“Our biggest concern with mobile money transfer is the operational risks. Regulators like the Uganda Communications Commission must ensure that there is an efficient infrastructure to limit risky transactions,” he said.
Uganda’s mobile money platform has had tremendous growth in the last five years with a current subscription of about 3.6 million users. However, mobile money subscription is still low compared to about 16 million Ugandans using mobile phone services.
According to Dr Kaskende, East Africa has been a model for the growth of mobile money financial services with regional telecom’s including Safaricom, MTN and Airtel among others playing the centre stage.
Recently Safaricom under its M-Pesa mobile money flagship was recognised during the Global Mobile Awards as the world’s leader in financial services extension to Kenya’s unbanked population.
Tanzania has about 18 mobile money subscribers compared to Kenya’s over 26 million subscribers. Data from the central bank indicates that about Shs123.5 trillion ($50 billion) was handled by mobile money agents and service points in Kenya, Tanzania, Uganda and Rwanda in 2011.
According to the International Monetary Fund, mobile money penetration has to be supported on the African continent in order to extend the reach of such services to the poor and the unbanked rural population.
This, the IMF says can help to support the banking sector that has been slow to grow its penetration especially in rural areas. For instance with decades of its (banking sector) existence, Uganda has only three million accounts shared among a number of people holding multiple accounts.