UGANDA FAST FACTS KEY INSIGHTS DATA DEEP DIVE INDEXES PRICING OPERATORS CONCLUSION

FAST FACTS


VOLUME OF REMITTANCES
USD 1353 million
World Bank, 2020
AVERAGE PRICE OF REMITTANCES TO SEND 200 USD
11%
RemitSCOPE Research, 2020
TOP 5 COUNTRIES

VOLUME OF REMITTANCES
USD 1353 million

World Bank, 2020


AVERAGE PRICE OF REMITTANCES TO SEND 200 USD
11%

Remitscope Research, 2020


TOP 5 COUNTRIES


FINANCIAL INCLUSION
78% of adults have an account at a financial institution, incl. mobile money
FinScope, 2018
NUMBER OF OPERATORS
sending to:
22
COMPETITIVE MARKET

RemitSCOPE Research, 2021
paying out:
328

RemitSCOPE Research, 2021

FINANCIAL INCLUSION
78% of adults have an account at a financial institution, incl. mobile money

FinScope, 2018


NUMBER OF OPERATORS
sending to: 22
*COMPETITIVE MARKET

RemitSCOPE Research, 2021

paying out: 328

RemitSCOPE Research, 2021


KEY INSIGHTS

ACCOUNTS AND DIGITAL PAYMENTS

Opportunities to send and receive remittances through digital channels are high

Mobile money, and the blend of formal and semi-formal financial services, have driven up Uganda’s financial inclusion rate to 78%, second highest in East Africa. This means opportunities to send and receive remittances through digital channels are high. There are urban/rural and gender gaps in financial inclusion that need to be addressed.


Seven mobile money providers operate in Uganda, with MTN and Airtel having 80% market share, making it an oligopolistic environment. These are the only two MMPs to offer cross-border remittance services.


Third party providers enhance the basic products offered by MNOs, embedding payments in a variety of use cases in the market. Uganda has an active fintech environment: 71 fintech and 16 innovation hubs.

01

02
DOMESTIC PAYMENT INFRASTRUCTURE

A developing digital payment ecosystem with innovations in agency banking

The BoU has been upgrading and developing the digital payments ecosystem. Electricity and ICT infrastructure challenges in rural areas limit digital financial inclusion across the country.


Although the payments landscape is largely fragmented, Uganda has achieved interoperability at various levels mostly through bilateral agreements. The BoU acknowledges plans to facilitate improved interoperability and include other non-bank participants.

Uganda has an innovative, shared-interoperable agency banking network model.


03
LICENSING & REGULATORY ENVIRONMENT

The regulatory environment for remittance businesses is undergoing change

In September 2020 the BoU published the National Payment Systems Act and new regulations released March 2021. These outline the licensing of operators of payment systems, payment service providers and issuers of payment instruments.


These regulations are very new and companies with previous approval to operate payment services will have six months to get licenced. It should result in a clearer market for digital financial service providers and payment service providers, while increasing competition and consumer protection.


The Foreign Exchange Regulations (2006) are also under review; therefore, the status quo is subject to change in coming years.

DATA DEEP DIVE



LINK TO KEY REMITTANCE REGULATION

Remittance activities have been regulated according to the BoU’s The Foreign Exchange Regulations 2006 with Guidelines for the Licensing and Operation of Forex Bureaus and Money Remittance Companies, 2018. There are now new regulations for payment service providers.

INDEXES





IMPORTANCE OF
REMITTANCES

01
score
1 Senegal 88
15 Mali 54
16 Uganda 50.5
17 Ethiopia 50.5
41 Botswana 13

DIGITAL
READINESS

02
score
1 Kenya 100
2 Uganda 100
3 Gabon 96
40 Gambia 18
41 Mauritania 12

OPENNESS
TO OPERATE

03
score
1 Kenya 100
7 Malawi 85.5
8 Uganda 85
9 Benin 81.5
30 Zimbabwe 30.5



What do these numbers mean ?



IMPORTANCE OF REMITTANCES


This is a composite score that reflects the size of formal remittance flows to the receive country, how important these are to the country's economy and, (at household level) the proportion that receive money from overseas (including informal). Weights are applied by experts. Scores out of 100.


DIGITAL READINESS


This is a composite score that reflects how ready a country is for international remittances to be terminated directly into digital accounts (including bank account and/or MM). The Index includes whether the regulation permits money to be received into mobile wallets, account ownership, and whether there is domestic MM interoperability. Weights are applied by experts. Scores out of 100.


OPENNESS TO OPERATE


A composite score that reflects where barriers to entry/operate are low for different types of market players. Factors include: lack of specific guidance for RSPs; existence of exclusivity practices; if there is a significant parallel FX market; the numbers of operators sending to a country and international remittance payment aggregators present. Weights are applied by experts. Scores out of 100.



For more information on how the indexes were calculated please download our methodology.


PRICING

THE AVERAGE COST OF SENDING MONEY TO UGANDA IS HIGH BY AFRICAN STANDARDS

The average cost of sending remittances to Uganda is 11% of the send amount however this is skewed based on high-cost services from Tanzania. Margins on the FX rate make up a significant proportion of the total cost to consumers.

AVERAGE COSTS ARE HIGH BUT THERE ARE SOME NEW LOW COST DIGITAL SERVICES

The average cost of sending money from Tanzania is skewed by a few extremely high-cost bank services. The average cost of sending money in other main corridors is much more on par with the global average. There are a few very new, low-cost digital services from Kenya to Uganda.

AVERAGE COST BY METHOD TO SEND EQUIVALENT OF USD200 TO UGANDA

There is significant variation in pricing between corridors and channels; however, internet services are the most competitive and those relying solely on the use of agents pay the highest fees. Bank services, although online or in person, skew the end-to-end digital services to be quite expensive. Without banks including, end-to-end digital services are an average of 3.18% of the send amount. This underpins the need for financial inclusion and innovation to support access to the cheaper services.

LIST OF OPERATORS

Operators sending to Uganda (22)

ACE Money Transfer
Airtel
Azimo
CashMinute
ChipperCash
Dahabshiil
Eversend
Juba Express
MCash
Micropay Mobile Money Service
MoneyGram
M-Pesa
M-Sente
MTN Mobile Money
Ria
SimbaPay
Small WorldY
Transfast
Wave
WorldRemit
Xoom

Operators Paying Out (328)

ABC Capital Bank Uganda Limited
Absa Bank Uganda Limited
Afriland First Bank Uganda Limited
Bank of Africa Uganda Limited
Bank of Baroda Uganda Limited
Bank of India Uganda Limited
Cairo International Bank Limited
Centenary Rural Development Bank Limited
Citibank Uganda Limited; dfcu Bank Limited
Diamond Trust Bank Uganda Limited
Ecobank Uganda LimitedK
Equity Bank Uganda Limited
Exim Bank Uganda Limited
Finance Trust Bank Uganda Limited
Guaranty Trust Bank Uganda Limited
Housing Finance Bank Uganda Limited
KCB Bank Uganda Limited
NCBA Bank Uganda Limited
Opportunity Bank Uganda Limited
Orient Bank Limited
Posta Uganda (Uganda Post Ltd.)
Stanbic Bank Uganda Limited
Standard Chartered Bank Uganda Limited
Tropical Bank Limited
United Bank for Africa Uganda Limited
Africel Uganda
Airtel Money
MTN Mobile Money
Safaricom
Smile Telecom
Uganda Telecom
TRUST BANK
+212 forex bureaus
+7 Mobile Money Operators
+78 Money Remitters

FINAL THOUGHTS

A DIGITAL ECOSYSTEM WITH EVEN MORE EXCITING TIMES AHEAD

There are exciting developments in Uganda for remittances with improvements to domestic interoperability planned, roll-out of a new national ID scheme, a real-time eKYC scheme for ID verification planned, an innovative shared agency banking network to address rural financial inclusion, high-use of mobile money, a burgeoning fintech sector and new regulations for payment service providers. Hopefully this will result in a more efficient and cheaper remittance market.


Uganda is one of the pilot countries chosen for PRIME Africa. As such, a full diagnostic report has been developed and presented to key stakeholders in the country. The diagnostic details all aspects of the remittance market, including key players, stakeholders, and recommendations. There is also a National Remittance Roadmap for Action First Draft published and shared with stakeholders.