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Cashless payment surge in Uganda as the informal sector leads with 80% of transactions

Uganda’s financial sector is experiencing an interesting development given the wave of financial inclusivity via cashless payment that is currently sweeping through its economy. A recent report showed that cashless payment is beginning to catch on, and 80% of mobile transactions are done by people in the informal sector.

Cashless payments surge in Uganda as the informal sector leads with 80% of transactions
  • 80% of Uganda’s mobile transactions are coming from the informal sector.
  • MTN Mobile Money's director applauds growth, noting that it is encouraging.
  • However, there exists the issue of high volume low-value payments within the sector.

As seen in The Monitor, a Ugandan news outlet, telecoms have noted the adoption of cashless payment and have traced its source to the informal sector.

These telecoms, however, noted that the 80% of people alluded to earlier pull off the least amount of mobile transactions in the country, as 20% of high-value mobile money users pay.

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MTN mobile money managing director, Mr. Richard Yego told the Monitor that the use of cashless payment amongst people in the informal sector is a welcomed development.

“The increase in the volume of transactions among the people in the informal sector was very encouraging because it implies that the adoption of cashless payments is growing in the informal sector compared to the formal segment,” Mr. Yego noted.

“The informal sector is steadily embracing cashless payments. However, the larger value transactions are predominant in the formal sector businesses. We see high volume and low-value transactions in the informal sector and high value and low volume transactions in the formal segment,” the managing director added.

The 80% of transactions by the informal sector according to Mr. Yego range from 0 to Shs60,000, while 15% are between Shs60,000 to Shs250,000, and 5% range from Shs250,000 to Shs5,000,000.

The managing director also highlighted the overall increase in mobile money transactions, noting that in just a year, said transactions have doubled.

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“Mobile money pay daily transaction value has doubled in the last 12 months from Shs2 million to Shs8 million,” Mr. Yego said.

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