also affect the velocity of circulation of money: In principle one might expect velocity to rise if mobile money makes retail payments transactions easier for customers,” Tumusime said.
For Atwine the biggest challenge is the slow speed of doing business in Uganda, including contracts that “take forever to negotiate”.
“There is no proper investment for innovators to tap into and there’s no support system. Countries around the world are actually working very hard to tackle these problems but African countries seem to be laid back. For example, countries like UAE, France, Canada, Taiwan, etc are setting up projects to entice talented entrepreneurs from around the world. They have noticed that for their economies to grow, it is no longer about coal and industries. This is a digital revolution and those who stay ahead will win,” Atwine says.
As for Uganda, he adds that as an entrepreneur the biggest issue is funding. Also, the ecosystem is broken and young people do not have the skills required.
“So we have a lot of work to do,” Atwine says.
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editor@independent.co.ug
