Initiative for Youth Empowerment and Transformation (IYET)
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Banking the unbanked: Improving youth financial Inclusion in Uganda

Banking the unbanked: Improving youth financial Inclusion in Uganda


This session was facilitated by Ronald Rwakigumba, Mercy corps, and aimed at discussing the different options for youth financial inclusion According to World Bank statistics, FY 2015/16, only 22% of the Ugandan population had bank accounts, access to financial services and the ability to borrow. The recent introduction of mobile financial services has improved access to financial services and the number of Ugandans with bank accounts has shot up from 22% to 35%.

Key pillars for youth financial inclusion

In order to increase access to financial services and empower the users of financial services to make rational decisions in their personal finances so as to contribute to economic growth, the group identified the four pillars below:

  • Pillar 1: Financial Literacy (FL) to ensure a more financially literate population empowered and equipped to make prudent choices on their personal finances.
  • Pillar 2: Financial Consumer Protection (FCP) to promote fair and equitable financial services, increasing transparency, fostering confidence, enhancing disclosures on bank products, providing mechanisms for handling complaints and ensuring privacy of consumer information.
  • Pillar 3: Financial Innovations (FI) aimed at establishing an effective regulatory framework for financial sector innovations in order to broaden financial inclusion while ensuring system stability and safety.
  • Pillar 4: Financial Services Data and Measurement (DM), whose goal is to monitor and measure financial inclusion indicators of access, usage, quality and welfare or impact of financial services on the lives of consumers (Consumer Protection).

The group also looked at the challenges faced by financial service providers in interpreting and implementing know-your-customer requirements developed by the Bank of Uganda. The group noted the lack of clarity regarding appropriate Know Your Customer (KYC) requirements for informal, semi-formal and formal mobile money merchants, schools, churches, mosques and other non-profit entities that wish to accept mobile money payments etc. To address the challenges, the group recommended the following measures:

  • Developing an electronic payments gateway to facilitate digital KYC. This will enable financial service providers to access identity information for KYC purposes;
  • New financing mechanisms and simplified technology;
  • The group also sought the need to identify relevant key financial inclusion indicators to determine the success or failure of the National financial inclusion strategy.RecommendationsKey recommendations from the group included:
    1. Value chain financing that improves quality and efficiency in financing agricultural chains by identifying the financing needed to strengthen the chain; tailoring financial products to suit the needs of the participants in the chain; reducing financial transaction costs through the direct discounting of loan; payments at the time of product sale; and using value chain linkages and knowledge of the chain to mitigate risks to the chain and its partner.
    2. The Village Saving and Loan Associations (VSLAs) should be linked to the banks to have more access to financial services. A few banks with these products like Barclays Bank, Post Bank, Bank of Arica have these products but more banks need to be encouraged to take up this system.
    3. Strengthen savings and credit cooperative societies (SACCOs). Participants were informed that government is working hard with the Uganda Cooperative Alliance to ensure that the SACCOs are strengthened.
    4. Use of technology to aid saving e.g. mobile banking system
    5. Financial literacy is urgently needed so that the youth in agriculture can easily take advantage of the government subsidies, benefits etc. The financial literacy will also lead to behavior change.
    6. Multi-sectoral approaches so that interventions in health and HIV are integrated into youth agricultural interventions.



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