Ugandan Fintechs Encouraged to Embrace AI and Blockchain

Financial technology companies (Fintechs) in Uganda are being encouraged to adopt emerging technologies like Artificial Intelligence (AI) and blockchain to improve financial inclusion and drive economic growth. This call to action was made during the MSME – FinTech Workshop held in Kampala on Tuesday, organized by Sustainable Business for Uganda (SB4U) in collaboration with the Financial Technology Association of Uganda (FITSPA).

Mr. James Ivan Ssentimba, Deputy Director of the Department of National Payment Systems at Bank of Uganda (BoU), highlighted the progress made in financial inclusion. According to the FinScope Uganda survey of 2023, financial inclusion has increased to 81 percent from 77 percent in 2018, largely driven by the adoption of mobile money services. However, Mr. Ssentimba emphasized that more needs to be done, particularly in leveraging advanced technologies to bridge the financial services gap for micro, small, and medium enterprises (MSMEs).

AI and blockchain present significant opportunities for Fintechs to enhance their services. Mr. Ssentimba pointed out that these technologies can help MSMEs improve access to credit, enhance operational efficiencies, and contribute more significantly to Uganda’s economic growth. He underscored the critical role Fintechs play in addressing the huge credit gap that exists between what MSMEs need and what they currently receive from traditional banking services.

Ms. Doreen Lukandwa, Vice Chairperson of FITSPA, elaborated on the benefits of adopting technologies like blockchain and AI. She noted that Fintech solutions can automate repetitive tasks, streamline costs, and enable data-driven decision-making. These efficiencies allow SMEs to focus on their core business activities, ultimately boosting productivity and growth.

Ms. Lukandwa also stressed the importance of partnerships between Fintech companies and banks, as well as the need for funding opportunities to support Ugandan Fintech businesses. She encouraged companies to network and gain insights into the needs of small businesses to develop innovative solutions.

Mr. Ssentimba assured that the Central Bank is committed to creating a conducive environment for Fintechs to thrive. The focus is now on promoting quality services, ensuring service availability, and improving customer satisfaction. He highlighted the need for more platforms and higher quality services provided by payment service providers.

Mr. Sofian Dahmani, Programme Officer at the European Union Delegation to Uganda, urged Fintechs to take advantage of existing credit lines to serve more Ugandans. He mentioned that the European Union facilitates access to capital by linking MSMEs to sources of funding and supports businesses in utilizing these funds efficiently. Mr. Dahmani also introduced the Access to Finance Portal, a resource available on the SB4U website that provides information on financing opportunities from Team Europe, the Government of Uganda, and other development partners.