Kampala, Uganda | URN | At least 20 financial technology companies have been licensed by the Bank of Uganda to carry out services under the National Payments Systems Act. Another 50 applications are being processed by the industry regulator.
This is one of the achievements of the enhanced regulation of the industry, according to Albert Ntege, acting Director of the National Payments System department at the Bank of Uganda.
He says the public encountered many problems with modern financial systems for years because there was no streamlined regulation for the new and growing services which include money transfers, bill settlements, agriculture advisory and trade information.
Ntege says regulation usually follows innovation because regulations cannot be made before a service or product. He was speaking at the annual Financial Technology Service Providers Association conference in Kampala on Thursday, 13 October 2022.
The conference was held under the theme; Investment and Partnership: How to Thrive in Uganda’s Fintech Ecosystem and Beyond.
Jackie Ochola, the General Manager of Wave Transfers said that the steps a startup goes through before being fully regulated by the National Payments Systems have helped them come up with new innovations for the good of the customers.
She says for example when at the sandbox stage, they were able to install systems which made their services cheaper and managed to scrap for example, depositing and other charges.
Sandbox is a stage of development of a platform, in a testing or controlled environment in which new or untested software or system can be run securely. According to the Central Bank, several firms out of the 50 applications are still at this stage.
While the enhanced regulation has created a safer environment for the users, there are some challenges that have come with it, according to some service providers. Richard Yego, the Managing Director of MTN Mobile Money Uganda Ltd, says their freedom has become limited because the Central Bank can intervene, on top of more stringent “know your customer” requirements.
On the other hand, Yego says the creation of the National Payments Systems Act has made their services cheaper and quicker when there is a need to contact the Bank of Uganda, unlike previously when they had to go through commercial banks.
Jack Ngare, the Executive Director of Google Cloud, says there is a need to enhance the skilling of Ugandans so that there is a bigger workforce in the innovation Industry. This would help create even more competitive products, which would also attract more funding and in the end make the country more economically competitive.
Ngare, who gave a keynote address at the conference said universities should adjust their teaching so as to produce graduates who use the available basic tools like a computer or a smartphone for simple activities like trading.
Some of the licensed fintechs are MTN Mobile Money, Airtel Money, Mcash, Micropay, Interswitch, Agent Banking Company and Wave Transfer Limited. Others include Chipper Cash, Dusu Pay, Eversend, Xente, Swepe2Pay, Beyonic and Yo Uganda.