Mobile Money Account Holders in Uganda Will Now Start Earning Interest, Says Bank of Uganda

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The Mobile Money services in Uganda have now been completely detached from the Uganda Communications Commission and are now under the Central Bank of Uganda (BoU).

This follows the new laws, the National Payment Systems Act, 2020 and the Bank of Uganda regulatory sandbox, which require the separation of mobile money and telecommunications services into different companies for regulatory purposes.

The change in regulation now means mobile money services will now be required to operate under the country’s financial services regulations that demand account holders to earn interest for holding money in the accounts.

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Under the previous system, saving money on mobile platforms was free and attracted no interest. However, the new regulations now demand companies to offer interest with the ability to save up to the maximum amount allowed for cash transfers.

At the same, there will also be a minimum savings of UGS 500 with the pricing of he products, including loans, savings, and withdrawals operating under the business laws and policies of the country which operates a liberalized market economy.

Speaking about the new regulations, Charity Mugumya, Director of Communications, Bank of Uganda, said:

“Uganda runs a liberalized interest rate regime in which lending rates are market determined.

Given the different cost structures of the lenders, varied risk profiles of the borrowers, and the varying collateral arrangements, the interest rates cannot be expected to be the same across the different players in the financial sector.

Going forward, holders of “mobile money” accounts will earn interest on their accounts.”

                                 – Director of Communications, Bank of Uganda (BoU)

Mobile money transactions In Uganda reached $8.2 billion in Q4, 2020 with a total mobile money subscriber base of 24 million users, according to the latest statistics.

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RECOMMENDED READING: The Financial Intelligence Authority of Uganda Seeks Cryptocurrency Regulatory Framework from the Government

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