Experts Call for Digitization of Village Savings and Loan Associations to Boost Financial Inclusion

Summary:

• Stakeholders are advocating for the digitization of Village Savings and Loan Associations (VSLAs) to boost financial inclusion in Uganda. At a conference, experts discussed how technology can enhance transparency, streamline operations, and expand access to financial services.

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Stakeholders are urging the digitization of Village Savings and Loan Associations (VSLAs) and other community-based financial groups to enhance financial inclusion across the country. This plea was made during a breakfast event at Hotel Africana, which focused on insights from the second National Microfinance and Savings Groups Conference and strategies for improving financial accessibility.

The event, organized by Care International Uganda in partnership with the Ministry of Finance and the Uganda Microfinance Regulatory Authority (UMRA), explored how technology can revolutionize grassroots financial institutions, ensuring sustainability and wider financial inclusion. Attendees emphasized that the digital transition is crucial for the future of VSLAs and similar groups, as it would improve transparency, streamline operations, and expand financial services for millions.

Apollo B. Gabazira, the Country Director of Care Uganda, stressed the importance of adopting digital solutions to digitize community groups, specifically pointing to platforms like the “Ensibuuko” app for community lending. He warned that those relying on outdated methods risk becoming irrelevant in the rapidly evolving digital landscape.

Gerald Otim, CEO of Ensibuuko, echoed the need for digitization but highlighted challenges like the high cost of devices and internet access, which hinder the adoption of digital services. Moses Ogwapus, the Commissioner of the Macroeconomic Policy Department at the Ministry of Finance, acknowledged these concerns but suggested that affordable devices and targeted incentives could help address the issue.

Dr. Isaac Nkote from MUBS, while presenting the conference resolutions, emphasized the potential of technologies such as data analytics, AI, IoT, and machine learning in promoting innovation within the sector. He also advocated for the development of locally made, user-friendly apps and tools that are cost-effective for end-users.

Additionally, stakeholders urged the government to prioritize the National Payment Switch, led by the Bank of Uganda, which could lower mobile transaction costs and foster digital innovation. There was also a call for finalizing the Savings Group Policy to further strengthen the sector. Moses Ogwapus suggested that the government should focus on developing strategic initiatives instead of relying solely on policies, citing successful examples of government-led financial inclusion efforts.

The meeting concluded with a call for collaboration and shared efforts in overcoming barriers to financial inclusion, with a focus on leveraging data management, knowledge sharing, and resource mobilization to ensure the sustainability of digital financial programs.