60% of Ugandans are saving, says 2023 Finscope report
About 39 percent of Ugandans save to help with regular expenses according to the report. Photo / File
What you need to know:
- Most Ugandans still save to cover living expenses but there is a shift towards productive investments such as real estate development
About 60 percent of Ugandans are saving formally and informally, according to a 2023 FinScope survey.
This is a 6 percent increase, up from 54 percent in 2018, meaning Ugandans are more conscious of saving than they were four years ago.
The 2023 FinScope survey indicates most Ugandans still save to cover living expenses but there is a shift towards productive investments such as real estate development, business, and agriculture.
Breaking down the main purpose of saving in Uganda, the 2023 FinScope report indicates that those who save to help with regular expenses stood at 39 percent, compared to 37 percent in the 2018 FinScope survey.
Unfortunately, the percentage of those who save to cope with unexpected expenses dropped to 14 percent, down from 26 percent.
The percentage of those who save to acquire or build or renovate houses dipped to 14 percent, down from 26 percent in 2018.
The fraction of those saving for business purposes has grown to 12 percent, up from 9 percent in 2018, while those saving to invest in agriculture has grown to 12 percent, up from 8 percent.
The portion of savers who buy household goods has grown to 3 percent, up from 1 percent.
Presenting the report titled, ‘Saving mechanisms in Uganda: the FinScope Uganda survey for 2023, in Kampala yesterday, senior analyst at FinMark Trust, Mr Bobby Berkowitz, said the informal savings mechanism still dominates.
“Despite the increase in overall saving among Ugandans, informal savings mechanisms with two out of every 10 Ugandans are saving electronically through formal financial f institutions,” he said.
Mr Bobby said Saccos and mobile money have registered the highest increases in adoption since 2018 with the proportion of Ugandans keeping their money at home also more than doubling, which could be a sign of a lack of confidence in any form of the financial services provider whether formal or informal.
The new FinScope survey shows that 42 percent of Ugandans save through mobile phones, up from 23 percent in 2018, while savings through Saccos have risen to 15 percent, up from 5 percent.
Savers using banks, micro-deposit-taking institutions or credit institutions increased to 15 percent from 11 percent, while pension funds or retirement schemes savers stood at 2 percent.
Mr Bobby said the FinScope shows that village savings groups increased to 47 percent, up from 43 percent, saving through merry group round groups has stagnated at 9 percent since 2018. Saving through community groups or churches stands at 9 percent, up from 2 percent. 18.
Almost half of Ugandans are still keeping cash at home for longer term at 44 percent, compared to 27 percent, while those who prefer giving their money to family or friends to keep it safe, stood at 13 percent, up from 8 percent.
The FinScope survey was conducted jointly by Bank of Uganda, Ministry of Finance, Financial Sector Deepening Uganda, the Agricultural Business Initiative, and Uganda Bureau of Statistics with committee members of coming from other financial institutions.
It shows that the overall financial inclusion in Uganda by all adults has increased, due to a growing formal inclusion currently standing at 81 percent, up from 77 percent in 2018.
