Ugandan banks look to expand reach through agents

Wednesday, July 2, 2014

At least six banks have expressed interest in using agents to reach out to people outside the formal banking institutions, Bank of Uganda has said.

This financial year, government is expected to amend the Microfinance and Deposit-taking Institutions (MDIs) Act 2003, Bank of Uganda Act 2001, and the Financial Institutions Act (FIA) 2004 to introduce agent banking. It is intended to deepen financial inclusion in the country.

In a statement sent to The Observer recently, BOU’s Director for Communication Christine Alupo said: “The law in its current form does not permit agent banking.

More than six have expressed interest in carrying out agent banking, but this is not yet allowable under the current laws.”

Although she would not name the banks, she said the market was cheerful about this type of banking. But Centenary bank could well be one of those Alupo was talking about. Asked about the prospect of agent banking in Uganda, Centenary bank’s Managing Director Fabian Kasi suggested they couldn’t wait to roll it out.

“Definitely it [agent banking] is a good thing; we have been waiting for it,” Kasi said today. “It will help us reach more people without investing very much in the brick and mortar.”

Source: The Observer (link opens in a new window)

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banking, Base of the Pyramid, financial capability, financial inclusion, financial services