Launch of the National Financial Inclusion Strategy - Keynote address by AFI Deputy Executive Director, Norbert Mumba


Launch of the Uganda National Financial Inclusion Strategy
Thursday, 26 October 2017, Bank of Uganda, Kampala Uganda

Keynote address by Norbert Mumba, Deputy Executive Governor, AFI

Hon. First Deputy Prime Minister of the Republic of Uganda, General Moses Ali,

Hon. Minister of Finance, Planning and Economic Development, Hon Matia Kasaija,

Members of Parliament,

Governor of the Bank of Uganda, Hon Emmanuel Tumusiime- Mutebile,

Deputy Governor Bank of Uganda,

Members of the Board of Bank of Uganda,

Development Partners,

Senior Government Officials,

Heads of Regulatory bodies and Financial Institutions,

Senior staff and Staff from the Bank of Uganda and

Distinguished Ladies and Gentlemen,

It is with great pleasure that I am here on behalf of the Executive Director, Dr. Alfred Hannig and the Alliance for Financial Inclusion (AFI) on the occasion of the launch of the National Financial Inclusion Strategy (NFIS) for Uganda. As you may be aware, Dr. Hannig has a long standing relationship with Uganda, having spent time in this country. He has reminded me to share his appreciation for the phenomenal strides the Bank of Uganda (BoU) has made in its financial inclusion journey. 

As you are aware, BoU is a member of AFI, a member-owned network, that promotes and develops evidence-based policy solutions that improve the lives of the people, particularly the poor, that have limited or no access to financial services. Today, the network consists of more than 100 institutions, mainly central banks and ministries of finance, from 94 emerging and developing countries that account for over 85% the world’s unbanked population.

It is therefore a great honor for me to recognize the constant efforts of the BoU , Government and other key stakeholders represented here today in joining hands to develop the national financial inclusion strategy that will shape and deepen the financial sector in Uganda for the coming years.

Hon. Deputy Prime Minister, Hon Governor, AFI members are of the conviction that inclusive economic and sustainable growth begins with financial inclusion. We believe that financial inclusion is key to integrating the unbanked into the formal economy, which helps to alleviate poverty, make the poor less vulnerable to financial shocks, reduces economic inequality and raises living standards for all. By promoting smart financial inclusion policies, AFI is also working for enhanced stability and integrity of financial systems. Confirmation of what AFI has always known, that there is no contradiction between financial inclusion and financial stability, has now started to emerge with various studies pointing to this conclusion. Indeed, financial inclusion is now empowering the financial sector to have better and more effective oversight of the participants in the financial sector.

We, therefore, applaud the development of this elaborate national financial inclusion strategy that is an essential catalyst to scale up and deepen financial inclusion in Uganda as well as the East Africa region. On our part, AFI considers NFIS as key to accelerating the pace of deployment of national policies that will scale up adoption of financial services while at the same time allowing the private sector to develop appropriate products that are affordable and responsive to the needs of the majority of the Ugandan people. NFIS should focus on delivering financial services to all efficiently and at affordable cost. NFIS must also guarantee a credible financial system with effective dispute resolution mechanisms to ensure consumer confidence.

Distinguished participants, AFI supports sustainable and equitable development. A robust national financial inclusion strategy should be receptive to financial growth policies that take into account gender equity with specific emphasis on access for women. NFIS should also address climate change and green finance, and the plight of both externally and internally displaced persons. We have come to understand that the poor are not asking for favors but for a level playing field that is devoid of onerous processes that limits them from accessing quality financial services to better their lives. Through effective policies, particularly leveraging digital financial services (DFS), the lives of many can be uplifted and economic development would become more sustainable.

Global trends

Global trends show strong and increasing interest in development of national financial inclusion strategies. This reflects a recognition by policymakers that the complexity of financial inclusion, involving many different policies and actors, requires an overall organizing framework and strategic approach. Financial inclusion is a long-term challenge, which requires guiding principles and frameworks, under which detailed action plans can be tailored.

The Maya Declaration, an initiative launched in 2011 to unlock the economic potential of the two billion unbanked population through greater financial inclusion, further galvanized the development of national strategies as frameworks to assist implementation of countries’ Maya Declaration commitments.

AFI’s Financial Inclusion Strategy Peer Learning Group (FISPLG) has defined a National Financial Inclusion Strategy as “a comprehensive public document that presents a strategy developed at the national level to systematically accelerate the level of financial inclusion.”

Almost all AFI members (97% of those polled at GPF 2012) regard a national strategy as essential to accelerate financial inclusion in their countries, and the emerging data appears to bear this out: President of the World Bank, Jim Kim commented at this year’s Spring Meetings that Global Findex showed that for the World Bank’s 25 priority countries, those with national strategies had made twice the rate of progress between 2011 and 2014 as opposed to those without. AFI’s earlier own analysis of 46 countries for which policy profiles have been completed also shows a correlation between higher rate of increase in financial inclusion and having a national strategy in place.

Uganda is one of the 27 countries that committed to develop national strategies under the Maya Declaration. Uganda has now completed this task and is one of 43 countries that has a national financial inclusion strategy in place.

The importance of developing national financial inclusion strategies that are effective and responsible to national development goals cannot be over emphasized. National strategies ought to consider the national financial inclusion gaps to be addressed. They ought to recognize the inadequacies of current financial services offerings, especially with regards to underserved groups such as women, youth and forcibly displaced persons. Driving through from Entebbe to Kampala exemplifies the immense potential of micro industries in the country and indeed Africa as a region.

The Alliance for Financial Inclusion was founded in 2006 on the idea that a global knowledge exchange platform was key to expanding and improving financial inclusion policy. AFI also provides annual capacity building trainings, as well as regional trainings through the Regional Initiatives such as AfPI, PIRI and FILAC (for the Arab Region in Jordan). A National Financial Inclusion Strategy (NFIS) is a key starting point for channeling resources to support implementation by government, private sector and development partners. More significantly, we, AFI, tailor support to assist members in implementing their national strategies, as was the case with Bank of Tanzania where AFI supported a peer learning programme with the Bank of Brazil around its strategy.

During the past 11 years of our work, 260 financial inclusion policy improvements have been implemented by member institutions with support that they have credited to their engagement in AFI. Over 300 million poor people around the world are estimated to have benefitted from these policies. 

Since 2009, the BoU has been one of AFI’s most active members, taking part in all six AFI working groups (Consumer Empowerment & Market Conduct Working Group, Digital Financial Services Working Group, Financial Inclusion Data Working Group, Financial Inclusion Strategy Peer Learning Working Group, Global Standards Proportionality Working Group, and SME Finance Working Group).

Uganda’s active participation in these working groups provides an opportunity for the country to shape its financial inclusion policy priorities for years to come through the benefits derived from AFI’s peer-to-peer platform that is founded on advancing tested solutions.

I would like to congratulate and express gratitude to the senior staff from the Bank for the leadership they have provided to the working groups at a global level — Justine Bagyenda (FISPLG), Christine Alupo (CEMC) and Mackay Aomu (FISPLG).

Hon. Prime Minister, distinguished participants in the midst of isolationism, it is important to remind ourselves of the question, “why are we doing this?” and also not to forget the successes that BoU has made in the last few years of its efforts to increase access to finance.

Through the Maya Commitments, BoU set out ambitious targets for itself, succeeding to develop and implement a National Strategy for Financial Inclusion, as we witness today. Among many important policy changes that brought benefits to its citizens, the Central Bank has helped Uganda:

  • Increase the percentage of adult population with bank accounts from 32.8% in 2013 to 39.5% in 2017
  • Increase the ratio of credit/GDP from 15.3% in 2013 to 20% by 2017
  • Increase the level of financial literacy through the continued implementation of the Strategy for Financial Literacy
  • Support the use of innovative technologies based on mobile money platforms to increase access to financial services to the unbanked
  • Enhance trust and transparency between financial institutions and clients by strengthening financial consumer protection on the regulatory level and promoting public awareness of consumer rights and responsibilities
  • Promote public-private partnerships (PPD) in the transformation of rural financial services
  • Inform policy by tracking progress on a bi-annual basis using AFI core set of Financial Inclusion Indicators

AFI has provided three grants to the Bank of Uganda (BoU), worth about 280,000 euros. The Bank’s capacities were built with a visit to Mexico and Peru to learn about financial literacy and consumer protection, and complete and present the curriculum on Financial Education. To support knowledge exchange, visits between Uganda and four countries (Philippines, Kenya, Brazil, Mexico) in the sphere of Banking Beyond Branches. Finally, AFI supported the BoU in developing its National Financial Inclusion Strategy, which is being launched today.

Emerging Issues

While considerable progress has been made on financial inclusion, Hon. Deputy Prime Minister, more is needed now and perhaps the next phase is even more crucial as we drive towards policy implementation to enhance sustainable development. We still need the support of Government and the high-level support that has been rendered to Bank of Uganda and other regulatory organisations and the private sector to bring us this far. We thank the Minister of Finance for supporting the policy improvements that have led to these gains.

Digital Financial Services

Embrace digital financial services (DFS) to achieve responsible scale and also to level the playing field for women, youth and SMEs, people living in remote areas, and forcibly displaced persons. DFS is a major driver for financial inclusion. A recent McKinsey Global Institute report reveals that DFS can increase GDP in developing nations by $3.7 trillion dollars by 2025 with the potential to create 95 million jobs across all sectors. We see DFS starting to play a key role in agriculture value chains in Kenya. Rural farmers can now link directly to markets without having to spend endless hours scouting for markets and getting payment in cash, which is risky. DFS has also brought about efficiencies in G2P (government to people payments) and has led to increased efficiency in most organizations as transactions including utility bill payment and tax payment can now be done in the comfort of our homes or offices, and in an efficient manner using mobile technology.


The last World Bank Findex still indicates that the gap on access to financial services between men and women remained at an average of 9% at the global level. This is also true in the case of Uganda where access for men as at the last Finscope was at 44% and women 36.4%. We should strive to close this gap as we enhance access to financial services. Again, studies also suggest that increasing access for women would see more GDP growth. The Denarau Action Plan on increased access to financial services for women is AFI’s response to this challenge. As an AFI member, no doubt, Bank of Uganda will live up to AFI’s global efforts for members to reduce this gap by half by 2021.

Financial Inclusion and Climate Change

NFIS should embrace policies that are responsive to mitigating the impact of climate change. It is the poor that are gravely impacted by climate change, excessive pollution, droughts, floods, hurricanes all require us to develop policies that will not worsen these while at the same time providing affordable access to health insurance, drought cover and restoration costs when property is destroyed. The financial inclusion agenda is therefore big and continuous. 

Financial Inclusion and Financial Stability

Driving financial inclusion does not mean losing sight of our financial stability mandate. Financial inclusion contributes to financial stability by diversifying financial assets to often ignored segments such as unbanked and underbanked individuals and small businesses. Both bank assets and liabilities relative to GDP are low in Sub-Africa compared to other regions thus again offering us great opportunity to develop a stable and sustainable banking sector. Sub-Sahara Africa Bank deposits to GDP is 23% while bank assets to GDP is 16%. For rest of the world this ranges from 44-63% for bank deposits and 36-44% for assets. The potential is obviously glaring. Surprisingly, “not enough money to invest” is not the main reason many Ugandan’s are not investing as by the last Finscope Survey 46.9% of those surveyed stated that lack of adequate information on savings was the reason while 43.7% attributed this to lack of sufficient resources. Also surprising, this had not much to do with formal education as this persisted even among people with qualifications as 30.6% with O level+ also said cited lack of adequate information. Again, this offers huge scope for us to intensify our financial education and financial literacy efforts.

Allow me to conclude by saying that financial inclusion is no longer an issue prevalent in developing countries alone. In the aftermath of the global financial crisis, income inequality is rising across the world, with differences between the rich and the poor, the financially included and the financially excluded, becoming increasingly obvious in high income and developed countries.  

Financial inclusion is one of the key enablers of many of the Sustainable Development Goals as highlighted in the Addis Ababa Action Agenda on Financing for Development adopted by the United Nations in 2015.

Finally, financial inclusion serves as a powerful element for progress in education, health and other basic public needs, as well as contributing even to climate change and sustainable development.

I wish to thank you for welcoming me to this beautiful country and assure you of AFI’s support as you continue to implement your national financial inclusion strategy.

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