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Uganda’s mobile money platform will help attract debt investors.
Uganda is planning to use mobile money platforms to sell government securities to its citizens. The government said the mobile money platform will help reduce the dependence on commercial banks and institutional investors for funding.
The Ugandan government also believes the initiative will help boost savings and investments; especially among its citizens and this will in turn also drive economic growth.
In Uganda many people do not have access to banks, but they have mobile phones and mobile money accounts. The Ugandan government initiative which is similar that of Kenya in 2017, proposes that persons with mobile money accounts can now have access to purchase government debts. With this platform even Ugandans in diaspora can also purchase these government debts, therefore widening the scope of investors.
In the past Uganda used commercial banks as primary dealers to auction its debts, especially treasury bills and bonds. Bids for these debts were submitted to the banks. But the introduction of this platform will boycott the banks and give citizens direct access to these government debts. it will also help reduce the government’s cost of borrowing.
Statistics show that out of Uganda’s 41 million population, about 23.6 million are mobile phone subscribers. This statistics definitely shows a huge market.
Having the largest mobile money customer base, MTN Uganda is likely to be the main beneficiary of this new initiative.
In Africa the use of mobile money is gradually becoming popular. The platform enables its users to transfer money and make payments for goods and services through their mobile phones.