Uganda and Financial Inclusion

Uganda recently launched their new five-year National Financial Inclusion Strategy. The strategy seeks to reduce financial exclusion from 15 to 5 percent by 2022 by ensuring that all Ugandans have access to and use a broad range of quality and affordable financial services. This is a significant and timely strategy for This Is EPIC.

Our projects look to empower those in rural communities to help themselves by teaching them to save and loan money and start small businesses and income generating activities.

Uganda has made some impressive progress in terms of financial inclusion since the 1990s but there is still a long way to go. The new strategy identifies priority areas and then outlines the objectives as to how they will improve financial inclusion. We look at some of the highlights below and how they tie into our work at This Is EPIC.

Priority Areas: Women, Youth and Rural Populations

The strategy outlines that a focus is needed on women, rural areas and youth above 15 years old.

Rural residents in Uganda have less access to financial services than their urban counterparts, and un Uganda around 71.5% of the population live in rural areas. The costs of delivery and lower population density in rural areas makes traditional outreach of “brick and mortar” financial services much more costly and difficult to deliver.

Objective: Reduce Access Barriers to Financial Services

Statistics show that only 16 percent of Ugandans live within 1 km of a point of service for a bank. Alongside the distance barrier there are other challenges such as KYC requirements, liquidity requirements,  very high interest rates and challenges with youths opening bank accounts. Some of the key actions the strategy is looking to address to remove or reduce the barriers are:

  • Issue agent banking regulations and implement an agent banking infrastructure to bring more finance to rural areas.
  • Implement linkages between VSLAs and the formal financial sector to reduce financial exclusion among women and rural communities.
  • Introduce a legal/regulatory exemption amendment that allows youth (ages 15-17) to open savings accounts in their own right.

Objective: Build and improve the digital infrastructure

With over 70% of Ugandans living in sparsely populated rural areas traditional financial service providers do not have the incentive to build costly brick-and-mortar branches. The knock on impact of this is the rural poor facing very limited access to financial services, high transaction fees, poor customer service and loss of money through fake financial institutions. Some of the key actions the strategy is looking to bring in to improve the digital infrastructure are:

  • Require inter-operability among financial service providers and/or to the existing clearing systems.
  • Provide free digital devices to marginalised individuals and/or provide targeted support to companies/initiatives providing low cost digital services.
  • Require service providers to offer customer-friendly interfaces for products and services (e.g., USSD code menus in local languages).

Objective: Empower and protect individuals with enhanced financial capability

Issues like low financial and digital literacy are becoming more significant as poor people make the leap towards digital financial services. The financial inclusion strategy outlines a review of the national financial literacy strategy and Financial Service Providers consumer protection practices. Some of the key actions the strategy is looking to bring in to empower and protect individuals are:

  • Better understand societal barriers for women’s inclusion and build capacity on property rights, importance of collateral and control over assets by working with SACCOs, MFIs and VSLAs.
  • Review past financial literacy strategy and formulate a national financial literacy strategy for 2018 – 2023.
  • Strengthen coordination of financial consumer protection across all regulators of institutions that provided financial services and policymakers.
  • Improve awareness of financial services among individuals.
  • Financial service providers and government to promote and implement financial consumer protection and capability initiatives.

Objective: Increase the availability of agricultural credit

A common struggle for micro, small and medium enterprises in Uganda is access to credit. This limits their ability to grow and create jobs. A Bank of Uganda economy report in 2016 outlines that only 10 percent of total credit is for agriculture. The strategy recognises that agriculture is a critical part of the economy. Credit needs to be made more available in the sector. Some of the key actions the strategy is looking to bring in to increase services available for agriculture are:

  • Improve the oversight of existing credit facilities such as the Agricultural Credit Facility and improve oversight and operations of warehouse receipt systems and storage facilities so that lenders have confidence to extend loans against such receipts.
  • Promote utilisation and uptake of the Agriculture Insurance facilities and services.
  • Establish lines of credit to the Agriculture sector with the aim of growing the credit market.

Why is this new financial inclusion strategy important to us at This Is EPIC? 

The Uganda Financial Inclusion Strategy is very much aligned to our work at This Is EPIC and also a new initiative, Rise Finance, which will provide digital financial services to our group members as they graduate from our community groups to more formal financial services.

We’re already focusing on rural areas, women make up over 70% of our group members and we have a number of youth savings and loans groups in Uganda. Through Rise Finance technology will be harnessed to remove barriers and increase scalability of reaching thousands more with basic financial services through the use of mobile phones and mobile money agents.

The strategy does look to address all of the key barriers to financial inclusion and makes us very hopeful that Uganda will achieve it’s target of reducing financial exclusion from 15% to 5% in the next 5 years.


Our work focuses on empowering community driven change and providing a help up rather than a handout.