Safeguarding Savings: Bank of Uganda Encourages Trust in Regulated Financial Institutions

Bank of Uganda Buildings
- Advertisement -

On the occasion of World Savings Day, the acting Governor of the Bank of Uganda (BOU), Michael Atingi-Ego, has urged the people of Uganda to place their savings exclusively in regulated financial institutions to protect and enhance the value of their money.

In his address during the 2023 Financial Awareness Month celebrations held in Kampala, Atingi-Ego emphasized the significance of earning returns greater than inflation to preserve the value of savings. He highlighted that this can be achieved by entrusting one’s money to formal and regulated financial institutions, including commercial banks, credit institutions, and microfinance deposit-taking institutions, all of which fall under the regulatory oversight of the Bank of Uganda.

The commemoration of World Savings Day in Kampala was organized jointly by the Uganda Institute of Banking and Financial Services (UIBFS) and the Uganda Bankers Association. The event brought together key stakeholders, financial sector regulatory bodies, and financial service providers at the Sheraton Hotel.

Atingi-Ego explained that regulated financial institutions offer the security of customer savings and provide interest on deposits, thus ensuring the preservation of the value of money. He cautioned against the practice of keeping money in non-regulated or informal settings, such as in a jar or under a mattress, as this leads to stagnant savings. Over time, the purchasing power of such savings diminishes, in contrast to savings held in regulated institutions, which grow over time.

According to the Financial Capability Survey (FCS) of 2020, a mere 20.4% of Ugandans save money with specific life goals in mind, such as retirement, education, or other long-term objectives.

- Advertisement -

In response to this low savings rate, the Bank of Uganda has implemented proactive measures aimed at promoting financial inclusion and enhancing financial literacy, especially in rural areas. These initiatives involve the delivery of financial literacy programs in local languages and emphasize the importance of savings among other financial services. The Bank of Uganda also conducts training for financial literacy educators in rural areas and airs financial literacy radio programs in local languages.

The event at the Sheraton Hotel saw discussions on savings involving key stakeholders, including the Deposit Protection Fund (DPF), UIBFS, members of the Uganda Bankers Association, such as DTB Bank, and the Uganda Retirements Benefits Regulatory Authority (URBRA).

Patrick Ezaga of the Deposit Protection Fund stressed the importance of associating savings with their initiatives, acknowledging that a significant portion of the funds held by depositors in financial institutions represents their savings. He encouraged the public to entrust their money to regulated financial institutions for increased security.

Varghese Thambi, CEO of DTB Bank, urged industry players to address emerging financial challenges, such as cyber fraud, through increased financial awareness and education.

- Advertisement -
0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments