Posta Uganda to launch financial services

By John Odyek

Posta Uganda will launch financial services to use its country wide postal networks to promote financial inclusion especially the unbanked rural communities.

Financial inclusion is the provision of basic financial services to people without access to such services.

These services include money transfers, savings, payments, insurance and credit.

James Arinaitwe, managing director Posta Uganda said that the post office was not only for posting and receiving letters but their license allows them to provide financial services.

This was during the opening of Universal Postal Union and Pan African Postal Union conference held at Silver Springs Hotel, Kampala.

It was organised by the Uganda Communications Commission under the theme 'Financial services and financial inclusion'.

 "We want to launch the financial services in January 2016. We shall start like a microfinance institution and grow our services to become a micro-deposit taking institution. We shall partner with existing players in the banking sector such as Post Bank and any bank with networks," Arinaitwe said.

Arinaitwe said Posta Uganda has 50 branches it manages directly countrywide and 140 franchise agencies.

He said the financial services will improve the business sustainability, survival, profitability of the postal organisation. He said their franchises that were getting low businesses might improve and their staff with little work will get more work.

Arinaitwe explained that Post Bank Uganda, was a different entity from Posta Uganda. He said the two were created as separate entities after the split off in 1998 from the Uganda Post and Telecommunications Corporation.

Eng. Jonas Bantulaki, director, competition and consumer affairs, Uganda Communications Commission said the commission has encouraged private sector participation in the postal sector.

He said this has seen a remarkable growth in the number of licensed courier operators.

Henoted that there were 32 licensed postal and courier service providers. He said the letter box penetration rate stands at one box for every 94 households.

"The most outstanding challenge of the postal sub-sector is the insufficient use of ICT. This has made postal services less efficient as compared to telecommunications and Internet services," Bantulaki said.

He said the commission wants the postal and courier companies to modernize their services in-order to keep in touch with the market through provision of affordable and reliable postal and ICT services to the customers.

Dr Jimmy Pat Samanya, permanent secretary ministry of information, communication and technology who opened the conference said government was working with various stakeholders to improve postal services and begin financial services and financial inclusion.

Samanya said the postal sector should stop trailing behind other communications sectors in terms of growth and innovation.

"We need to capitalize on the postal networks going to rural areas to provide financial services. ICT can be used to generate new business models. Possible opportunities are hybrid mail, electronic management, tracking and tracing or products and services, e-commerce management and e-government services. The emergence of e-post means ICTS are being used to generate new postal businesses," Samanya said.

Aduloju Raheem Kolawole, assistant secretary general Pan African Postal Union said government should make use of Postal branches that are sometimes idle to provide financial services.  He said US$60b (sh180 trillion) are transferred annually to Africa from Europe but only 1% comes through the postal networks and more could come through the postal networks.

Kolawole said in some remote places the presence of a post office was the only sign of government and the public has high level of trust in the post system. "Financial inclusion requires efficient use of technology, low cost services and quick decision making processes. The postal networks should partner with other players but avoid exclusivity agreements," Kolawole said.

David Avsec, account relationship coordinator Universal Postal Union, Switzerland said financial inclusion is one the key strategies of the union along with innovation and integration. He said financial services can improve the lives of families.

Avsec also deputy director Postal Technology Center said the region has potential in money transfer and financial services field. "The union's intervention should develop intra and inter-regional money transfers in Africa but progress has been slow. We are deploying the International financial system to enable money transfers," Avsec.

Gladys Mutyavaviri, regional coordinator Universal Postal Union Zimbabwe said: "Provision of innovative financial services provides revenue critical for sustainability and survival of postal organisations. Financial inclusion enhances the relevance of posts in the rapidly changing environment."

Mutyavaviri said some of the financial services postal companies can provide include money transfers (domestic and international), basic banking services, bill payments, pension payments, loans and insurance services.