Facilitating Financial Inclusion through Promoting the use of Mobile Money as a Saving Avenue

Mobile money has gained so much prominence in the developing world in recent times due to its potential to bring on board the financially excluded people in the rural areas and transform the mainly cash economies of developing countries into a cashless economies. However in Uganda, the use of mobile money as a saving mechanism has not gained as much impetus as the transfer and payment strands. In this policy brief, we examine the probable reasons explaining why the saving strand has remained unpopular within both the Mobile Network Operators (MNO) and amongst the population. One major setback – the expansion of mobile money beyond mobile payments is still limited in Uganda partly due to limitations in legislation. While mobile money falls under financial services, MNC are licensed and regulated by the Uganda Communications Commission. This contradiction has led to questioning of the legality of mobile money service provisions in Uganda. In addition, setbacks associated with living in hard to reach areas – poor road networks, poor coverage of the mobile networks, limited spread of other financial institutions are some of the hindrances to using mobile money as a saving mechanism. The promotion of savings requires that telecom companies and commercial banks leverage on each other’s strengths to deliver a comprehensive saving instrument for hard to reach areas and poor people. The use of mobile money as a saving mechanism also requires innovative approaches that will allow for smooth operations of mobile agents to deposit and withdraw money whenever the need arises.