Overview:
The annual value of mobile money hit 253.7 trillion shillings in 2024. Read how this growth challenges traditional banking and is driving new regulatory action by the Bank of Uganda.
KAMPALA, Uganda — The sheer transaction volume of Uganda’s financial technology sector now dwarfs the asset base of its commercial banks, signaling a profound and rapid transformation in the country’s financial ecosystem, according to data from the Bank of Uganda.
The annual value of mobile money transactions surged to 253.7 trillion shillings in the year ending June 2024. This figure is roughly five times the total 53 trillion shillings held in assets by the entire commercial banking sector over the same period. This dramatic contrast was highlighted in a recent analysis, noting that the growth of fintech is “reshaping how people save, borrow and make payments.”
This expansion reflects a global and continental trend. The worldwide fintech market is projected to grow annually by 15 percent to 25 percent, a rate well ahead of traditional finance. In Africa, the dominance is clear, with mobile money services handling an estimated $1.1 trillion in annual transactions.
Complementary, Not Competitive
Despite the disparity in transaction size, Bank of Uganda officials emphasize that the relationship between the two sectors is complementary rather than competitive.
“Payment service providers rely on the banking system for settlement, custody of funds, and other core infrastructures, while banks benefit from the increased transaction volumes, deeper customer engagement, and expanded digital rails,” said Kenneth Egesa, the Bank of Uganda director of communication.
The emerging ecosystem is one where fintechs, specializing in high-volume, low-value transactions, provide the speed and accessibility at the “front end.” Banks, whose assets have been growing at a slower but steady 8 percent to 11 percent annually, supply the balance sheet strength and regulatory backbone for large corporate lending and trade finance at the “back end.”
Fintechs gain a structural advantage by using mobile apps and Unstructured Supplementary Service Data codes to reach millions of users, particularly those who are geographically distant from bank branches or lack formal documentation.
Regulation and Stability
Regulation is adapting to the scale of this digital finance boom. The National Payment Systems Act and its associated licensing framework have brought the 54 licensed payment service providers, electronic money issuers and switching operators under the central bank’s supervision. This formalization is aimed at strengthening consumer protection and ensuring the stability of the rapidly growing sector.
Vincent Tumwijukye, chairman of the Financial Technologies Service Providers Association, agreed that the partnership is vital, noting that fintechs have “removed bottlenecks that once clogged the flow of finance.”