Why Ugandans don’t save

Monday November 5 2018

Ugandans match to raise awareness about savings

Ugandans match to raise awareness about savings during the World Savings Day celebrated every October 31. PHOTO BY ISMAIL MUSA LADU 

By ISMAIL MUSA LADU

Statistics from Bank of Uganda (BoU) and Uganda Bureau of Statistics (UBOS) indicate that Uganda’s saving culture is badly wanting.
Savings refer to money you put aside for future use rather than spending it immediately.
According to UBOS, only 12 percent of the population have bank accounts while BoU research shows that just about three to five percent of Ugandans save their monthly earnings on a regular basis.
Compared to other East African countries such as Kenya whose population saving rate is at 23 percent, Tanzania 13 percent and Rwanda 18 percent, Uganda’s savings statistics make a bad reading. Going by the statistics, saving culture of Ugandans is terribly low.

Encumbrances
“How can you save yet you live from hand to mouth,” Mr Peter Okeny, a special hire (taxi) driver, who was attending the BoU public awareness campaigned dubbed: “My money” said in an interview on Wednesday.
He continued: “What I earn is not in tandem with the cost of living, which is rather high.”
In another interview with Ms Jackqueline Nansubuga who was attending the same central bank organised event, it emerged that recent closures and takeover of some commercial banks in the country is eroding the confidence of a segment of the population who are already suspicious of the formal banking institutions.

“I need to be sure that I can access my savings as and when I want it. I don’t want to wake up to the news of bank closures and takeovers, such news do little in boosting our confidence. It is sophisticated people who understand these things. As for me, I want straight forward things,” Thomas Bahakenira, a vendor said.
Generally, salaried employees Daily Monitor spoke to complain of low salary. The wage (casual) workers cited irregular income. And the micro and small business owners say banks are out of reach and that the rate at which they avail credit facilities is beyond the reach of a normal business person starting up.
Other reasons include financial illiteracy; physical distance from banking institutions and high minimum deposit and balance requirements, limiting access to banking services.

Excuses
The team leader, financial literacy at BoU, Ms Tilda Nabbanja Turyaggenda attributed poor savings culture to numerous excuses as well as the population inability to resist unwarranted expenditure.
She said: “You need to start saving and make sure you keep that savings with a bank that is regulated by BoU. And also stop complaining and giving excuses as to why you are not saving.
“Then you don’t have to be too generous because you will not solve all the problems of your friends and relatives. Learn to say no politely but firmly. Then you will be able to save for yourself,” Ms Turyaggenda said.

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