• Authored By: EPRC Uganda
29 Jun 2022

Digital finance services accessed by women in Uganda include among others; payments, credit, savings, remittances, insurance. These services can be access through mobile money, agent banking. This is majorly done electronically.

This, therefore, means that to access such services one must have knowledge to use electronic gadgets, access to internet, own a phone among other things. In Uganda, there has been efforts registered towards improving access to digital financing, for instance; access to internet in rural areas which has opened up opportunities for rural poor to access mobile money services and agent banking.

The Third National Development Plan (NDPIII) recognizes that Information & Communication Technology (ICT) is a fulcrum for accelerating growth and an enabler for poverty reduction and wealth creation. Worldover, ICT has revolutionized the way production, market access, and distribution of goods and services are organized, leading to new business models that have led to fundamental changes in the way enterprises relate to consumers.

Women are particularly set to benefit from promotion of digital finances. Photo/UNCTAD

Digital financing is, for example, considered to be the wealth of the present and the future of financing. Digital financial services are thought to be an innovative platform to address issues of gender financial exclusion, with the potential of bringing down the restrictions brought about by cultural beliefs and customs, geographical location, and reduce transaction costs especially those of formal banking. The international finance community has endorsed digital financing as a success factor to achieve global inclusion.  As we embrace digital financing, do we find this viable for the women?

There is an understanding that digital finance will bring women agency and control over money and consequently shift the restrictive gender norms. Gender norms and customs have been highlighted as a significant factor that impact women progress in society.  In Uganda, when you move around urban areas you will see women docked down in mobile money kiosks, women tellers in banks, private financial institutions, in shops and factories. But the statistics in terms of women participation in digital financial service inclusion tells us a different story – the most resounding being that rather than beneficiaries, women are vessels in men’s transactions.

Women are visible but in reality, absent. Like Karl Marx would have observed, “Labour produces works of wonder for the rich, but nakedness for the worker. It produces palaces, but only hovels for the worker; it produces beauty, but cripples the worker; it replaces labour by machines but throws a part of the workers back to a barbaric labour and turns the other part into machines” this tells us that, women are abstracted by being engaged in work that produces wealth for the rich men and not for themselves. This raises critical questions that are always over looked. What does this tell us about the nature of economy? Who does the economy favour? Is digital finance the option to this? Will digital finance access alleviate this challenge of abstracted beings in form of women? Does the availability of these digital financing mechanisms infer access? Does access infer  use, later on, emancipation?

UNHS 2019/20 statistics show that there is still a challenge that the government must go over to operationalise the digital financial services in Uganda. The use of ICT amongst the target population is still very low, access to the internet is still poor though progressing.

Knowledge to use and operate ownership of phones is as well low. Forty-three per cent of Ugandan adults do not access financial services, formal or informal. Adults who are the least likely to have access to any type of financial services tend to be poor, single, very young, and not employed. The exclusion, therefore, is driven by a combination of several factors from low literacy and struggle to understand the financial process to structural restrictions (e.g., the lack of national ID cards for youth) to limited economic activity resulting in the limited need for digital financial services.in a study in China in 2020 by Guangwen it was noted that digital finance  provided by ICT companies and not by traditional banks, have the potential and can positively impact on peasant vulnerability.

This, therefore, brings hope in the sense that, if a population can own phones, then digital financing is possible.  Many women in Uganda have access to mobile phones according to the UNHS 2019/20. Seventy-four per cent of household members aged 10 and above were found to be owning phones. Of these 93% own phones individually, but this is mostly used to socialize on the internet. Up to 84% said they use phone and internet for socializing, financial contributions to support burials, social activities, medical support and many others and not to transact finance.

The failure to operationalize digital financing continues to negatively impact rural farmers and urban peasants. This group of people have unimaginable challenges which the government must address; issues ranging from knowledge gap where 64% of internet users lack confidence, knowledge and skills to use internet, to the high cost of equipment and internet (UNHS 2019/20). Much as   mobile money awareness and usage may be increasing, it is still faced with critical challenges that need to be resolved.

Covid-19, despite its adverse effects on the economy, has nonetheless forced people to switch to digital transactions. Will the Post-Covid era maintain or even concretize the digital financing age? Now that the government has introduced the Parish Development Model (PDM) as a poverty alleviation program, will digital financing compliment the PDM initiative? Yet still, is digital financing in position to propel access to financial inclusion/ services to households that operate in the subsistence economy? What needs to be done if this is to be achieved? Do we see the women and country ready to embrace this development? This if food for thought especially for policy makers, researchers and key development partners.

With the above it is crystal clear that digital financing has potential to contribute positively towards inclusivity and to improve women livelihood. However, for this to happen, government intervention is paramount.  Although interventions in this have been done, more still need to be done by bringing services closer to women in rural setting, increase access to internet, improve knowledge and skills to use the internet, improve privacy and security of users, tailor some financial services to low-income earners like women needs by creating institutions that can serve the women in rural areas, subsidised on some costs to encourage women participation.


This article was authored Mary Kajumba, a research associate at EPRC

Featured Picture: African Development Bank


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