Traditional bank branches are set to significantly reduce, thanks to the advent of digital banking that is convenient and cost-effective.
According to the recently released Bank of Uganda Annual Report 2017/2018, In 2017/18, eight bank branches were also closed in the period under review as banks embrace digital banking.
However, the Central Bank report says nine bank branches were opened, bringing the total of bank branches to 547 across the country. Uganda has 24 operating banks.
BoU attributed the closure of banks branches “to the growth in technology and the need to reduce operational costs, which saw banks to rethink operational models.”
The report also highlights growth in Mobile Money services. Uganda has seven mobile money service providers namely; MTN, Airtel, UTL, Africel, M-Cash, Ezeey Money and Micropay with a network of 166,194 agents combined.
The Central Bank expresses concerns over the cash operation of the system, with the report highlighting that while mobile money can include access to e-money, surprisingly, most mobile money services are still largely cash-based with service providers acting as intermediary cash agents.
The annual report reveals that the number of mobile money transactions increased by 21% from Shs1.11trn to Shs1.35Trn for the period under review, while the value of mobile money transactions increased by 38% from Shs52.77Trn to Shs73.08 trillion during the same period.
Additionally, the registered Mobile money users decreased slightly by 1% from 22.9M to 22.7m in 2017/18 out of which 12.8M or 56.8% were active users.
The report also highlighted that the value of mobile money transactions increased to Shs73.1trillion as at June 2018 compared to Shs52.8trillion in June 2017.