Ugandan Fintechs urged to embrace Artificial Intelligence, blockchain 

Financial technology companies (Fintechs) operating in Uganda have been urged to harness the power of emerging technologies such as Artificial Intelligence (AI) and blockchain to enhance financial inclusion.

The Deputy Director of the Department of National Payment Systems at Bank of Uganda (BoU), Mr James Ivan Ssentimba, said while Fintechs have already demonstrated their capacity to promote financial inclusion by enabling micro, small, and medium enterprises (MSMEs) access to several services, more needs to be done.

“According to the FinScope Uganda survey of 2023, financial inclusion stood at 81 percent compared to 77 percent in 2018. So we see increasingly people accessing financial services. But this increase in financial inclusion was largely driven by the uptake of mobile money services,” he said.

“By leveraging these technologies MSMEs can improve access to credit enhance operational efficiencies, and ultimately contribute more significantly to Uganda's economic growth and development. So as Fintechs, you have a very, very big role to play, given the huge credit gap that exists between what MSMEs need as financial services and what they do receive from traditional banking services,” he added.

He was speaking in Kampala on Tuesday at the MSME - FinTech Workshop organised by Sustainable Business for Uganda (SB4U) in collaboration with the Financial Technology Association of Uganda (FITSPA). SB4U is a partnership between the Government of Uganda, the Private Sector Foundation (PSFU), and the European Union.

Ms Doreen Lukandwa, the vice chairperson of FITSPA, whose membership is over 200 members, also emphasised the significance of adopting the latest technologies such as blockchain and AI.

“The benefits include enhanced efficiency and productivity. FinTech solutions enable SMEs to automate repetitive tasks, streamline costs, and complex processes, and make data-driven decisions to optimise their financial strategies, freeing up valuable time and resources for you to focus on your core business activities,” Ms Lukandwa said.

She also emphasised the need for partnerships between FinTech companies and banks, as well as funding opportunities to support Ugandan FinTech businesses. She encouraged companies to network and gain insights into the needs of small businesses to develop cutting-edge solutions.

Mr Ssentimba said the Central Bank has created a conducive environment to enable Fintechs to thrive and is now working towards promoting quality services.

“And now we are working towards the quality dimension. We want to see more service availability in terms of platforms. We want to see more quality services being provided by payment service providers. And we want to see that customers benefit from these services,” he said.

Mr Sofian Dahmani, the programme officer at the European Union Delegation to Uganda, urged Fintechs to take advantage of existing credit lines to serve more Ugandans.

“We facilitate access to capital by linking MSMEs to sources of capital or providing them with the capital needed for business growth, and we support businesses in their post-investment phase to utilise the funds received efficiently. Some of our facilities focus on the banking sector, while others provide alternative financing,” he said.

“I would like to encourage all of you to consult our new Access to Finance Portal for all the opportunities available for financing from the existing facilities of Team Europe as well as the Government of Uganda, other development partners, and financing institutions. The portal is available for anyone to view on the SB4U website,” he said.