Uganda to switch to mobile money for reducing dependence on commercial banks

Ugandans will be able to buy government securities through a mobile money platform in a move by the east African country to become less dependent on commercial banks and institutional investors for its funding. The government said in a statement on Tuesday that the measure, which was approved at a cabinet meeting on Monday, would boost savings and investment among ordinary Ugandans as well as driving economic growth.

Ugandans with mobile money accounts, many of whom had limited access to banks, will now be able to directly buy government debt. The move follows a similar move by Kenya in 2017 and will also open the market up to Uganda’s Diaspora. Mobile money allows subscribers to transfer money and make payments for services and products via their mobile phones and has developed rapidly in Africa, where it is now widely used. Of Uganda’s population of 41 million, about 23.6 million are mobile phone subscribers.

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