FINSCOPE UGANDA 2023

FINDINGS
11 APRIL 2024
Kampala
FINSCOPE UGANDA 2023
Background and
Introduction
ACKNOWLEDGEMENTS
Steering Committee members
• This research was made possible with Steering committee members:
funding from Bank of Uganda (BoU),
aBi Finance Ltd and the Bill and 1. BoU
Melinda Gates Foundation (BMGF), 2. UBOS
through Financial Sector Deepening 3. Ministry of Finance, Planning and Economic Development
Uganda (FSDU) and a partnership 4. Uganda Bankers Association
with the FinScope Secretariat - BoU; 5. Uganda Retirement Benefits Regulatory Authority
the FinScope steering committee and 6. Uganda Cooperative Savings and Credit Union Limited
Uganda Bureau of Statistics (UBOS). 7. Uganda Insurers Association
• FinMark Trust provided technical 8. Uganda Microfinance Regulatory Authority
assistance and implemented analysis 9. Capital Markets Authority of Uganda
and report writing. 10. Insurance Regulatory Authority of Uganda
11. Association of Microfinance Institutions of Uganda
12. Uganda Cooperative Alliance
13. National Payment Services Providers Association (NPSPA)
14. Development Partners (FSD Uganda, aBi Finance Ltd)
FINSCOPE UGANDA 2023 OBJECTIVES

FinScope is a demand-side study of access, uptake, usage and perceptions of financial services.
The 2023 survey has three main objectives:
• To track overall trends in financial inclusion to provide information on how the landscape of financial
inclusion has changed since 2018, including benchmarking these trends with countries within the region
• To provide insights that could be utilized both at policy and market levels to further deepen financial
inclusion
• To describe the financial service needs of the adult population (i.e. individuals 16 years or older) in Uganda.
Financial sector stakeholders will use the findings to support the development and delivery of financial services
to lower-income households and to assist in the development of an enabling environment within which these
services can be delivered.
The study will also be used to track current NFIS targets and guide target-setting for the future.
FINSCOPE SAMPLING

A three-stage stratified sampling approach was used • The sampling approach ensures that results from
to arrive at a representative sample of individuals the survey can be disaggregated by region and
aged 16 years and older: location setting (i.e. rural or urban) as well as by
• First stage is geographic representation. 320 demographic attributes such as sex.
enumeration areas (EAs) selected by UBoS to
ensure national, regional and urban-rural
representativeness. Targeted EAs: 320 EAs
• Second stage is household representation within Achieved EAs: 319 EAs
each EA. 10 households selected at random from a Targeted Sample: 3 200 Respondents
comprehensive list of households in the EA. BOU Achieved Sample: 3 176 Respondents (99%
enumerators conducted the listing. response rate); the FinScope 2023 survey data
• Third stage of sampling is individual represented an adult population of 24.6
representation. One adult (i.e. an individual 16 years
million
or older) was selected at random from each of the
selected households to be interviewed.
FINSCOPE UGANDA 2023 FINDINGS
Demographic Background
ADULT POPULATION CHANGES
Increase in Urbanisation

• The adult population has grown significantly

since 2018, from 18.6 million to 24.6 million.

• Based on the data weighting, the proportion

of men and adults living in urban areas has
increased since 2018.

30% 24% 52% 54%

Urban adult population % Female adult poplation %

2023 2018
AGE DISTRIBUTION CHANGES
The adult population is becoming more youthful

• This big shift in the age profile is

important to note because
compared with 2018, the 2023
adult population will show very 31%
different earnings and financial
behaviours and attitudes. 23%
19% 20% 20% 21%

• This has important implications 14%

for financial inclusion. 11%
9% 9%
7%
5% 4% 6%

16-17 18-24 25-30 31-40 41-50 51-60 60+

2023 2018
EDUCATIONAL ATTAINMENT
Attainment is improving, with clear gender gaps

61% of adults have not achieved secondary levels of education.

This is an improvement from 2018’s level where 70% had not achieved secondary education.
There is a gender gap: 68% of women have not progressed beyond primary school versus 57% of men.

2% 3%
Tertiary Tertiary
1% 2%
7% 9%
Specialized training Specialized training
5% 6%
30% 35%
Secondary levels Secondary levels
24% 25%
46% 42%
Primary level Primary level
55% 50%
14% 11%
Never went to school Never went to school
15% 18%

2023 2018 Male (%) Female (%)

FinScope Uganda 2023 findings
Income
MAIN SOURCE OF INCOME
Trading dominates but wage/salaries and services gaining prominence

• It looks like there 44%

has been an Money from trading/selling anything
54%
upward shift in 10%
the proportion of Piece work/casual labour
15%
the population 18%
earning money Dependents
20%
from salaries and Money from providing service, e.g. transport, 13%
wages, as well as hairdressing, processing, hospitality 2%
providing
12%
services, and Salaries/wages
5%
away from selling
1%
goods and casual Rental or interest income
1%
labour.
1%
Pension or government social grant
1%

2023 2018
FinScope Uganda 2023 findings
Green finance
GREEN FINANCE
Green growth concepts used

• Green Growth: An agenda/model/path/approach for fostering economic growth and development, while
ensuring we do no harm.
• Climate Change Adaptation: Investments or activities that reduce the vulnerability of human or natural
systems to the impacts of climate change.
• Climate Change Mitigation: Investments or activities that reduce or limit greenhouse gas (GHG) emissions or
enhance GHG capture.
• Biodiversity Conservation: Investments or activities that protect life for the benefit of present and future
generations.
• Green Finance: Any structured financial activity (product or service) created to ensure a better environmental
outcome – e.g. minimize the impact on the climate.
• Can be;
• 1. Loans,
• 2. Equity,
• 3. Grants or
• a combination of the 3.
GREEN GROWTH AWARENESS IS A CHALLENGE
Limited awareness and incomes hinder green growth
Only 28% of Ugandan adults are aware of “green growth”, and fewer are aware of climate change adaptation,
mitigation, and biodiversity conservation. Only 11% are aware of green finance. Ugandans cite poverty as the
main obstacle and claim resources and awareness would bolster green growth.
Awareness of key concepts Main factors that help green growth Main factors hindering green growth

Green growth 28% Resource High poverty

41% 53%
mobilisation levels
Climate change
25%
adaptation
Lack of awarenss
Climate change Mass awareness /
22% 32% of environmental 18%
mitigation capacity building
protection
Biodiversity
18%
conservation
Don't know 19% Don't know 18%
Green finance 11%
FARMERS TEND TO PRACTICE BUT DO NOT FINANCE GREEN ACTIVITIES
Traditional practices rather than infrastructure / energy investments

41%
Improved varieties for seeds, & livestock
8%

38%
Post-harvest handling practices
3%

32%
Climate Prevent/treat pathogens & diseases
5%
Adaptation
20%
Warehouse and storage facilities Measures practiced (%)
2%
Borrowed to finance (%)
14%
Water installation for crops / livestock
3%

12%
Structures/equipment for livestock
2%
FARMERS TEND TO PRACTICE BUT DO NOT FINANCE GREEN ACTIVITIES
Traditional practices rather than infrastructure / energy investments

78%
Mixed crops farming
9%

59%
Green manure, e.g. dried grass
6%
Climate 38%
Change Vegetable mulches
4%
Mitigation 11%
Clean energy e.g. solar, hydro electric Measures practiced (%)
1%
Borrowed to finance (%)
7%
Agri bio-waste for organic fertilizer
1%

5%
Soil and biomass protection
1%
FARMERS TEND TO PRACTICE BUT DO NOT FINANCE GREEN ACTIVITIES
Traditional practices rather than infrastructure / energy investments

57%
Afforestation / planting new trees
8%

23%
Biodiversity Forestry / species conservation practices
3%
Conservation
Measures practiced (%)
21%
Forestry rehabilitation and restoration Borrowed to finance (%)
3%

10%
Wildlife conservation activities
2%
GREEN FINANCE
Farmer Use of Green Finance

22%

• While 38% of Ugandan adults are involved in

agriculture/agribusiness
• Only 22% of them have borrowed for some
form of green finance.
78%

Use green finance Do not use green finance

GREEN FINANCE
Green Financing Reasons

Did not apply

79%
Lack of knowledge by financial
• Collateral, condition and services provider 20%
capacity are the main
reasons for receiving 32%
Collateral
finance. 7%
31%
• Most farmers without Condition
10%
green finance did not
apply. There are also 29%
Capacity
knowledge gaps amongst 7%
providers. Character
18%
2% Reasons for receiving (%)
12%
Capital Reasons for not receiving (%)
6%
FinScope Uganda 2023 findings
Connectivity and eligibility
EXPANDING DIGITAL CONNECTIVITY
But big area and gender gaps

Mobile phone ownership is highest amongst 25–50-year-olds, and internet access is highest amongst 18–40-
year-olds.

Mobile phone 72% Mobile phone 84% Mobile phone 80%

ownership 52% ownership 67% ownership 64%

26% 48% 34%

Internet access Internet access Internet access
10% 17% 18%

2023 2018 Urban Rural Male Female

MEETING ELIGIBILITY REQUIREMENTS
Proof of residence is a challenge for many Ugandans

National ID card in own name 76%

Proof of Residence 26%

KYC (Both) 22%

FinScope Uganda 2023 findings
Financial health
FINANCIAL HEALTH
Defining financial health

• Financial health or well-being is the extent to which a person or family can smoothly
manage their current financial obligations and have confidence in their financial future.
• 4 elements are covered in measuring financial health
• Day to day (financial management): Smooth short-term finances to meet financial
obligations and consumption need
• Resilience: Capacity to absorb and recover from financial shocks
• Goals (planning for the future): Ability to reach future goals
• Confidence: Feeling secure and in control of finances

As defined by the United Nations Secretary General’s Special Advocate for Inclusive Finance for
Development Financial Health Working Group
FINANCIAL MANAGEMENT
More Ugandans are keeping track of the money

Keep track of money received and spent %

• The proportion of Ugandans who keep track 57%

of the money they receive and spend has 47%
increased by 10 per cent from the previous
FinScope (2018)

2023 2018
FINANCIAL MANAGEMENT
Most Ugandans are not managing their budgets well

Main coping mechanisms for running out of money

• Seven out of every 10
20%
Ugandans were operating a Ask family/friends to assist
personal budget deficit 16%
(needing more money than 20%
Use savings
they are earning to cover 14%
their personal budget)
16%
Borrow money
11%

• More Ugandans are relying Cut down on regular expenses

21%
on their family and friends, 27%
personal savings and 12%
borrowing to manage their Work more /do more work
23%
budget deficits than was the
case in 2018 8%
Sold an item 2023
2018
FINANCIAL RESILIENCE
Most Ugandans are now more vulnerable to economic & social Shocks
than in the past
Unexpected expenses %

94%
• Nine out of every 10 Ugandans were
faced by an unexpected event.
• This number more than tripled from
2023 than was the case in 2018.
• Indicating that more Ugandans are 37%
now more vulnerable to economic
and social shocks

2023 2018
FINANCIAL RESILIENCE
Vulnerability to Economic & Social Shocks
Sickness, agricultural risks and theft were the predominant shocks Ugandans face. More Ugandans are relying
on their personal savings than borrowing to manage these shocks than was the case in 2018.
Most negative financial events in past 12 Main coping mechanisms
months
38%
Illness of a family member 28% Use savings
16%
Crop failure, livestock death, 30%
22% Cut back spending
drought

20% 2023
Theft 21% Sold an item
17% 2018

Income loss due to trade 16%

5% Borrow
product price drop 42%
13%
Death of a family member 4% Earned extra money
PLANNING FOR THE FUTURE
Most Ugandans do not have concrete long-term financial plans
Set long-term goals and strive to achieve them

Completely 10%

• More than 7 out of Very well 14%

every 10 Ugandans
have no concrete
long-term financial Somewhat 33%
plans
Very little 27%

Not at all 15%

PLANNING FOR THE FUTURE
The number of Ugandans relying on their children for their future has
greatly reduced than was the case in 2018
The main drivers for lack of pension savings is low levels of awareness and unemployment

Strategies to be financially secure in the future Reason for not having a pension
(% of adults younger than 60 years)

32% Don't know what pension

Don’t have a strategy 36%
20% schemes are

Money from farming 22% Do not have a job 31%

activities 25%
15% Never thought about it 14%
Savings
13%
13% Have other was of getting
Own business 7%
10% money when old
2023
6% Don't know how to get it 7%
Children will take care 2018
20%
FINANCIAL CONFIDENCE
Very few Ugandans are confident in their financial situation
Only 11% are satisfied with their financial situation.
60% of adult Ugandans are not confident in their financial plans for old age.
Am satisfied with my present financial situation Confident done a good job of making financial
plans for old age

11% 7%

33%

60%

89%

Yes No Very confident Somewhat confident Not confident

FinScope Uganda 2023 findings
Financial aspirations,
uptake and usage
DIGITAL TRANSFER SERVICES
There has been a slight increase in the use of digital transfer services

All adults 2023 64% 36%

• The proportion of
Ugandans using
digital transfers has All adults 2018 57% 43%
slightly increased
since 2018 from 57 Male 67% 33%
percent to 64 percent.
• Men still Female 61% 39%
dominate women in
the use of digital Rural 60% 40%
transfers as is the case
with urban and rural
areas. Urban 73% 27%

Use digital transfer services Do not use digital transfer services

SAVING AND INVESTING INTENTIONS
More Ugandans are saving mainly for regular expenses

Savings % Main purpose of saving

• More Ugandans are saving Help with regular expenses

39%
(formally and informally) 37%
now than in 2018. An 60% Cope with unexpected 14%
increase of 6 percent. 54% expenses 26%
Acquire/build/renovate 14%
• Most Ugandans still save to house 7%
cover living expenses but 12%
Business purposes
there is a shift towards 9%
productive investments like 12%
real estate development, Agriculture
8%
business and agriculture. 2023 2018 3% 2023
Buy household goods
1% 2018
SAVING AND INVESTING INTENTIONS
Land/Farming and Business are the most predominant investment
aspirations
Asset building aspirations
• Purchase of land,
farming and running Land/farm
35%
33%
a business continue to
be the predominant 17%
Business
14%
investment
13%
aspirations for House
19%
Ugandans 4%
Car/other vehicle
11%
• There has been a 4%
Education
slight decline in 6%
Ugandans who aspire 2%
Farming equipment
to build a house as an 3%
2023
investment aspiration Have not thought about it yet
22%
5% 2018
SAVING AND INVESTING INTENTIONS
Farming and Financial Savings are the predominant sources of finance
for investment
How aspirations are financed

23%
Nothing/haven’t thought about it
39%
35%
Farm to make extra money
31%
• Farming and financial Saving/putting money aside
17%
savings continue to be the 14%
predominant sources of Run business for extra money
10%
10%
financing for investment
8%
Started extra job / multiple jobs
6%
Bought an asset to sell later when I need 3%
money 3%
2%
Rental property
10%
SAVINGS MECHANISMS
Informal savings mechanisms still dominate

• SACCOs and Mobile Money have Savings mechanisms (% of savers)

registered the highest increases in
42%
adoption since 2018 with the proportion Mobile phone
23%
of Ugandans utilizing them more than 15%
doubling. SACCO
5%
Bank, MDI or credit institution 15%
• The proportion of Ugandans keeping 11%
their money at home has also more Pension fund/ Retirement schemes 2%
than doubled which could be a sign of
lack of confidence in any form of Savings group / VSLA 47%
43%
financial service provider whether
ROSCA /merry-go-round 9%
formal or informal. 9%
Another community group / Church 9%
• Despite the increase in overall saving 2%
among Ugandans, little is done digitally. 44%
Keep cash at home for longer-term
Only 2 out of every 10 Ugandans claim 27%
to have ever saved electronically. 13% 2023
Give to family / friend to keep safe
8% 2018
Credit
More Ugandans are moving away from credit
Main reason for borrowing
Past 12 months borrowing
• More (% borrowed and still repaying)
Ugandans
15% Help with regular expenses 44%
are moving Borrowed in past 12 months
away from and still owe money
23% Business purposes 22%
credit
26% Cope with unexpected expenses 12%
• Those who Borrowed but repaid
are taking 28% Agriculture 11%
credit are
mainly 59% Buy a vehicle 6%
borrowing to Did not borrow or repay
money
cover regular 49% Acquire / build / renovate house 3%
expenses.
2023 2018
Credit
Informal and social borrowing for consumption smoothing purposes

Lenders used by borrowers (% of borrowing and still repaying)

SACCO 16%
• VSLAs and family
and friends continue Mobile money service provider 16%
to be the
predominant sources Bank 8%
of credit
Credit institution 4%

• SACCOs and mobile MDI 3%

money continue to
be the predominant MFI 1%
formal sources of Savings group / VSLA 56%
credit
Family/friends 50%
INSURANCE UPTAKE
There has been an increase in the uptake of formal insurance

• There has been an increase in the

uptake of formal insurance since
2018 from 1% to 2%.
14%

• Though based on administrative 10%

data from the Insurance regulator
submitted by the insurance
industry, overall uptake of formal
insurance (incl. beneficiaries) is
estimated at 5%. 2%
1%

• However, there has been a slight Formal insurance in own name % Belong to burial society %
drop in informal insurance which
mainly comprises of burial societies. 2023 2018
FinScope Uganda 2023 findings
Financial inclusion

FinScope Uganda 2023 launch findings

FINANCIAL INCLUSION
Financial classification

Ugandan population aged 16 or older

Financially included = has/uses financial products and/or Financially excluded = does not have/use
services – formal and/or informal. financial products and/or services – whether
formal and/or informal.

Formally served
= has/uses financial products and/or services provided by Informally served
a formal financial institution (bank and/or non-bank). A = has/uses financial products and/or services that are not
formal financial institution is regulated by law and regulated and operate outside a recognised legal
authorised institutions. framework (e.g. savings group, funerary association)

Banked Served by other formal financial institutions

= has/uses financial products and/or services = has/uses financial products and/or services provided by
provided by a bank, regulated by authorised regulated non-banking financial product providers, (e.g.
institutions. microfinance, mobile money, etc.)
FINANCIAL INCLUSION
The Financial Access Strand Explained

Commercial banks
Banked Credit institutions
MDIs
FORMAL

Insurance
SACCOs
MFIs/micro lenders
Non-bank formal Remittance companies
Mobile Money
Pension
Capital Market Investments (i.e. bonds)
Savings group/VLSAs, ROSCAs
Informal only (external) Burial society
Informal money lenders
Friends/family
Excluded Save at home/in kind
Shops/supply chain credit
FINANCIAL INCLUSION
Financial inclusion has increased, driven by formal inclusion
Formal inclusion is higher amongst men and urban dwellers. Informal inclusion is higher amongst women and
rural dwellers.

Overall Financial Inclusion Formally Included Informally included

All adults 2023 81% 19% All adults 2023 68% All adults 2023 52%

All adults 2018 77% 23% All adults 2018 58% All adults 2018 50%

Male 84% 16% Male 75% Male 50%

Female 79% 21% Female 62% Female 54%

Rural 78% 22% Rural 62% Rural 54%

Urban 87% 13% Urban 81% Urban 47%

Included Excluded
SERVICE PROVIDER USAGE
Mobile money is the most used service provider
• Formal inclusion continues Formal services use
to be driven by mobile
money. Mobile money service provider
64%
56%
• While mobile money and Commercial banks/MDIs/credit 14%
institutions 11%
banking registered
14%
increases since 2018, SACCOs
5%
SACCOs registered the 4%
Pensions
highest increase in uptake 2%
from 5% to 14%. MFIs / microlenders
3%
2%
• The main barriers to formal 2%
Insurance
1%
financial services continue 2023
0%
to be affordability, Capital markets
0% 2018
relevance and awareness.
SERVICE PROVIDER USAGE
VSLAs continue to be the main driver of informal financial services

Informal services use

• VSLAs continue to be the main

drivers of informal financial 42%
SGs/VSLAs/ROSCAs
services. Though the uptake of
42%
VSLAs services has not changed
since 2018.
10%
• There is an increasing prominence Burial societies
14%
of informal money lenders within
the community with the uptake of
their services more than doubling 7%
Moneylender in
from 2% in 2018 to 7% in 2023. community
2% 2023
2018
 ACCESS STRANDS
Financially excluded skew rural, women, dependents, living in East
Adults who have/use formal services are more likely to be male, urban-based and formally employed.
Those most likely to rely on informal services only are female, rural-based, traders and casual labourers.
The financially excluded are most likely female, rural-based, live in Eastern region, dependents and casual labourers.

Key demographics Main income source Region

Govt/Private
All adults 14 54 13 19 45 44 3 9 Central 20 58 6 16
salary or wage

Services
Male 18 56 9 16 17 68 6 9 Eastern 9 46 19 26
business owner

Trader business
Female 10 52 17 21 11 60 16 13 Kampala 22 69 46
owner

Casual labour /
Rural 10 53 16 22 8 54 16 22 Northern 13 50 18 18
piece work

Urban 24 57 6 13 Dependent 4 38 15 43 Western 12 59 12 17

Use bank services

Don't use bank services but have other formal services
Don't have formal services but use informal services
Financially excluded
COMPARATIVE ACCESS STRANDS
Reducing the exclusion level is challenging
Both banked and formal other inclusion has grown since 2018. A smaller proportion of adults are financially
excluded. Overall financial inclusion in Uganda and Tanzania is similar. There are common challenges to
deepening financial inclusion across EAC.

Uganda trends over time EAC country comparison

2023 14 54 13 19 Kenya 2021 44 40 5 12

2018 11 47 19 23 Rwanda 2020 36 41 16 7

2013 19 33 26 22 Tanzania 2023 22 53 6 19

2009 21 7 42 30 Uganda 2023 14 54 13 19

Use bank services

Don't use bank services but have other formal services
Don't have formal services but use informal services
Financially excluded
FINSCOPE UGANDA 2023 FINDINGS
Key Findings

FinScope Uganda 2023 launch findings

FINSCOPE 2023
Key Findings
• The adult population has grown significantly and on average is notably younger. This may be the most
important dynamic driving socioeconomic changes and financial inclusion policy.
• Trading is the most prevalent income source, but salaries/wages and service business incomes are growing.
• Mobile phone ownership and internet use have significantly grown but there are large gender and area gaps
• Although climate and green growth concepts are less familiar and a challenge for a largely poor population,
many already use various sustainable farming practices
• There are positive aspects to Ugandans financial health as well as scope to improve:
• Although more Ugandans track their spending, most claim insufficient earnings to cover spending
• Almost all Ugandans experienced unexpected expenses in the previous year
• Savings is key strategy many use to smooth these expected and unexpected expenses
• Half of youth do not have a strategy to be financially secure in future
• Formal financial inclusion has increased, driven by greater mobile money uptake.
• An increasingly youthful population poses challenges to reducing financial exclusion. Dependents have the
highest proportion of excluded. Exclusion also skews to women, rural dwellers, Eastern region and casual
labour.
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