Banking on wheels for rural Ugandan workers

BANKING  INNOVATION

Over 4,000 employees of the 600MW Karuma Hydro Power have not had access to banking services.

The contractor of the project, Sinohydro Corporation Ltd has had to pay local area workers their wages by cash. This is because Karuma town where the project is located does not have banking facilities.

Giving cash to employees brings them excitement but also brings about the dangers of misusing money. Some use the money lavishly till it is finished before returning to work.

Joseph Oryem, LC1 chairperson Karuma Cell, Karuma town said the growing and changing town lacks a bank yet employees need banking services.

"The town lacks garbage collection services, lacks waste disposal sites, the health center needs upgrading," Oryem said. He was explaining the challenges the town now faces with the building of the dam in the area

Oryem raised concerns about the delayed community development action plan, the delayed resettlement action plan, the lack of electricity and clean water in Karuma town.

Bank of Africa has now launched ‘bank on wheels' to meet the needs of employees in Karuma Town.

Billy Bisanga, public relations officer Bank of Africa said the bank purchased and deployed a truck to traverse several towns to provide banking services.

He explained that truck was moved in nine remote towns in Northern Uganda. Bisanga noted that the truck was a Russian custom made, military grade truck. "It goes to different routes and towns on a weekly basis," Bisanga said.

The towns are in Oyam, Kiryandongo and Nwoya districts. Commercial banks in the past had shunned these areas due to their remoteness despite being active in producing agricultural products.

According to the Uganda Bankers Association, the number of bank accounts holders in Uganda stands at 7.4 million. The association plans to increase the number of account holders to 11.6 million in the next three years. There are 24 commercial banks in Uganda with many located in urban centers.

Banking has taken place in Uganda for over one hundred years but many Ugandans do not have access to financial services. This is due to the limited commercial bank outreach in many localities coupled with high the cost of providing financial services.

Although the Uganda Bankers Association has launched the Shared Agent Banking System in an effort to increase financial inclusion and enable the spread and penetration of banking services in Uganda, such services are still far from meeting the needs of rural communities.

Agent banking is an extension of banking services outside the conventional bank branches, where a licensed and supervised financial institution contracts a third party operator or agent, who is approved by Bank of Uganda, to provide permitted financial services on its behalf.

An agent banker could be a petrol station, a supermarket, a permanent mobile money agent, a pharmacy, a retail shop or hardware store that is fully licensed and has been existence for one year but they are not yet seen in rural areas.

Jackie Tumuheire the public relations officer at the United Bank of Africa said they are rolling out agent banks country wide. "So far we have 50 agents country wide. By mid next year we will cover many districts. We do not have many branches but with agent banks we will be everywhere,"Tumuheire said.

Tumuheire added that the agent banks will need machines and where phones can be charged. The machines can be charged to provide banking services. She said the machines can be used in remote areas with limited access to power infrastructure.

Banking agents are usually equipped with a combination of point-of-sale (POS) card reader, mobile phone, barcode scanner to scan bills for bill payment transactions, personal identification number (PIN) pads, and sometimes personal computers that connect with the bank's server using a personal dial-up or other data connection.

Clients that transact at the agent use a magstripe bank card or their mobile phone to access their bank account or e-wallet respectively. Identification of customers is normally done through a PIN, but could also involve biometrics.

With regard to the transaction verification, authorisation, and settlement platform, banking agents are similar to any other remote bank channel.