Uganda: 10.9m mobile money accounts are inactive
At least 10.9 million mobile money accounts are inactive, according to Bank of Uganda.
In details contained in the Bank of Uganda Annual Supervision Report for the period ended December 2020, the Central Bank noted that the mobile money sector had recorded 30.7 million subscribers during the period with a substantial number of these not conducting a single transaction in at least three months.
Only 19.8 million customers, according to the report, which represents about 55 per cent of the total subscriber base, were active in the period under review.
A mobile money account, according to Uganda Communications Commission, is considered inactive if it spends at least 90 consecutive days without conducting a single transactions.
The Bank of Uganda details, therefore mean that at least 45 per cent of registered subscribers had not made any transaction in three months preceding the compilation of Annual Supervision Report.
New law on inactive accounts
Under the National Payment Systems Act, which effectively transferred mobile money regulation from UCC to Bank of Uganda, inactive mobile money accounts will be suspended or deactivated after a stipulated period.
The law requires mobile money companies, which are now stand alone businesses, to suspend mobile money or electronic money accounts that do not register a single transaction within nine months.
Such accounts, according to the National Payment Systems Act, shall be considered dormant and holders shall be given a month’s notice, within which they will be required to reactivate their accounts or risk suspension.
“At the expiry of the notice … the electronic money issuer [mobile money company] shall block the electronic money account [customer] and shall not permit further transactions until the account is reactivated by the customer,” the Act reads in part, noting that in the event of failure to reactivate the account within six months after it has been blocked, the electronic money issuer shall close it and remit details of the subscriber and any balances thereon to the Central Bank, which if not claimed within seven years, shall be sent to the Consolidated Fund.
The move seeks to eliminate redundant and dormant mobile money accounts as well as creating a proper understanding and a true picture of the mobile money industry, which the Central Bank is hoping to use in the drive to achieving a cashless economy.
Mobile money has in the last 15 years been one of the fastest growing sectors of the economy, averaging an annual growth of at least 10 per cent.
During the period ended December 2020, mobile money operations grew in both value and volume amid Covid-19 related challenges that continue to devastate the economy.
Mobile money has benefited and will continue to benefit from a campaign in which both banks and government are encouraging the use of non-cash payments to limit the spread of Covid-19.
Mobile money performance
During the period ended December 2020, according to Bank of Uganda, volume of mobile money transactions rose significantly during the period ended December 2020, growing by 24.1 per cent.
At least 3.5 billion transactions were registered while value of the platform, according to Bank of Uganda, grew by 28.2 per cent to Shs93.7 trillion from Shs73.1 trillion in the period ended December 2019.
The growth, the Central Bank indicated, was more visible in the quarter ending December 2020 as economic activity increased after government eased Covid-19 lockdown measures.
SOURCE: THE MONITOR / Dorothy Nakaweesi