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Digital Finance increases in rural areas amid challenges

By Oyet Okwera

Added 15th September 2016 12:04 PM

The survey was a basis of a research carried out on 2,288 mobile money agents interviewed across the country

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Christopher Musoke; CEO at fsduganda addresses financial stakeholders at the launch of performance of digital finance held at Sheraton hotel.; Photo by Oyet Okwera

The survey was a basis of a research carried out on 2,288 mobile money agents interviewed across the country

A new survey has observed an increase in new mobile money agents in rural areas due to increasing demand for digital finance. The survey dubbed “Agent Network Accelerator” also revealed that most Ugandan mobile money agents enjoy the highest profits compared to other East African Agent Network (ANA) sampled in 8 countries.  

The survey was a basis of a research carried out on 2,288 mobile money agents interviewed across the country.According to Christopher Musoke, chief executive officer (CEO) at Financial Sector Deepening (fsduganda), there is need to prioritize training of more agents to help increase financial inclusion.

Musoke believes this is a good strategy to bridge the unbanked gap and encourage rural financing through bringing services closer.

Reports indicate that agents trained by telecom providers are more successful in terms of the number of transactions they carry out per day.

He was on Wednesday addressing different representatives of banks, telecom companies, and digital finance firms at Sheraton hotel during a symposium to launch Uganda Country Report. The survey was sponsored by Helix institute of Digital finance in partnership with fsduganda, Microwave, International Finance Corporation, United Nations and Bill and Melinda Gates Foundation.

 


Musoke also noted that most agent networks were uneducated which posed a challenge of likely loss of finances accruing from the illiteracy states. “Let us all, as stakeholders and service providers of different telecom companies be at the forefront of organizing trainings to equip agent networks with the correct skills as they go about with initiating transactions,” explained Musoke

However, fraud in the current digital finance has affected operations prompting telecom players to often change initiation procedures of transactions. In the symposium, telecom players agreed on the need to harmonize trainings of the agent networks and provide guidelines on fraud protection.

Ugandan agents report the highest incidents of crime and fraud among all the agent networks accelerator research countries. Despite these challenges, regulatory compliance is low and on average only 2% of customers show an identity card when performing transactions. Uganda’s fraud rate stands at 53% closely followed by Tanzania at 42% and Kenya at 22%

Ivan Ssetimba, a representative from Bank of Uganda said fraud has increased because the fraudsters target most unsuspecting people in the rural areas. Because new network agents are coming up in rural areas compared to urban areas, there is need for digital finance players to constantly remind agents about guidelines. This, he believes will help curb the cases of fraud registered by both the agents and clients.

Reports show that in Uganda, more than half the number network agents have reported the highest cases of fraud among the eight countries sampled out. 

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