Mobile money serving urban areas most - BOU

Mar 29, 2013

Mobile Money outlets are concentrated around the urban areas, and roadsides as opposed to the rural areas that are already under served by financial services, new data has revealed.

By Samuel Sanya

Mobile Money outlets are concentrated around the urban areas, and roadsides as opposed to the rural areas that are already underserved by financial services, new data has revealed.
    
A four-month survey by the Bill and Melinda Gates Foundation revealed that mobile money outlets are located in close proximity to commercial banks as they need to rebalance their cash float every now and then.

“While mobile money services have greatly increased financial inclusion, their geographical reach has remained along main roads and around commercial banks as opposed to spreading out in the rural areas where we need them to be,” a Bank of Uganda (BOU) official noted.

“Their contribution to financial access has been marginal. We need them in areas where it is not viable to have bank branches.”

The survey shows that 99.7% of all urban residents can access a mobile money branch within a 5km radius compared to only 32.8% of rural residents. Karina Broens Nielsen, a programme officer with the foundation, noted that the mobile money outlets increased the geographical reach of financial services by just 3.8%. Commercial bank branches reach 18.4% of the total population, ATMs reach 21.4%, microfinance institutions reach 26.5%, savings and credit organisations reach 37.3% and mobile money reaches 41.1% of the entire country.

Mobile money service providers are majorly located by the road side as a security measure. Mireya Almazan, a programme officer with the foundation noted that the services are eventually expected to spread into more populated rural areas.

Transactions worth more than sh11.7 trillion have been made through the mobile money system with 8.9 million registered users since March 2009 according to BOU data. The figures are a sharp contrast to slightly over four million commercial bank account holders despite the existence of the banking sector in Uganda since 1912.

Justine Bagyenda, the BOU executive director, supervision noted that the reach of banking services has grown over time with 495 bank branches in 2012 from 393 branches in 2010 and 714 ATMs from 625 ATMs in the same period.

“Technological advancements have ensured that access to cash in and cash out points is extended beyond the traditional banking system,” she said.

“The use of Geographical Information Systems (GIS) analysis in identifying the distribution of cash in and cash out points relative to where people live provides an important indicator for all stakeholders in the financial sector,” she added.

 

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