The financial sector in Uganda has diversified with the evolution of mobile money which has accelerated the penetration of economic services with over 23 million mobile money wallets and 14 million bank accounts within the country.
African Union finance experts say mobile money penetration remains a key enabler and driver of digital innovation and adoption resulting in a lift in productivity in key sectors.
This has led to making jobs within the digital economy with financial technology (fintech) startups within the region operating in an exceedingly big selection of domains like education, healthcare, consumer services, and agriculture among other services like New NFT technology.
Covid- 19 effect
The business model of fintech works totally on transactions, with the most denominator or driver being the power to spend.
According to Peter Kawumi, the President at Financial Technology Service Providers Association of Uganda (FITSPA), this, successively affected fintech growth, but later adjusted to develop products that were relevant for the pandemic. Kawumi points out Xente and Jumia which, for example, allowed businesses to start out selling products online.
Fintechs have largely relied on working capital funding to develop scalable products that may serve across many markets.
The question of why Kenya and Nigeria are seemed to be thriving in fintech, consistent with Kawumi is because their populations are higher and their products have the power to scale faster.
The fintech sector is additionally changing with big risk capital funders that specialize in flagship products which have capability of integrating many services.
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Where are the opportunities?
The prediction for fintech usage in 2021 is predicted to rise as more people tackle using mobile money and banking services. Currently, Kawumi says, this is often hinged upon prospects of growth in mobile money usage from the present 23 million mobile money accounts and 14 million bank accounts, which partially are expected to rise in 2021, and also the subsequent years to come back.
Kawumi says there’s a large young population that continues to be unserved, opening a large opportunity for investors.
He notes that plenty of investor funding and opportunity is in Research and Development for fintech products, and once you get the merchandise right, then, it provides an opportunity for growth.
The e- Conomy report also projects a 35 percent growth of the electronic payments market over the subsequent two years as Internet subscribers’ increase.
Kimbugwe believes beyond the conventional growth in fintech usage, the entrant of recent players within the market is predicted to remodel how fintech operates.
The same old suspects within the industry also will modify from simply doing payments aggregation, to getting into other solid products,” she explains.
It seeks to place in situ a framework to facilitate the enactment of a Payment System law; specify the roles and responsibilities of all the payment systems stakeholders; ensure the safety of all payment systems within the country; foster consumer protection; enable increased access to electronic payment systems to scale back cash-based payments, and promote innovations.