At the recently ended financial and digital inclusion webinar organized by Airtel Uganda on July 1st, 2021 under the theme; ‘Transforming Lives Through Digital Microfinance: Savings and Loans’, Ugandans were called and advised to take advantage of savings and loans to achieve their aspirations.
Mr. Joseph Lutwama, the Programs Director at Financial Sector Deepening Uganda, during the webinar, said. savings is just a starting point, that can never be enough to finance a business, and you need credit as well to achieve your desired goals.
“Whether you are going to borrow money or you are going to accumulate your savings and then invest it later, it all begins with savings. All we need to teach our people is to understand technology so that they get used to interacting with gadgets and change their mindset towards saving,” Lutwama explained.
The panelists at the webinar; Byamah Edgar; MD of KCB Bank, Joseph Lutwama; Programs Director at Financial Sector Deepening Uganda, Dr. Fred Muhumuza; Policy Development Analyst and lecturer at Makerere University School of Economics, and Amit Kapur; Chief Commercial Officer at Airtel Uganda —underscored the importance of technology and mindset if we are to deepen financial inclusion in Uganda.
According to statistics from Finacial Sector Deepening Uganda, only 5% of people in Ugandans take loans from banks and the rest don’t because of fear associated with failure to pay on time. To revolutionize and deepen the loans and savings culture in Uganda, the experts re-emphasized the role of innovation and synergies.
Realizing this, on June 1st, 2021 Airtel Uganda partnered with KCB Bank Uganda and launched two products; Airtel Money Supersaver and KCB Airtel Agent Float Financing. Airtel Money Supersaver is a mobile-based savings product while the KCB Airtel Agent Float Financing is a credit facility for Airtel Money agents.
“We wanted to make it easy for our customers to access credit for their businesses or other demands but also help them save some money with convenience. We strongly believe it’s through such products that we can deepen financial inclusion by extending reliable, safe, and secure financial services to people who find it difficult or inconveniencing to access banks,” Kapur said.
Kapur said with over 10 million Airtel subscribers countrywide, the majority have no bank accounts. Therefore the telco decided to position itself as the bank to the unbanked —enabling Ugandans to easily save and access loans right at the comfort of their homes and with no traditional collateral security.
Bankers as well, have been deliberate on easing access to banking services and are doing a lot more to diversify savings while ensuring there is continued trust with customers.
“Banks have been adjusting to reality fast, so to increase their reach. Now they are targeting financial inclusion as one of the key aspects of the industry. In terms of innovation, digital offering banks have to slowly invest in integration aimed at supporting commerce, payments, and savings,” Byama said. Adding that “Depositors continue accessing their money whenever they want it and that is due to the trust and confidentiality that we have built over time.”
Byamah also noted that “Diversifying savings, partnerships across different sector players including insurance, banks among others should be a major growth aspect which should be fronted.” Emphasizing that banks need to leverage more on partnerships to drive innovation.”
Dissecting the savings culture in Uganda, the experts highlighted the importance of trust and access to financial services.
“One needs to leverage their savings; a bank will not give you money unless they are sure that you have sufficient cash flows for you to be able to service the debt,” Lutwama stated.
Dr. Muhumuza concluding the webinar cited the need by Ugandans to consider credit backed by savings for any business to thrive.
“Money is the major transformer of the economies, it’s the blood of the economy, without credit, you can’t develop the economy. The partnerships between banks and the telecoms are really a welcome gesture which will in a long run leave a huge landmark on the economy.”
Notably, savings and loan products are not only in line with the government agenda to deepen financial and digital inclusion in Uganda by the year 2040, they will allow Ugandans access to customizable and convenient banking services.