Experts tip Ugandans on developing a saving culture

Rehema Kahunde, a research analyst at Makerere University’s Economic Policy Research Centre (EPRC), begins her day with two guiding principles — discipline and purpose. For her, saving money isn’t just a financial goal; it’s a lifestyle anchored in intention.

“Before people can start saving, they need to understand why saving is essential,” she says. “Financial literacy and awareness play a crucial role in shaping the right mindset towards savings.”

Her approach is simple yet powerful: set clear goals and start small. “Even saving just Shs2,000 or Shs5,000 a day or week can go a long way,” she adds, emphasizing that consistency matters more than the amount.

Kahunde saves for a variety of life goals — from future business investments to emergencies — and encourages others to adopt a similar mindset.

She is also a member of a community savings group that takes a creative approach to accountability. They use a mobile money line with multiple custodians, ensuring transparency and sustained commitment.

Kahunde strongly believes in diversifying income and using digital savings tools like MoKash. “Platforms like MoKash simplify the process and help people save automatically, which is especially helpful for those who struggle with spending temptations,” she notes.

Tools of the Trade

Uganda’s financial ecosystem offers a variety of saving tools tailored to low- and middle-income earners. These include:

• Mobile money platforms such as MTN Mobile Money and Airtel Money, which allow users to save, send, and withdraw funds easily.
• Community-based models like Village Savings and Loan Associations (VSLAs) and Savings and Credit Cooperative Organizations (SACCOs), which provide peer support, small loans, and collective accountability.
• Formal banking institutions offering savings accounts with flexible terms and low minimum balances.
• NSSF SmartLife Plan, a voluntary savings scheme by the National Social Security Fund, designed for short- to medium-term goals, allowing small regular contributions that grow through investment.

For more financially savvy individuals, unit trusts, government bonds, and Treasury Bills provide investment options with varying levels of risk and return. Fixed deposit accounts, offered by banks and microfinance institutions, offer a secure way to earn interest over a fixed period, encouraging long-term saving.

Policy and Regulation Behind the System

Uganda’s growing savings infrastructure is backed by a robust regulatory framework under the Uganda Retirement Benefits Regulatory Authority Act, 2011. This legislation, enforced by the Uganda Retirement Benefits Regulatory Authority (URBRA), has introduced reforms to make retirement saving more accessible and flexible.

One such reform is the legalization of voluntary retirement benefit schemes, allowing individuals — including those in the informal sector — to save even small amounts, such as UGX 2,000 per day.

The law also ensures portability of benefits, so savings aren’t lost when individuals change jobs or schemes. Trustees can now tailor benefits to meet savers’ needs, including options like income drawdowns and medical coverage, making retirement schemes more relevant and attractive.

According to Daisy Lynda Nabakooza, Chief Manager of Supervision and Market Conduct at URBRA, the Authority actively collaborates with Parliamentarians and universities to promote early adoption of saving habits.

“We emphasize financial education and awareness as core elements of policy,” she explains.

URBRA is also embracing digitization and flexible policies to support low-income earners. As mobile phone and internet usage grow, regulatory frameworks are evolving to support digital savings products.

Nabakooza adds that government incentives and transparency around payouts can build public trust and encourage greater participation in saving. URBRA is also strengthening cybersecurity measures under the National Payment System to ensure that funds are securely managed.

The Reality and the Global View

Recent data supports these efforts. The FinScope Uganda 2023 Survey, conducted by the Bank of Uganda and partners, found that while 60% of Ugandans save, most do so irregularly, and only 14% save specifically for emergencies. Major barriers include low income, financial illiteracy, and the high cost of living. The survey also shows that women rely more on informal savings groups but often face additional economic pressures that limit their saving capacity.

Globally, the OECD Pensions Outlook 2020 underscores the importance of early and consistent personal savings, especially given today’s dynamic labor markets. The report recommends voluntary schemes and regular contributions as pathways to secure retirement.

“Saving more and saving earlier can significantly improve retirement income adequacy,” the report states.

The Bigger Picture

The benefits of saving extend far beyond the individual. At the micro level, savings offer a buffer against emergencies, support personal goals, and reduce dependence on debt. At the macro level, a higher national savings rate boosts economic growth, reduces poverty, and strengthens financial stability.

Even in tough economic conditions, experts say the government can stimulate a saving culture by investing in financial education, expanding digital infrastructure, offering tax incentives, and making savings mechanisms safe, transparent, and rewarding.

As Kahunde puts it:

“Saving is not just a financial decision — it’s a mindset. With the right tools, policies, and awareness, every Ugandan can build a future worth looking forward to.”