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Uganda: Banking Services Reach Villages
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The Citizen (Dar es Salaam)
24 July 2008
Posted to the web 24 July 2008
Dorothy Nakaweesi
The Post Bank has introduced mobile banking services to rural areas.
Called the Mobile Bank, the services are carried out through a van which is driven into rural communities to provide services to areas that are not served by any bank.
"When Post Bank brought services nearer through the mobile bank in Kapchorwa district, I was relived and can now access my account through either deposit or withdrawal once a week," said Ms Oliver Nawumbe.
Ms Nawumbe, a widow and a mother of three, operates a small business that sells onions and other farm produce.
Just a few months ago, she would have had to make a 350-km journey once a month to Kampala to access her bank account at Post Bank's Nkrumah Branch.
Now, the tedious and expensive trip to Kampala is unnecessary.
Her story mirrors the lives of hundreds of other Ugandans living in rural communities while demonstrating how banks are changing the tactics of market penetration.
Gone are the days when bankers were perceived as catering only to the well-to-do classes, and caring only about the large commissions they could generate through backroom deals in smoke-filled boardrooms.
The death of such perceptions has been a good thing, especially in Uganda.
For decades here, many low-income earners have shunned the country's formal banking systems, opting instead to keep their hard-earned wages in less secure, higher risk places - under mattresses, for example, or in home piggy banks, or even in holes dug in the earth of coffee plantations, covered with big stones as protection against thieves and errant rodents.
Mr Charles Ocici, the executive director of Enterprise Uganda, said:
"This scenario was and still is responsible for the current low savings culture in Uganda and other developing countries."
According to Mr Ocici, Uganda's savings rate stands at 12 per cent of the gross domestic product, compared with an average of 18 per cent for the rest of Sub-Saharan Africa.
However, Uganda's financial institutions are at the forefront of changing the statistic, driven in part by a climate of stiff competition for consumers in the financial sector, and aided by the liberalisation of the Ugandan market in the mid-nineties.
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While other institutions are engaged in elaborate promotions to entice customers to open up accounts and win prizes in return, Post Bank has taken a different approach.
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