70% of Ugandans survive on loans to cover their low incomes – survey

At least 70 percent of Ugandans survive on family and friends and borrowing to cover up for their low incomes, a new survey shows.

According to the survey titled FinScope Uganda 2023, which was conducted by Financial Sector Deepening Uganda, seven out of every 10 Ugandans spend more than they earn.

The survey further indicates that in terms of financial resilience, 90 percent of Ugandans between 2018 and 2023 experienced an unexpected expense compared to just 34 percent in 2018, which has exposed them to economic vulnerabilities and shocks. 

The survey identified sickness as the biggest challenge to financial resilience, followed by agricultural risks and theft.

It shows that majority of Ugandans have had to deplete their savings to manage shocks, while others have had to sell an item or personal property or borrow to cope.

The findings further indicate that whereas the number of adult Ugandans relying on their children for their future has greatly reduced, more than 70 percent have no concrete long-term financial plans, which exposes majority of the elderly population to basic age-old challenges with no means of resolving them. 

The survey which was funded by Bank of Uganda, aBi Finance and the Bill & Melinda Gates Foundation, sampled 3,176 Ugandans.

According to the survey, Uganda’s adult population has grown significantly from 18.6 million in 2018 to 24.6 million.  

The survey was conducted in three stages across the country with the support of enumerators from Uganda Bureau of Statistics and Bank of Uganda. 

Therefore, the survey noted that because of the above challenges that Ugandans have encountered in the five years to 2023, very few are confident of their financial situation, with only 11 percent feeling satisfied, while 89 percent are not.

The FinScope 2023 survey sought to track overall trends in financial inclusion to provide information on how the landscape has changed since 2018, provide insights that could be utilised at policy and market levels to deepen financial inclusion and describe the financial service needs of the adult population aged from 16 years and above.