Uganda is a landlocked developing country located within the Sub-Saharan part of Africa. Low infrastructure development, high poverty levels and low levels of financial inclusion among other things, have held her back from achieving the then millennial goals and Sustainable Development Goals. However, the government heavy privatization in the late 90s has given Uganda a glimmer of hope to draw Uganda from a once failed and heavily government presence to a free market economy with an enabling environment for the private sector to thrive.
Uganda has in the recent past enjoyed relative national stability which has seen nationals settle down and concentrate on taking part in different economic activities with agriculture becoming the dominant employer for 70% of the entire population. According to the World Bank “Capacity Needs Assessment for Improving Agricultural Statistics in Uganda” report issued on July 12,2017: Agriculture is the main source of livelihood for about two thirds of Africa’s population. It accounts for 70% of employment, overwhelmingly on small farms; occupies half of all land area, and provides half of all exports and one-quarter of GDP in Uganda.
Despite the above disclosure, Uganda’s agricultural sector is still largely underdeveloped with famers still faced with limited access to information, credit and markets as a major problem.
However, with increased mobile phone usage and internet penetration, Fintech could be the solution and or the enable that Ugandans could use to bridge the existing gap. Fintech, is a combination of the words “financial technology.”(Investopedia Jun 25,2019) Uganda’s 40.5% internet penetration comes slightly above average of Africa’s 39.8% as a whole.
This is a positive indicator and a building block upon which Uganda’s Fintech sector can utilize to achieve its optimum capacity. At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones.
The Uganda National Bureau of Statistics in 2018 reported that at least 21% of Ugandans estimated to live in households spend less than what is necessary to meet their caloric requirements and to afford them a mark-up for non-food needs. Furthermore, this largely accounts for Uganda’s unbanked population. This gap can only be bridged by Fintech innovations and products or services that are enabled by the same.
With Fintech innovations, products and services like agriculture insurance, credit and other banking services and products can easily reach and penetrate this sector as major driver as the traditional financial institutions find it risky. Even though Uganda’s Fintech sector is still emerging, it has already registered tremendous volume of success and therefore earning itself continental and global attention. It even got the opportunity to host the 2019 Africa Fintech Festival between November 5th and 6th at the Kampala Serena Hotel under the theme ‘The Role of Fintechs in Africa’s Digital Economy’.
Agriculture is still by far the largest employer of Uganda’s population; directly or indirectly, therefore posing tremendous opportunities that if well exploited can drive Uganda’s economy to even attaining or surpassing target growth rate of 7%.