Microfinance institutions must digitise - BoU

Monday July 13 2020


By Ahsita Chopra

Bank of Uganda has said tier-4 financial institutions, among them microfinances, must utilise digital solutions to ease access to services, especially at a time when there is difficulty in movement.

Speaking during a zoom meeting at the weekend, Dr George Wilson Ssonko, the Bank of Uganda head of financial consumer empowerment mechanism, said it was important that fincancial institutions help the vulnerable, many of whom have had problems of movement, to access services remotely, especially during Covid-19 .

“We need to work on consumer protection mechanisms at this time of Covid-19. People are not able to access their savings,” he said, noting there was need to harness digital solutions to extend services.

Whereas many financial institutions remained open during the lockdown, most customers could not access services due to limited movement.

During the period some financial institutions had to resort to digital solutions to extend services. However, most of the smaller financial institutions had by the time not installed such solutions to ease access.

Ms Rashmi Pillai, the Financial Sector Deepening Uganda executive director, said most Ugandans have their saving in tier-3 and tier-4 financial institutions, but they were not able to access them at the most critical time.
“According to a survey we carried out, people on an average did not have more than Shs4,000-5,000 in their pockets due to lockdown,” she said.