Financial inclusion strategy will lower poverty, says BoU
Bank of Uganda says financial inclusion has emerged as a cornerstone of global development. Photo / File
What you need to know:
- Financial inclusion creates jobs by supporting entrepreneurship and business expansion
Bank of Uganda (BoU) has unveiled the second National Financial Inclusion Strategy II (NFISII) 2023/28.
The deputy governor Bank of Uganda, Dr Michael Atingi-Ego said financial inclusion has emerged as a cornerstone of global development, fueling progress towards the Sustainable Development Goals (SDGs) and broader aspirations.
“Financial inclusion is pivotal in uplifting low-income and marginalised households from poverty by expanding access to essential financial services. These services empower individuals and communities to participate fully in the economy, build resilience to shocks, and drive inclusive growth,” he said.
Dr Atingi-Ego said the second financial inclusion strategy aligns with the BoU’s strategic plan (2022/27), with initiatives to foster financial inclusion through digital financial services, regulatory frameworks, appropriate infrastructure, partnerships, innovation, and consumer protection.
It also emphasises the soundness and resilience of the financial system. The NFIS II envisions “Universal access and usage of a broad range of quality and affordable formal financial products and services delivered in a responsible and sustainable manner.”
To realise this vision, he said five key pillars have been identified: eliminate financial exclusion and access barriers, expand usage of affordable, high-quality financial products, empower financial consumers through protection and education, foster an inclusive green finance market and champion gender-inclusive financial services.
Dr Atingi-Ego said financial inclusion is pivotal in uplifting low-income and marginalised households from poverty by expanding access to essential financial services. These services empower individuals and communities to participate fully in the economy, build resilience to shocks, and drive inclusive growth.
Monetising economy
“Financial inclusion contributes to monetising the economy from agrarian subsistence, alleviating poverty, eradicating hunger, promoting health, and fostering gender equality. New regulations have enabled agent banking to flourish, bringing banking services to villages,” he said.
Speaking during the launch of National Financial Inclusion Strategy 2023/28, Finance minister Matia Kasaija said financial inclusion is vital for our national development agenda.
“Financial inclusion helps us grow our economy. When farmers, for example, have access to affordable loans, they can purchase inputs for their farms and grow more produce. When they sell this extra produce, they have more money in their pockets to spend in shops or on services. The extra money multiplies and the economy grows,” he said.
Secondly, financial inclusion reduces poverty, for instance, the acquisition of an insurance policy ensures sustainability and income security. Insurance is a financial safety net, helping you and your loved ones to recover after an unforeseen emergency – such as a drought, fire, theft, excessive rainfall or car accident.
“A farmer accessing insurance through our government Agricultural Insurance Scheme will not lose their livelihood if their crops fail during a drought or excessive rainfall. The insurance company covers the loss, safeguarding them from destitution. This is especially important since a significant percentage of Ugandans (about 41 percent) are considered insecure and non- poor,” Mr Kasaija said.
Financial inclusion
Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance in a sustainable way.
