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The Fintech Ecosystem of Uganda

Located in East Africa, Uganda has a growing fintech ecosystem that many across the world might not be aware of.

Economic development overview

The country’s overall aspirations can be seen with its Uganda Vision 2040 strategy, whereby much of the country will have a diverse, sustainable and digital economy – similar long-term aspirations as other countries across the Middle East and Africa (MEA).

Fintech has been growing in the country and has played a growing role in various aspects of people’s lives. Having been to the country this year, I’ve seen first-hand that in particular with payment solutions it has been evident. In particular for a country whereby much of it is centred around USSD to cater to the current reality of most of its population not having smartphones (only 16 per cent of Ugandans have a smartphone).

Mobile penetration in Uganda is at 49 per cent. This reality has promoted financial inclusion for many Ugandans. In fact, the country’s digital economy contribution is around seven per cent of its gross domestic product (GDP), which is higher than, for instance, countries in the country such as South Africa at three per cent.

Mobile payments and wallets have helped the African continent as a whole with regards to wider economic development via digital IMAGE SOURCE RICHIE SANTOSDIAZ
Mobile payments and wallets have helped the African continent as a whole with regards to wider economic development via digital IMAGE SOURCE RICHIE SANTOSDIAZ

The Financial Technologies Service Providers Association (FITSPA), which is an independent, nonprofit, membership-based organisation founded in 2017 in partnership with the Financial Sector Deepening Uganda (FSDU) project that represents Uganda’s local fintech community and global fintech institutions operating in the country. Having nearly 160 members at the end of 2021, they have played a strong part in the community.

Their recently published report Study on The State of Uganda’s Fintech Industry which was done by Deloitte and commissioned by FITSPA, discovered that the country’s fintech composition was around half (47 per cent) on payments, followed by bank infrastructure at 23 per cent, investments and savings at 16 per cent, lending at seven per cent, insurance at five per cent, and markets at two per cent. The following will highlight other of their key findings.

First, with regards to payments, as commented based on my own personal observation in the capital and commercial hub of Kampala, mobile money in particular dominated; the Deloitte report highlighted this too.

In the study, it highlights that “players are typically aggregators who provide mobile wallets, telecoms who provide mobile money platform, and bankers providing exco account services or mobile wallet solutions, all combined to serve utilities, bank-to-consumer, e-commerce, and end-user retail payments. In addition, there is an increased number of mobile and digital wallet providers that are keen on tapping into the payments’ subsector.”

Second, with regards to savings & lending from the report, fintechs dominate in niche markets such as asset lending, solar, agro-business, micro-loans and savings. Fintechs have capitalised on their understanding of the traditional Ugandan SACCOs and microfinance structures to offer digital transformation solutions to this market segment.

The Fintech Times Fintech: Middle East and Africa 2021 Report by Richie Santosdiaz and The Fintech Times
Country profile of Uganda in The Fintech Times Fintech: Middle East and Africa 2021 Report by Richie Santosdiaz and The Fintech Times SOURCE The Fintech Times

Third, e-commerce grew and this further accelerated during the Covid-19 pandemic. As reported, whereby Uganda had one of the world’s longest lockdowns, the Deloitte report saw Ugandan players like Safeboda and Jumia grow, in addition to new entrants like Glovo.

The disparity of its popularity is still evident with its reliance on the internet, whereby it can explain that Kampala area has the concentration of this due to it also having a higher smartphone usage compared to the rest of the country.

Fourth, with respect to remittances, mobile money helped the unbanked in the country, whereby today fintechs like Airtel Money, MTN Mobile Money, Eversend and others have enhanced inter-connectivity between financial institutions, businesses and the end-consumer via mobile and digital wallets.

According to the same source, mobile money penetration has grown at a fast pace with over 30 million registered customers and transaction value of Ugandan Shillings UGX 79.8trillion in 2020 compared to 0.6 million customers and transactions worth UGX133 billion in 2015.

As many Ugandans work abroad and send much of their money back to the country, in particular for a developing country like Uganda to have mobile money currently dominating remittances in Uganda.

Finally, financial technology regulations have shifted from more traditional banking to more mobile money, as well as more comprehensive open-ended financial regulations.

This has been highlighted for instance in my own Fintech: Middle East and Africa (MEA) 2021 report by The Fintech Times, as well as the Deloitte report. The country’s policies that have shown the developments of the sector include the National Payment Systems Act, whereby the Bank of Uganda introduced a new poly that will promote the payment systems in the country. In addition, with regards to fintech licenses and regulatory sandbox, the Bank of Uganda has been deploying fintech licences and sandbox to help promote innovation and regulate it.

 Gerald Begumisa is the Managing Director at Yo-Uganda Limited
Gerald Begumisa

For instance, Yo-Uganda Limited (‘Yo!’) is a 16-year-old fintech firm based in Uganda. According to Gerald Begumisa, managing director at Yo-Uganda Limited: “We introduced our mobile payments aggregation service in 2011, the first in Uganda, to the then-fledgling fintech market.

“Beyond the limited use for person-to-person transfers at the time, we saw the opportunity to extend the immense benefits of mobile financial services to a great number of use cases, and segments.

“Fast forward to 2022, we are among the first fintechs licensed by the Central Bank of Uganda, and our services are being used by thousands of merchants, corporations, government entities and financial institutions, processing payments to and from millions of customers.

“We are also engaged in a partnership with Mastercard to digitise workflows and payments in Agriculture value chains in Uganda, which has seen more than 200,000 farmers onboarded within the first six months of its commencement.”

Zianah Muddu is Engagement Manager at FITSPA
Zianah Muddu is Engagement Manager at FITSPA

According to Zianah Muddu, Engagement Partner at FITSPA, “Its amazing to see how far the industry has come and to learn about the great potential it has to attract funding investment and business opportunities. Our recent report further mentions the availability of skilled talent in the ecosystem. These are all beneficial to the Fintech industry.”

As mentioned previously, FITSPA’s recently launched report on the State of Uganda’s fintech industry looked at a couple of themes that are enabling the fast growth i.e; the composition of fintech in the economy, payment landscape, digital banking, capital composition, funding, demand for fintech, fintech adoption, talent, as well as policy and regulation.

The fintech industry in Uganda presents opportunities not only for the country but the continent as a whole.

Updated 2 July 2022


  • Executive Economic Development Advisor (Emerging Markets) | Contributor

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