Under the agreement, Postbank Uganda will leverage Posta Uganda’s broad network of rural post offices
The International Fund for Agricultural Development (IFAD), Postbank of Uganda (PBU) and Posta Uganda have signed a grant agreement aimed at expanding the role of postal networks in the delivery of remittances and access to financial inclusion across the country.
The project agreement provides for "Scaling up remittances and financial inclusion in Uganda," It is targeted to provide remittances services in poor rural communities and in refugee settlements.
The IFAD grant agreement for €465,000 (sh1.8b) was signed by Adolfo Brizzi, director of IFAD's policy and technical advisory division.
Present was Alex Kayaayo, executive director Postbank Uganda. The signing took place following the Global Forum on Remittances, Investment and Development, held at the UN headquarters in New York.
Under the agreement, Postbank Uganda will leverage Posta Uganda's broad network of rural post offices to expand access to financial services for the rural population.
The post offices will be equipped with modern digital and mobile technologies for remittance delivery and financial services transactions, and postal staff will receive specialized training.
By March 2019, the project aims to increase the number of remittance recipients it serves by 50,000. It expects to provide remittance delivery services to 20,000 refugees as well as training in financial literacy.
The project aims to reduce transaction costs of sending money home to 3 percent (the Sustainable Development Goals target) and eliminate all corridors (for example between the United States and Uganda) above 5 percent.
It also expects to increase accessibility to remittance-linked financial products and services.
Globally, about 40 percent of remittances are sent to rural areas where the majority of poor people live. This money is spent on food, health care, better educational opportunities and improved housing and sanitation.