This new publication captures the key takeaways from a series of roundtable discussions organized by UNCDF and the Bank of Uganda between April 2023 and April 2024. These discussions focused on the expansion of digital financial services (DFS) beyond payments, exploring the potential for DFS to facilitate access to credit, savings, investment, and insurance. The sessions brought together stakeholders from across the financial ecosystem to identify challenges and chart a path forward for deeper financial inclusion.

WHY EXPANDING DFS MATTERS

Uganda has made considerable progress in financial inclusion, driven by mobile money and agent banking. However, significant barriers remain, particularly for rural populations, women, youth, and marginalized groups. Financial activities in informal sectors limits access to formal financial products and services

Expanding DFS is essential to bridging this gap. The National Financial Inclusion Strategy (NFIS II) aims to have 75% of Ugandans accessing formal financial services by 2028, but this goal cannot be achieved through payments alone. To drive real impact, DFS must extend into areas such as credit, savings, investment, and insurance—areas critical for economic empowerment and long-term financial stability.

The roundtable discussions highlighted several shared challenges across these areas, as detailed below. Low financial literacy, distrust of financial institutions and digital data, high costs, and regulatory barriers were identified as the most pressing issues hindering the growth of DFS and financial inclusion.

The roundtable discussions highlighted several shared challenges across these areas, as detailed below. Low financial literacy, distrust of financial institutions and digital data, high costs, and regulatory barriers were identified as the most pressing issues hindering the growth of DFS and financial inclusion.

INNOVATIVE SOLUTIONS

Throughout the discussions, fintechs were recognized as a key driver of innovation, offering the potential to address these barriers through tailored digital platforms. These platforms can utilize alternative data to build more accurate risk assessments, improve trust, and provide more appropriate products for underserved populations. However, for these solutions to be effective, they must be human-centric, designed around the needs of the customer, and focused on building trust and usability.

Profiles of some fintech emerging trends available on the market and discussed during the roundtables are featured in this document, showcasing how fintechs are helping to close the gaps in financial access, particularly in underserved markets. These innovations point to the path forward: coordinated efforts that integrate data to deliver financial services that go beyond payments and enable Ugandans to actively engage in the financial system— whether through saving, borrowing, investing, or insuring against risks.

A WAY FORWARD

Expanding DFS beyond payments is critical for achieving a more inclusive and thriving financial future in Uganda. The insights from these roundtable discussions provide a roadmap for addressing the challenges identified and harnessing the potential of digital finance to reach underserved populations. Continued collaboration among stakeholders across the financial sector will be essential to transforming these insights into action and ensuring that financial services reach the people that need them the most.