Uganda has completely separated mobile money services from the regulation of the Uganda Communications Commission to the Bank of Uganda (BOU).
Under the new regulations, three companies were licensed to conduct mobile money services despite the questions and fears from the customers.
Airtel Mobile Commerce Uganda Ltd and MTN Mobile Money Uganda Ltd are the new companies formed and licensed for the services, along with M/s Wave Transfer Limited approved to operate under the Regulatory Sandbox Framework.
Airtel Uganda completed the separation process mid-June, technically transferring Airtel Money Business to Airtel’s affiliate, Airtel Mobile Commerce Uganda Limited (“AMC Uganda”). As a result, AMC will now conduct all Airtel Money Services in partnership with and through Airtel Uganda, while the service model to the customer remains unchanged.
Other companies that have applied for the license include Uganda Telecom, Africell, Mcash, Ezee Money and Interswitch.
Mobile money today plays an important role in financial intermediation by permitting savings to be invested into the local economy, increasing business productivity, stimulating job creation and boosting economic growth. With over one billion registered companies, mobile money assists in attaining global development goals, contributing to the economic empowerment of individuals and communities, including marginalised groups and businesses.
Impact of Separation of Mobile Money in Uganda
In Uganda, Mobile money has seen significant growth over the 10 year period ending December 2019. The industry registered 27 million accounts, processing around $20 billion per annum. The mobile sector in Uganda was previously dominated by two big MNOs, MTN and Airtel.
Over time, mobile money penetrated the Uganda economy increasing access to financial services. In the 12 years to 2018, formal financial inclusion as measured by FinScope Uganda increased from 28 % to 58 %, largely driven by mobile money.
Mobile money has positively impacted the Uganda economy over the years by ensuring social safety to citizens all over the country by efficiently transferring money from the urban areas to vulnerable families by reducing the cost base for distribution in banks. Additionally, it has played a big role in the growth of informal businesses through easy and efficient payment methods.
The separation of the services from the regulation of the Uganda Communications Commission to the Bank of Uganda (BOU) is expected to increase the efficiency of services in the country by allowing firms to invest and build capital over time, fostering the creation and expansion of business. Additionally, It also facilitates faster and more efficient government transfers.
The government also expects to collect more revenue from the services, given more companies have applied for the licenses to offer the services.