IFC inks Shs7bn deal with Agent Banking Company to boost access to financial services in Uganda

The Agent Banking Company, that gathers banks and financial institutions on the same platform, and the International Finance Corporation (IFC) signed a $1.9 million agreement to develop a network of banking agents in rural zones within 30 months and boost access to financial services.

The partnership between Agent Banking Company and IFC was officially launched recently at the Kampala Serena Hotel.

In Uganda, 41% of the adult population living in rural zones has no access to financial services, the IFC indicates.

According to Richard Yego, the ABC Chief Executive Officer said for the next two and a half years, IFC funds will be used to roll out agent banking network infrastructure and accelerate financial expansion services to improve financial inclusion in rural areas.

“With the shared agent banking platform that connects banks, we believe we will drive financial inclusion by increasing banking services outreach to unbanked, underserved and banked population,” Yego added.

He said although there  are seven million bank accounts currently, they are optimistic that within two years, the number of bank accounts will have increased by two million.

He added that although access to formal banking has increased substantially in Uganda in recent years as mobile money has become more wide spread,41 percent of the adult population still lack access to reliable and affordable means to transfer, save and borrow funds especially in rural areas.

The IFC Regional Director for Eastern Africa Jumoke Jagun-Dokunmu said that  people living in low income countries  in Uganda and Africa at large need broad range of financial in order  to take advantage of economic opportunities, hence agent banking has been proven to be a sustainable and affordable strategy to expand financial inclusion beyond higher income customers concentrated in cities.

IFC is the largest global development institution focused on the private sector in emerging markets.

ABC is joint venture undertaking between Uganda bankers association and eclectics international to build and operate a shared agent banking platform that enables connectivity among the financial institutions.