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8.1 million don’t use banks â€" survey

By Vision Reporter

Added 20th August 2007 03:00 AM

ABOUT 8.1 million Ugandans do not use services of commercial banks or informal groups due to insufficient income to open or maintain bank accounts, a survey has shown.

ABOUT 8.1 million Ugandans do not use services of commercial banks or informal groups due to insufficient income to open or maintain bank accounts, a survey has shown.

By Sylvia Juuko

ABOUT 8.1 million Ugandans do not use services of commercial banks or informal groups due to insufficient income to open or maintain bank accounts, a survey has shown.

According to a survey carried out by the Steadman Group last year, only 2.4 million people have accounts out of a population of 30 million.

The FinScope Uganda report on financial access was unveiled at a press briefing at Kampala Serena Hotel. Steadman was supported by the Uganda Bureau of Statistics (UBOS) and FinMark Trust from South Africa.

The study was conducted between October and December 2006 and targeted about 3,000 respondents countrywide. It was funded by Financial Sector Deepening Project Uganda (FSDU) and the UK’s Department of International Development (DFID).

Paul Rippey, the manager of FSDU, observed that there was a relationship between the use of financial services and literacy.

The report shows that of the people who use formal financial institutions, 74% have been educated at secondary school or above, 24% up to primary level and only 2% are without any formal schooling.

Conversely, of those that are unserved, 25% have had no schooling, 50% have studied up to primary level and 25% up to secondary.

According to the report, 71% of Ugandans save, with forms ranging from formal to informal methods like under mattresses or keeping money with friends.

A high number of those who save (71%) use informal places like a secret place which they couldn’t disclose, while 27% use informal groups and 22% use financial institutions.

“There is a myth that Ugandans do not have a savings culture. The study showed that Ugandans do save even very poor people,” said Rippey.

“But they don’t save much and don’t necessarily have safe places to save. When you look at all the financial institutions, they are capturing only one third of the people.”

The report said many people that have access to financial institutions still choose to save money in secret places.

However, 20% of Ugandans said they had never saved while 9% used to save but no longer do so.

Regarding financial access by region, 72% of the population in the central region excluding Kampala, 67% (eastern) 66% (northern) and 51% (western) region lacked access to financial institutions.

8.1 million don’t use banks – survey

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