An average Ugandan saver now has more cash than a Kenyan of Tanzanian, this arising from the public’s better understanding of the advantages of investment vehicles known as Collective Investment Schemes (CIS) and Unit Trusts.
Such fund assets under management (AUM) in Uganda are now worth 3.5 trillion shillings or about 945.4 Million Dollars in assets under management, the second highest in East Africa. This is according to the first (July to September) quarterly report by the Capital Markets Authority (CMA).
Kenya leads with CIS Managers there holding Assets Under Management (AUM) worth 1,966.4 million Dollars), while Tanzania comes third with 875.9 million dollars. In Uganda over the three months, these assets grew by 10.5 percent from 3.18 Trillion, with this surge in AUM attributed mainly to a greater public understanding of the advantages offered by CIS vehicles.
Notably, Ugandans are keeping more money in CIS accounts than that kept with their counterparts in Kenya and Tanzania. An average account in Uganda had 9,095 dollars (33.4 Million Uganda Shillings) compared to 1,639 (6 million Shillings) in Kenya and 4,439 (16.3 Million) in Tanzania.
Josephine Okui Ossiya, the Chief Executive Officer at Capital Markets Authority, says more and more of the Ugandans are recognizing the benefits of investing through pooled savings vehicles.
“The regulatory framework has instilled confidence among investors, who are assured of the protection afforded by investing in regulated financial products, such as CIS,’’ she said.
She says the market also took advantage of the amendment of the National Social Security Fund (NSSF) Act to allow savers to access part of their savings at age 45.
With this, CMA says a good number of people got their savings under the midterm access out and invested a part of them into the CIS. The growth is also attributed to investor confidence “stemming from the safeguards provided by regulated financial products,” according to Okui.
Over the year, the assets under management jumped 54.1 percent from 2.3 Trillion in September 2023.
There is also a marked growth in the number of people investing through the CIS, from 92,165 at the end of June 2024 to 103,950 in September 2024, an increase of 12.8 percent.
According to the Financial Services and Markets Act 2000, a collective investment scheme is any arrangement concerning property of any description, including money, the purpose or effect of which is to enable persons taking part in the arrangements to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of such profits or income.
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