A recent survey conducted by the International Monetary Fund (IMF, covers six years up to 2022) revealed a decrease in the number of automated teller machines (ATMs) and commercial bank branches in Uganda. This reduction, while modest, is associated with a shift in investment focus towards digital banking channels.
According to the IMF’s Financial Access Survey 2023, there has been a notable decrease in the number of ATMs in Uganda. In 2017, there were 4.31 ATMs for every 100,000 adult Ugandans, but by 2022, this number had dropped to 3.68. Unfortunately, the report did not specify the current total number of ATMs in Uganda.
Data from the Bank of Uganda Annual report indicates a decrease in ATMs from 851 in 2020 to 837 in 2021. This decline may continue as the IMF survey consistently shows a reduction in traditional banking facilities.
In the early 2000s, banks heavily invested in ATMs to provide easier access to banking services and reduce the congestion in banking halls, along with operational costs. However, the rise of services like mobile money and digital banking has prompted financial institutions to reevaluate their investments since they can now serve customers through digital means without needing physical branches.
The IMF report also shows a reduction in the number of commercial bank branches. In 2017, there were 2.73 branches for every 100,000 adult Ugandans, which decreased to 2.34 by 2022. In 2021, the Bank of Uganda Annual Supervision report noted that Uganda had at least 566 commercial bank branches, down from 580 in 2019.
Despite these reductions, the IMF report points to significant growth in the number of commercial bank depositors and borrowers in Uganda. Over the six-year period up to 2022, the number of depositors increased to 596.73 for every 1,000 adult Ugandans, while borrowers grew to 43.43.
The report doesn’t offer a specific reason for the decline in physical access to commercial banking services, but it is likely due to the substantial growth in digital banking and mobile money, which experienced rapid expansion in the financial services market from 2017 to 2022.
During this period, the report notes a significant increase in registered mobile money accounts, from 1,067.69 for every 1,000 adult Ugandans in 2017 to 1,569.75 in 2022. This signifies that more than 50 percent of adult Ugandans have at least two or more mobile money accounts. Additionally, there is a substantial supply of mobile money agents, with 2,391.71 agents available within a 1,000-kilometer radius.
On a regional level, the IMF report reveals that Kenyans have more extensive access to banking services compared to their East African neighbors, including Uganda, Tanzania, and Rwanda. Kenya boasts a higher number of ATMs and commercial bank branches per capita.
In 2022, Kenya had 6.85 ATMs and 4.39 bank branches for every 100,000 people, while Tanzania had 5.61 ATMs and 2.35 bank branches. Kenya also leads in mobile money, with 2,176 registered mobile money accounts for every 1,000 adults.
