Museveni admits economic growth has not been inclusive

President Museveni. File photo

What you need to know:

  • The State minster of Microfinance, Mr Kyeune Haruna Kasolo, said access to financial services in Uganda is hampered by expensive loans that the microfinance and the entire financial institutions in Uganda offer.
  • In this regard, Mr Museveni said particular attention is required for specific portions of the population that have been historically excluded from the formal financial sector either because of their income level and volatility, gender, location, type of activity, or level of financial literacy.

Kampala. President Museveni has admitted that the high economic growth Uganda has registered over the years has not been inclusive and that access to and use of finance remains a problem to government.
In a speech read for him by Public Service minister Muruli Mukasa during the International Microfinance CEO Working Group conference on the theme: ‘Partnering for collaborative development’ held on Tuesday in Kampala, Mr Museveni said the problems form a part of the 10 strategic bottlenecks identified by the government.

Mr Museveni added: “Financial inclusion is necessary to ensure that economic growth performance is inclusive and sustained.”
He said Africa is now the world’s second fastest growing region after Asia, with the annual GDP growth rates in excess of 5 per cent over the last decade.

Excluded individuals
Financial inclusion means that individuals and businesses, without discrimination, have access to useful and affordable financial products and services that meet their needs-transaction, payments savings credit and insurance-delivered in a responsible and sustainable way.
In this regard, Mr Museveni said particular attention is required for specific portions of the population that have been historically excluded from the formal financial sector either because of their income level and volatility, gender, location, type of activity, or level of financial literacy.

“In so doing, there is need to harness the untapped potential of those individuals and businesses currently excluded from the formal financial sector or underserved, and enable them to develop their capacity, strengthen their human and physical capital, and engage income-generating activities, and manage risks associated with their livelihoods,” he said.
Regarding the quality of finance, Mr Museveni said: “Quality measures reflect the degree in which financial products and services match clients’ needs, the range options available to customers, and clients’ awareness and understanding of financial products.”

The State minster of Microfinance, Mr Kyeune Haruna Kasolo, said access to financial services in Uganda is hampered by expensive loans that the microfinance and the entire financial institutions in Uganda offer.
“We shall not develop the microfinance industry when the interest rates are very high,” he said.
He added: “If we are to deliver Uganda to middle income status by 2020 then financial institutions have to lower cost of credit to their clients.”