InterMedia’s 2017 Financial Inclusion Insights (FII) data showed a big gain in financial inclusion last year, marking an acceleration of the upward trend in financial inclusion from 2013 to 2017. 

Mobile money is driving the increase in financial inclusion. Banks and nonbank financial institutions, such as microfinance providers, continue to serve a smaller share of the market compared to mobile money (see figure below).

Between 2013 and 2017, financial inclusion grew from 33% to 46% of adults (age 15+). The 2017 FII survey showed the largest annual increase in five years, amounting to 6 percentage points. Registered users of mobile money increased by 5% of the adult population from 2016 to 2017, and 94% of financially included adults had a mobile money account. An additional 19% of adults were unregistered, over-the-counter users of mobile money. Motivating the large group of unregistered users to adopt accounts should drive future gains in financial inclusion. In support of continued growth in financial inclusion, the Government of Uganda launched the National Financial Inclusion Strategy (NFIS) 2017-2022 in October 2017. The strategy focuses on expanding financial literacy along with financial inclusion. FII data highlights some of the barriers that will need to be addressed for the successful implementation of the strategy.

Currently, only 24% of the adult population is financially literate.* The 2013 Strategy for Financial Literacy in Uganda focused on introducing financial literacy programs to existing institutions such as schools, universities, and workplaces, and on bridging gaps in rural and poorer areas by creating training centers. Positive results are shown by the rise in financial literacy from 18% to 24% between 2016 and 2017.** However, Uganda’s rural poor population – which constitutes the majority of nonusers according to FII data – are still the most financially illiterate compared to other demographic groups. A focused effort to educate the rural poor may help increase their financial literacy and encourage them to adopt financial services.

Key indicators of readiness to adopt digital financial services are higher than financial literacy, but growth of registered mobile money users is constrained by the lack of phone ownership and phone skills. Phone sharing remained common in 2017; only 54% of adults owned a mobile phone, and a further 27% reported using a borrowed or shared phone. About 4% of adults owned a SIM card but not a phone. SIM ownership is necessary for registering a mobile money account, but SIM ownership in 2017 was unchanged compared to 2014 (see figure below). 

Lack of the official identification necessary to open an account is a lesser constraint than SIM ownership – 81% of adults had the necessary ID in 2017. However, the extension of national identity cards to the entire population went into reverse in 2017, as ownership of the necessary ID dropped to 81% of adults, compared to 89% in 2016. 

Another key indicator of digital readiness, the ability to send a text message, has been consistently lower than SIM ownership. Phone skills are improving, however, as 55% of adults in Uganda reported having the ability to text in 2017, compared to only 48% in 2016. While nearly all registered users of mobile money reported having at least “a little” ability to perform a financial transaction on a mobile phone, only 21% of adults reported having “complete ability.”

Those who lack digital skills and financial literacy tend to rely on mobile money agents to complete transactions over the counter. These unregistered users made up nearly one-fifth (19%) of adults in 2017, nearly double the 2014 figure of 10%. Women, rural residents, those living below poverty, and adults under 35 years old formed the majority of unregistered users (see figure left). While unregistered users still have access to financial services, the lack of a registered account prevents them from using advanced activities such as savings, taking a loan, insurance or investment. Converting this group to registered account ownership is an important way of expanding financial inclusion.

Agent absenteeism was reported by 59% of unregistered users as a negative experience with mobile money agents. Also, poor network connectivity was a widely reported problem for using mobile money in rural areas. A key component of NFIS is to expand financial points of service and introduce agent banking to these areas.

Lastly, a significant focus of Uganda’s NFIS is on building a credit infrastructure and expanding the use of formal institutions for saving, borrowing, investment and insurance. In 2017, just 27% of adults reported using an account for an advanced activity beyond basic transfers, deposits and withdrawals. Nevertheless, the advanced user group grew strongly by 5% of the adult population between 2016 and 2017. Advanced users are predominantly rural, above-poverty males who increasingly use mobile money for storing or safekeeping funds. New interest-bearing mobile money savings products had not seen significant uptake at the time of the survey, but there is clear demand for using mobile money as a savings instrument.

Uganda continues to make progress towards universal financial inclusion due to the government’s enabling regulatory and policy environment, and its commitment to increasing financial literacy, phone and digital skills, and broadening access points and digital infrastructure in rural areas. As digital readiness, financial literacy and mobile infrastructure continue to improve, we expect to see sustained progress on the customer journey as nonusers convert to unregistered use of mobile money services, and unregistered users adopt registered accounts.

* Financial literacy encompasses the basic knowledge of four fundamental concepts in financial decision making: interest rates, interest compounding, inflation, and risk diversification, measured by the Standard and Poor’s Rating Service’s Global Financial Literacy Survey.
** Data for financial literacy was not available for FII surveys in 2014 and 2015

For more information regarding the FII program in Uganda, read the 2017 Uganda Annual Report, or contact Samuel Schueth, Program Lead, Financial Inclusion Insights. If you are interested in seeing additional information about the factors that affect financial inclusion in Uganda, we encourage you to visit the Data Fiinder at

Financial Inclusion Insights is an ongoing research program funded by the Bill & Melinda Gates Foundation and designed to build meaningful knowledge about how the financial landscape is changing across eight countries in Africa and Asia (Bangladesh, India, Indonesia, Kenya, Nigeria, Pakistan, Tanzania and Uganda).