Courtesy of a report, done by Equity Bank, made available to Tekedia , we are happy to provide where Uganda stands today:
- Three telecoms are engaged in MM services in Uganda since Q1 2009
- Approx. 1.5Mn subscribers since inception with > 1000 transaction points countrywide
- Ugx. 3Bn transferred per month
Market status
- Population of 33M; 9M registered mobile subscribers – 27%
- Banking penetration (5M bank account holders) – 15%
- Bankable population: 18M
- Young Population; 80% employed in non-formal sector
- Purchasing Parity – $1,300 (Est)
- 90% of existing money transfer agent revenues from international transfer
services; local transfers are hugely untapped
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- 3 existing Mobile Money products not providing full banking services
- No inclusion of MM subscribers to the regulated financial sector
Market Requirement
- Mobile Money Agent outlets do not have sufficient float – multiple visits
required to replenish
- Higher thresholds– Ugx 1,000,000 too low for businesses
- Need lower cost micro payment – existing money transfer services too costly
- Combination of benefits of mobile money with those of normal account (egcash through ATM/branches, transaction history)
Current challenges of m-money
- Financial dis-intermediation is occurring
- Responsibility of reconciliation abdicated by e-money issuers
- Transaction costs are too high for majority of transactions (Rule of 2%)
- Closed loops hold back overall growth
- KYC requirements are restrictive at levels of low risk