Microfinance institutions to Spearhead drive for financial inclusion

President Yoweri Museveni has challenged microfinance institutions that are operating in Uganda to spearhead the drive for financial literacy and inclusion, to ensure that the country's economic growth is inclusive and sustainable.

The president said there is a need to harness the untapped potential of individuals and businesses currently excluded from the formal financial sector, and enable them to develop their capacity to engage in income generating activities.

"Access to and use of finance remains a big strategic bottleneck in Uganda and forms part of the ten strategic bottlenecks identified by the government that are affecting the banking sector.

We must therefore give particular attention to specific portions of the population that have been historically excluded from the formal financial sector either because of their income levels, gender, location, or level of financial literacy especially through the microfinance sector," the president said.

This was during the Micro finance CEO working group meeting at the Kampala City Royal hotel in Bugolobi , where he was represented by the minister of public service, Wilson Muruuli Mukasa.

The microfinance working group is an association of leaders from ten international microfinance organisations, seeking to create a more financially inclusive world using its expertise in the delivery of microfinance services.

The conference sought to merge local knowledge and best practices in Uganda with other partners with a strategic objective to increase financial services access and use through traditional and technology - driven solutions.

Museveni requested microfinance institutions to boost the financial position of the public, through financial literacy deepening, to help them come output of poverty and participate in the formal financial sector.

"Uganda is currently among the fastest growing countries in ICT innovations, which has facilitated the quick growth of e -commerce in the country, and also to an extent deepened financial inclusion. I want you to build on this and bridge the gap because currently, less 40% of adults have access to a formal account at any financial institution," he said.

He said broadening access to financial services will mobilize greater house hold savings, marshal capital for investment, expand the class of entrepreneurs, and enable more people to invest in themselves and their families.

He noted that although the banking industry has experienced significant transformation over the past years, statistics indicate that 62% of Ugandans still have no access to financial services.

This, according to the state minister for microfinance, Haruna Kyeyune, is because approximately 68.9% of the population lives outside the formal cash economy, making it hard to trap and record statistics.

Haruna said that although the banking industry has experienced significant transformation over the past three years, statistics indicate that 62% of Ugandans still have no access to financial services.

Available statistics from the Uganda Bureau of Statistics (UBoS) indicate that approximately 68% of Uganda's 64.9 million populations are none monetized, meaning they hardly touch money all year round.

The World Bank also indicates that there are at least two billion people across the world that are still financially excluded, with Uganda contributing at least  two million, one hundred and seventy six thousand people.