Ugandans accessing financial services now at 54 per cent

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By Martin Luther Oketch

Posted  Wednesday, December 4  2013 at  00:00

The number of Ugandans accessing financial services from both formal and informal financial institutions has increased from 28 per cent in 2009 to 54 per cent in 2013, surveys have shown.

A FinScope III survey carried out by Economic Policy Research Centre (EPRC) reveals that the growth was driven by the increase in the non-bank sector from 20 per cent in 2009 to 52 per cent in 2013.

Presenting the survey findings in Kampala recently, the executive director of EPRC, Dr Sarah Ssewanyana said the share of adults using non-bank formal financial services increased from 7 per cent in 2009 to 34 per cent by 2013.

“The strong growth in use of non-bank financial services is attributed majorly to use of mobile money transfer services,” she said.

Financially excluded
Dr Ssewanyana said the population of financially excluded adults in Uganda reduced from 4.3 million (30 per cent of adults in 2009) to 2.6 million (15 per cent of adults in 2013).

The report shows that there is imbalance between the urban and the rural areas as far as access to financial services in Uganda is concerned.

Dr Ssewanyana explained that due to proximity to financial institutions, residents of urban areas are more than twice likely than rural residents to use formal banking institutions (36 per cent vs. 17 per cent in rural areas).

The executive director supervision at Bank of Uganda, Ms Justine Bagyenda said over the past year, Uganda’s financial sector has witnessed commendable growth in terms of products, size, intermediation and outreach.

“For instance, Commercial banks’ lending to the private sector increased from Shs681.9 billion in December 2001 to Shs7.616.trillion in June 2013,” she said about the growth in figures.