Uganda Finance Minister wants Agent Banking linked to security

KAMPALA, UGANDA-  Uganda’s Finance Minister Matia Kasaija has urged that the implementation of agent banking should be done in collaboration with Police and other security agencies in order to help the fight against theft, burglaries and robberies in the new sector.

The Minister who was officiating at the launch of the Shared Agent Banking System to increase financial inclusion and enable penetration of banking services also urged banks to do mass sensitization about agent banking so that the population can appreciate it and be able to use it.

“Bank of Uganda should monitor this product and review its implementation accordingly. We shall do all the necessary support in terms of allocating funds to help internet connection to support agent banking,” said Kasaija at the Uganda Banker’s Association Head Offices in Muyenga, a Kampala Suburb.

Agent Banking is an extension of banking services outside the conventional bank branches, where a licensed and supervised financial institution contracts a third party operator (agent), who is approved by Bank of Uganda, to provide permitted financial services on its behalf.

The Shared Agent Banking System will enable connectivity between member banks to enable agents serve customers of any other bank to minimize duplication of agency networks and increase points of presence to ensure countrywide coverage.

Seven Banks, which include Stanbic Bank, Barclays Bank (soon to rebrand as ABSA Bank), Bank of Africa, Diamond Trust Bank, DFCU Bank, Housing Finance Bank and GT Bank have already connected to the system. There are other 14 banks that are at different statges of intergration process and securing the necessary regulatory approvals. Uganda has 24 Commercial Banks supervised by the Bank of Uganda.

Wilbrod Owor, the Executive Director of Uganda Banker’s Association noted that for the start, agents will be allowed to reimburse a maximum of Ush4million.

“This is a major milestone for the Banking Sector in Uganda. Extension of Banking services and bringing on board the bigger proportion of our population to the formal banking system is the ultimate objective,” he said.

Owor said they target to have 14,000 agents in the next three years.

Arthur Isiko, the Managing Director of Bank of Africa, one of the seven banks already connected to the shared system said this initiative is one avenue of achieving the delivery of a cost effective financial service that will provide employment to the Ugandan community.

Paul Mbugua, the Group Managing Director of Electics International  Ltd, the technology firm that partnered with Uganda Bankers Association to develop the platform said together with the banks, they have built a secure platform that will facilitate acess to real time transactions.

An agent can be a petrol station, a supermarket, a permanent mobile money agent, a pharmacy, a retail shop or hardware store who will earn a commission from transactions that will be made.