Friday, July 19News That Matters

Unlocking Uganda’s Financial Future: Embracing Mobile Money for Prosperity.

Cashless economies – where transactions are done using digital payments instead of cash – are gaining

momentum across the world. This has been supported by enormous investments in digital payment

infrastructure such as mobile money platforms, making it convenient for people and businesses to buy

and sell products and services digitally.

Indeed, Uganda has witnessed a faster growth in mobile money transfers surpassing account holders in

commercial banks. Latest data from the industry regulator, Uganda Communications Commission,

indicates that the total number of registered mobile money accounts stands at slightly above 37.3

million since MTN Uganda first rolled out the service more than a decade ago.

In contrast, the number of bank accounts stands at a paltry 20.7 million as of June 30, 2022. This is less

than 50% of the country’s population estimated at 45.5 million. This underscores the power of fintechs

especially mobile money in driving financial inclusion, especially among the unbanked population.

However, the population’s transition towards cashless payment with great innovations such as mobile

money has remained low.

This is the reason MTN Mobile Money Uganda Ltd is carrying out a campaign dubbed “Pay with MoMo,”

to encourage customers and merchants to pay and accept products and services including transferring

money, paying bills, and performing various mobile phone transactions using digital money.

Fintech, particularly mobile money, emerges as a transformative force that can bridge the gap and

empower the unbanked population.

One of the foremost advantages of transitioning towards a cashless economy is the enhanced security it

offers. With digital transactions, the risks associated with physical cash, such as theft, counterfeit

currency, and loss, are dramatically reduced.

The transparency of electronic payments creates a traceable record of transactions, facilitating the

detection and prevention of fraudulent activities. This heightened level of security not only safeguards

the assets of individuals but also bolsters confidence in the financial system.

Furthermore, a cashless economy brings undeniable efficiency and convenience to both businesses and

individuals. Digital transactions are processed swiftly, eliminating the time-consuming burden of

handling physical cash. The ability to make payments and access funds through mobile phones or

electronic devices at any time and from anywhere enhances financial inclusivity and empowers

individuals to participate more actively in economic activities.

Cost savings and economic growth are two other compelling reasons for countries like Uganda to

embrace mobile money and reduce reliance on cash. The expenses related to the management of

physical cash, including security, transportation, and storage costs, can be significantly minimized. These

savings can then be redirected towards critical sectors of the economy, promoting sustainable growth

and development. Furthermore, a cashless economy facilitates faster and more efficient transactions,

which can stimulate economic activities and drive overall prosperity.

However, the transition to a cashless economy in Uganda is not without its challenges. Limited

infrastructure and connectivity in far remote areas pose significant obstacles. Addressing this issue

requires concerted efforts from telecom companies like MTN to expand network coverage and enhance

connectivity in underserved regions. Additionally, educating and training individuals in these areas on

how to effectively use mobile money services is crucial to ensure that the benefits of a cashless

economy reach everyone.

Building trust and increasing awareness about the security and advantages of digital transactions are

also paramount. Initiatives like MTN MoMo’s educational campaigns and community partnerships are

playing a big role in overcoming these concerns. By fostering financial literacy and awareness, these

efforts are gradually breaking down barriers and making people more comfortable with embracing

mobile money as a means of financial empowerment.

As such, the transition towards a cashless economy, driven by mobile money transfers, holds immense

significance for Uganda. It not only enhances security, efficiency, and convenience but also offers cost

savings and the potential for economic growth.

While challenges exist, the concerted efforts of both public and private sectors, as exemplified by MTN

MoMo’s initiatives, are paving the way for a more inclusive and prosperous financial landscape. As the

mobile money ecosystem continues to evolve, Uganda is on the path to unlocking the full potential of a

cashless economy, bringing financial access and empowerment to its people.