KAMPALA – Financial technology companies (Fintechs) operating in Uganda have been encouraged to harness the power of emerging technologies like Artificial Intelligence (AI) and blockchain to enhance financial inclusion.
According to James Ivan Ssentimba, Deputy Director of the Department of National Payment Systems at Bank of Uganda (BoU), while Fintechs have already demonstrated their capacity to promote financial inclusion, more needs to be done to bridge the credit gap between micro, small, and medium enterprises (MSMEs) and traditional banking services.
“By leveraging these technologies, MSMEs can improve access to credit, enhance operational efficiencies, and ultimately contribute more significantly to Uganda’s economic growth and development,” Ssentimba said. “So, as Fintechs, you have a very, very big role to play, given the huge credit gap that exists between what MSMEs need as financial services and what they do receive from traditional banking services.”
He noted that the FinScope Uganda survey of 2023 showed that financial inclusion stood at 81 percent, up from 77 percent in 2018, largely driven by the uptake of mobile money services. However, he emphasized that more needs to be done to address the credit gap, which is where Fintechs come in.
Doreen Lukandwa, vice chairperson of the Financial Technology Association of Uganda (FITSPA), echoed Ssentimba’s sentiments, emphasizing the significance of adopting the latest technologies like blockchain and AI. “The benefits include enhanced efficiency and productivity. FinTech solutions enable SMEs to automate repetitive tasks, streamline costs, and complex processes, and make data-driven decisions to optimize their financial strategies, freeing up valuable time and resources for you to focus on your core business activities.”
The workshop, organized by Sustainable Business for Uganda (SB4U) and FITSPA with support from the European Union, brought together stakeholders in the Fintech industry to discuss ways of promoting financial inclusion through emerging technologies. Speakers emphasized the need for partnerships between Fintech companies and banks, funding opportunities, and networking to develop cutting-edge solutions that cater to the needs of small businesses.
Ssentimba added that the Central Bank has created a conducive environment for Fintechs to thrive and is now working towards promoting quality services. “We want to see more service availability in terms of platforms. We want to see more quality services being provided by payment service providers. And we want to see that customers benefit from these services,” he said.
Sofian Dahmani, programme officer at the European Union Delegation to Uganda, urged Fintechs to take advantage of existing credit lines to serve more Ugandans. “We facilitate access to capital by linking MSMEs to sources of capital or providing them with the capital needed for business growth, and we support businesses in their post-investment phase to utilize the funds received efficiently. I would like to encourage all of you to consult our new Access to Finance Portal for all the opportunities available for financing from the existing facilities of Team Europe as well as the Government of Uganda, other development partners, and financing institutions.”
