PostBank Uganda

Michael Atingi-Ego, deputy governor Bank of Uganda, with other officials at the launch of PostBank's Wendi mobile platform © PostBank Uganda Remarks by Michael Atingi-Ego, Deputy Governor of the Bank of Uganda, at the launch of PostBank Uganda's Wendi mobile wallet in Kampala on 1 November 2023 Good morning to you all. I am grateful to you, Mr Kakeeto (PostBank's managing director), for inviting me to be the chief guest and speak at this milestone launch of PostBank's mobile wallet, Wendi. Kudos to your team for developing and deploying the Wendi wallet launched today. Bill Gates, co-founder of Microsoft, said, “We believe that the ability to save and transact should be universal.” Speaking for Bank of Uganda (BoU), I affirm that this is a vision we believe in, share and are working to realise in Uganda by expanding access to financial services and opportunities for people, especially those at the bottom of the economic pyramid. PostBank and all the stakeholders here today also share this important vision. We all believe in financial inclusion and ensuring that everyone can save money and conduct financial transactions, regardless of their economic status. This is why we are involved in various initiatives to improve access to financial services for Ugandans. And we have our work cut out for us. Why is that? Well, because over 70 per cent of Uganda's population live in rural areas, engaged in subsistence farming. Most of our people languish in the peasantry, outside the money economy. Our people at the bottom of the pyramid face complex financial challenges, often making difficult choices about necessities such as health care and education. Limited assets and lack of access to traditional banking services are the main reasons for challenges, such as foregoing medical care or withdrawing children from school for lack of funds. Adding insult to injury, financial exclusion makes it difficult for the unbanked poor to effectively use the assets they do have. The financially excluded often resort to inefficient financial practices, such as hiding cash at home or buying commodities that may depreciate over time. For them, sending money to others or borrowing money typically involves exorbitant costs. Fortunately, mobile banking — enabled by mobile phones — solves these problems for the rural and unbanked poor. They can use phones to store money digitally and make payments. With innovation, mobile money providers are offering a wider range of financial services, including savings accounts, loans, and insurance through the phone. Digital banking is cost-effective for serving the poor because the marginal cost of processing digital transactions is low. And the increasing mobile phone penetration across the population creates a scalable volume of transactions, allowing providers to profit from serving the poor. Nevertheless, realising our shared vision requires addressing challenges such as unequal access to mobile phones and ensuring enough locations and options for converting cash into digital money and vice versa. In this regard, I must say that the BoU strongly discourages “cashing out” of digital financial channels in order to build the critical mass needed to drive further innovation for specialised savings and credit plans tailored to needs such as agriculture, health and education, and to promote a cashless economy. To reiterate, mobile banking, enabled by digital technology and mobile phones, is a beacon of hope for the poor, giving them greater control over their assets and financial lives. It is critical to promoting financial inclusion, which is one of the ways that the BoU seeks to support Uganda's socio-economic transformation in line with the national Vision 2040, “A transformed Ugandan society from a peasant to a modern and prosperous country.” Similarly, the Parish Development Model (PDM), launched by the government in 2022, aims to accelerate socio-economic transformation at the parish level, the lowest administrative unit in the country. The model aims to move 39 per cent of Ugandan households, or about 3.5 million households, from subsistence farming into the money economy. It provides access to finance, markets, and other resources to support income-generating activities, improve food security, and promote access to essential services such as education and health care. Talk about believing that the ability to save and transact should be universal! The government's implementation of this noble cause has faced some challenges that have slowed its momentum and highlighted the inefficiencies faced by the poor in accessing financial services. Beneficiaries have struggled to physically collect funds, partly because for the unbanked, moving money can mean taking a day off work, travelling long distances or trusting someone else to do it for them. The implementation of PDM has also faced challenges in tracking the disbursement of funds and ensuring accountability. In addition, access to financial institutions is limited in rural areas, where people often borrow or save in small amounts, making the construction and maintenance of bank branches impractical. In line with the ancient proverb, “cometh the hour, cometh the man,” Mr Kakeeto, who has championed a digitalisation strategy at PostBank, and his team, saw an opportunity in the difficulties that beset implementing PDM. PostBank seized the moment and rose to meet and overcome these challenges. They developed a mobile wallet — Wendi — to address these issues and promote financial inclusion in unbanked rural communities. I understand that Wendi offers a growing range of digital financial services, including savings, transfers, deposits and withdrawals. Users can register themselves using their national IDs, eliminating cumbersome paperwork, and can access services immediately upon enrolment. It facilitates a wide range of mobile transactions such as bill payments, Sacco collections and peer-to-peer transfers. Wendi allows users to receive funds directly to their mobile phones, eliminating the need for traditional bank accounts, reducing costly manual disbursements and providing transaction traceability. What is more, PostBank has partnered with MTN and Airtel to integrate Wendi with the leading mobile money platforms, enabling seamless and convenient transactions. Wendi is also plugged into the agent banking platform, with interconnectivity between partner banks. Additionally, Wendi works with smartphones and feature phones via USSD (a protocol used to send text messages between a mobile phone and a service provider's computer), ensuring that anyone with a mobile phone can access this transformative platform. Wendi deserves to be a household name nationwide for solving the PDM bottlenecks, if not for nothing else. Fortunately, it has seen strong uptake in its first two months of deployment for PDM purposes, with over 4,000 downloads, 330,447 customer registrations via USSD and apps, 373 bank agent signups, and Shs691bn in transactions. Today's launch takes Wendi beyond the PDM to all other eligible applications and users. Ladies and gentlemen, you may be aware that digital wallets like Wendi allow users to store their payment information on their mobile devices and transact without the need for cash or physical cards. Therefore, the widespread adoption of Wendi in a country with low levels of digital financial literacy requires empowering customers and securing their trust. This challenges PostBank to ensure that Wendi is effective, reliable (or always on), and user-friendly. To live up to its name, Wendi must go beyond “I'm here” to mean “I'm not going anywhere.” Achieving this is no mean feat, and calls for PostBank to ensure that Wendi is secure enough to protect users' financial information from theft and fraud. It should be easy to use and navigate, with a simple interface that allows all types of users to access their payment information and transact with ease. Wendi should be compatible with different devices and operating systems, working seamlessly across multiple platforms on smartphones, feature phones, tablets, laptops, and desktops. It should be reliable and always available when users need it, with a high uptime rate and minimal downtime to ensure users can transact whenever they want. Wendi must be accessible to everyone, regardless of location or financial status, possibly in multiple languages. It should provide affordable financial services with low transaction fees and charges. Wendi should mean Wendi — reliable, secure and convenient, through thick and thin. In this way, Wendi will become the gold standard for delivering government payments and services to rural communities, facilitating access to financial services for the underserved, and promoting digital financial services for government-to-person payments. We urge you, Mr Kakeeto and your team, to prioritise reliability, mitigate IT and cybersecurity risks, and empower your customers through education and awareness on financial wellbeing and security. For our part, BoU is continuously taking steps to improve cybersecurity in the banking sector. These steps include issuing cybersecurity guidelines for banks and other financial institutions, conducting regular cybersecurity audits of supervised financial institutions, and working with government agencies and other stakeholders to develop and implement a national cybersecurity strategy. Given the increasing sophistication and frequency of cyber-attacks, such as phishing attacks, malware infections and social engineering scams, banks must continue to invest in security and remain vigilant. Further, BoU has taken several initiatives to promote financial inclusion, including: Providing a robust regulatory framework for innovative payment solutions. As at 31 October 2023, we had licensed 27 payment service providers and payment system operators, including two banks as e-money issuers, Stanbic and PostBank. Issuing guidelines: BoU has issued guidelines on mobile money, agency banking, and financial literacy. These guidelines help to promote financial inclusion by setting standards for financial institutions and other stakeholders to follow. Conducting research and surveys: BoU conducts research and surveys to assess the state of financial inclusion in Uganda. This information is used to develop and implement policies and programmes to promote financial inclusion. Working with financial institutions and other stakeholders: BoU works with financial institutions and other stakeholders to develop and implement financial inclusion initiatives. For example, BoU has worked with banks to expand agent banking networks. Raising awareness of the importance of financial inclusion: BoU raises awareness of the importance of financial inclusion through financial literacy programmes and campaigns. These programmes and campaigns educate the public about financial services and how to use them safely and effectively. Developing the National Payments Switch to promote efficiency and interoperability, improve liquidity management, standardise AML/CFT capabilities, improve cyber surveillance, and lower transaction costs for retail digital payments. The initiatives by BoU and stakeholders have promoted financial inclusion, increasing the number of Ugandans who use formal financial services. For example, adults with mobile money accounts increased from 46 per cent in 2016 to 71 per cent in 2022. Electronic money transactions have surged by 22.6 per cent, underscoring the changing financial landscape. Our collective efforts have significantly improved formal financial inclusion, now estimated at 66 per cent, according to the World Bank Global Findex Report 2021. This is reflected in the growing number of bank accounts, mobile wallets, and digital channels. BoU is committed to continuing to work to promote financial inclusion so that everyone has access to the financial services they need to improve their lives. We commend PostBank for its pioneering spirit and commitment to develop a ground-breaking mobile wallet solution within three months of receiving its e-money issuer licence. We congratulate you, Mr Kakeeto, the PostBank team and your strategic partners for this remarkable innovation. We hope that Wendi will play a pivotal role in transforming the lives and livelihoods of Ugandans by providing accessible, affordable, and sustainable digital financial solutions. Ladies and gentlemen, join us on this transformative journey and champion the reliability, security, and convenience of digital financial services. Together, we can bring financial services to every corner of our country. Embrace Wendi, champion financial inclusion, and make the ability to save and transact universal. I am honoured to be part of this official launch and unveiling of the Wendi wallet. Thank you all for listening. God bless you all!

PostBank Uganda

PostBank’s mobile wallet worthy addition to financial inclusion arsenal, says BoU deputy governor