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ISSUE 2 | Dec 2017 - Feb 2018

Ugandans Leading, Authoritative bankers magazine

Future Of Fintech In Africa PEOPLE

Profile of Standard Chartered Bank’s Cynthia Mpanga



Unpacking Fintech in Uganda: Risk and Regulation

Agent Banking comes to Uganda - Wilbrod Humphreys Owor, ED, Uganda Bankers’ Association

INTRODUCING TROPICAL BANK MOBILE The new way to manage your accounts anytime, anywhere

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Tropical Bank Limited, Unit 1 & 3, Lugogo Office Park. Plot 54, Lugogo Bypass (Rotary Avenue), P. O. Box 9485 Kampala Tel: (+256) 414-313 100, Fax: (+256) 312-264 913, e-mail:, web: 0800 100 044 (toll free)

Tropical Bank is regulated by Bank of Uganda

ISSUE 2 | Dec 2017 - Feb 2018


27 | Resilience is the Key to Success Cynthia Mpanga is the Corporate Affairs, Brand & Marketing Manager, at Standard Chartered Bank Uganda. The mother of three is also the President of the Public Relations Association of Uganda.


6 | How ‘Fintech’ Innovations Impact Financial Inclusion Financial technology, “Fintech,” has been reshaping the financial services industry with the level and speed of innovation that’s simply fascinating. How Far will it go in the continent?

11 | Unpacking Fintech in Uganda: Risk & Regulation Financial technology, “Fintech,” has been reshaping the financial services industry with the level and speed of innovation that’s simply fascinating. How Far will it go in the continent?

15 | New Basel rules, technology to induce bank mergers Uganda is set to witness a wave of mergers and acquisitions in the banking industry due to the onset of tighter and tougher Basel III regulatory measures and branchless banking through technological innovation, an expert has said.

18 | How New Financial Reporting Model will Affect Bank Clients The relationship between a bank and its customers has changed a great deal in the past few years. From the time when paperwork and bureaucracy was the order of the day to when technology is driving faster, more focused transactions, the business of banking has changed in a big way and mostly to the benefit of the customer.


23 | Sector Appointments and Promotions Meet newly appointed persons in the banking sector and know their experience.


32 | Banks embrace

systems integration with government

Government is set to integrate Information Technology systems of its ministries, departments and agencies (MDAs) with each other and private sector players like banks and telecommunication companies to improve service delivery and transparency.

Contents Editorial


Corporate news


35 | Uber, Stanbic Bank Partner to Provide Corporate Rides

45 | The Crane Bank Juggernaut Rolls on… Where does it end?

Uber and Stanbic Bank have announced a partnership that will promote a corporate credit card offered to businesses by Stanbic bank.

Along the way, there have been several bank closures. Teefe bank, Greenland Bank, National Bank of Commerce, Global Trust Bank and most recently, Crane Bank, however, the latest closure has opened Pandora’s Box.

elcome to the 2017 edition of the Bankers Magazine. It has been an eventful year so far, peppered with the closure of Crane Bank, acquisition of its assets by dfcu and the eventual lawsuit and countersuit. The industry continues to grapple with high costs of business and changing customer preferences which have thrust financial technologies into the forefont of strategies in the financial sector. The increased use of digital systems has brought with it the added risk of cyber-attacks. This edition contains discussions on financial technology, cyber security, the crane bank saga as well as a profile of Cynthia Mpanga, the Corporate Affairs, Brand & Marketing Manager, at Standard Chartered Bank Uganda. The mother of three is also the President of the Public Relations Association of Uganda. I trust you will find this magazine both informative and educational. Trevour Sanya, Editor


42 | Agent Banking comes to Uganda

Project Coordinator: Joseph K. Nshimye Editor: Trevour Sanya Sales Coordinator: Judith Akello Designer/Layout: Morgan Media

Agent Banking regulations have been finalized, and are currently being gazetted by the First Parliamentary Counsel (FPC). Wilbrod Humphreys Owor, Executive Director of the Uganda Bankers’ Association talks about the changes.

Publisher: Morgan International Limited P.O.Box 27624 Unicalo House, Kololo Plot 11 Archer Rd, Kololo Kampala Uganda Tel: +256 782 501 255 /+256 755 339 947


The Bankers journal is a registered Trade Mark and Copyright or Morgan International. Whereas a constant care to make sure that content is accurate. The views expressed in the published material, adverts, editorials do not reflect do not reflect the views of the publisher and editor. All rights reserved and nothing can be partially or in whole be reprinted or reproduced without a written consent.

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Letter BoU blame is unfortunate and dangerous Dear Editor,


he twists and turns in Crane Bank’s takeover by the Bank of Uganda, the subsequent takeover of its assets by dfcu and an eventual investigation into massive fraudulent activity at the former crown jewel of the Ruparelia Group has made for interesting reading. Although there is less focus on Crane Bank at the moment, the sheer size of the revelations makes this one of the largest private sector frauds in Uganda’s history. The grapevine started to buzz in 2014 when A.R Kalan, the banks’ managing director left for an extended leave of absence, one which he is yet to return from.

they are expected to accurately predict fraud. Businesses are expected to tell the truth. This means that the fraud, which has been taken to court to authenticate, if anything is a symptom of how society is entrenched with corrupt tendencies and how these unfortunate practices have infiltrated corporate culture. If the allegations against Crane Bank are true, is the Bank of Uganda the first to be lied to? Of course not. As recently as the year 2015, giant banks with combined assets several times the size of Uganda’s economy namely;

to pay for the demise of Greenland bank, Teefe bank, Cooperative bank, the National Bank of Commerce, Global Trust Bank and others that have been sunk by the rough tides of business. Also at risk are other regulators like the Uganda Communications Commission (UCC), the Insurance Regulatory Authority (IRA), the Electricity Regulatory Authority, Uganda Revenue Authority and the Uganda Retirement Benefits Regulatory Authority (URBRA) among others that regulate private business.

Whistle blowers alleged that Crane Bank provided inaccurate payrolls to the National Social Security Fund (NSSF), which consequently owes the fund a colossal sh52.9b. This, of course, is in addition to over $92m (about sh331b) and sh8.2b that the Central Bank believes was siphoned over the years. Interestingly, instead of praise for Bank of Uganda’s action in unearthing well hidden dirt, the mob has come out to lynch the Central Bank. An article by Chris Kiwawulo, under the heading “Bank of Uganda faulted over Crane Bank saga” in the Saturday Vision newspaper of July 15th 2017 highlights disturbing assumptions about the Bank of Uganda’s role in the Crane Bank matter.

Should regulators be held at fault for being lied to? Concern by Nsereko and many Ugandans is understandable but misplaced. These concerns show that the Bank of Uganda is one of a handful of government institutions that is still is held in very high esteem. In fact, the Central Bank is held so high in esteem that

Barclays, UBS, Deutsche Bank, Royal Bank of Scotland, JPMorgan Chase, Citicorp and Bank of America where fined over $6b (about sh21.6 trillion) by US and British regulators in the Libor scandal where they set rates that cheated customers while adding to their own profits in the massive global currencies market.

Questions will be asked of URA as to why it does not foresee falsified accounts and collects less taxes than possible, why UCC did not foresee mobile money fraud and why police does not foresee crime so as to maintain law and order.

If the banks could fool the best regulators in the US and the UK, how much more in Uganda where the economy is still very informal and corruption thrives?

We should be applauding the Central Bank for ensuring that Crane Bank depositors got their money out and that the banking industry has remained robust. The whistleblowers who provided the information should also be applauded.

Nsereko’s suit is dangerous in the sense that if granted by court, tax payers should prepare

James Kintu, Ntinda Dec 2017 - Feb 2018 | 3

News Briefs Stanbic to Raise Shs 10trillion for Oil Pipeline Stanbic Bank has been appointed to raise $3Bn (about Shs10.8 trillion) as part of required capital expenditure for the crude oil pipeline by the second half 2018.

UBA Foundation Donates Books to Ugandan Schools With the objective of improving the literacy levels of children in Uganda, the UBA foundation through United Bank for Africa Uganda today launched the Read Africa project at Emma High School, Kisaasi.


he UBA Foundation donated 500 copies of “What Sunny saw in the Flames” by Nnedi Okorafor to the students of Emma high school.  The book tells a tale of an American albino teenager with super powers.  

During a reading at the launch, Bola Atta, Acting CEO of the UBA Foundation, told the students that reading is the key to success and they ought to adopt a good reading culture. “Reading will open your world to endless opportunities, it will empower you with information to further your lives and change the world. Reading books is the key to achieving your dreams,” Atta said. Johnson Agoreyo, the UBA Uganda MD/ CEO said: “UBA Foundation was created 4 | Dec 2017 - Feb 2018

to serve the people, to enable financial and economic empowerment in the countries we serve, That can only be achieved if we empower the younger generations. At UBA we have decided to take on the responsibility of equipping the students with reading books, which is one of the most important tools on the journey to economic and social empowerment.” More books will be distributed across the country to other schools throughout the year. The Read Africa initiative was initiated as a response to the problem of low literacy levels in Africa where African children do not have enough access to books due to financial challenges and are therefore, not reading as frequently as desired.

The announcement comes at a time when Uganda is preparing to start production of its estimated 6.5 billion barrels of oil in the Albertine Graben, according to the bank’s chief executive office, Patrick Mweheire. “A lot of activities are going on, many tenders are being made and expectations are that the final investment decision for the project will be made in the first quarter of next year,” Mweheire said. He added: “Fundraising for the project will not cause any ‘currency mismatch’ because borrowing can be done in dollars.” The bank was appointed alongside Japan’s Sumitomo Mutsui Banking Corporation (SMBC), as the joint financial adviser for the 1,445Km pipeline planned to run from Hoima-in midwestern Uganda to Northern Tanzanias Seaport Tanga. Mweheire said the companies will explore raising bank debt or loans from export credit agencies among the options.

Executive Watch Standard Chartered appointes Albert Saltson as new CEO

Corporate News Uber, Stanbic Bank partner to provide Corporate rides

Adapt or Perish; Banks Warned


fter the recent collapse of the prominent Crane Bank, financial technology (Fintech) experts have warned that banks should adapt to the changing lifestyles of Ugandans or face possible collapse. Anthony Kituuka, an Executive Director at Equity Bank Uganda pointed out that the industry is under siege from foreign entertainment and communication firms like Google, Facebook, and Whatsapp; the telecommunication industry and new Fintech innovations that have garned the trust of Ugandans. He was speaking at the 2017 Uganda Institute of Banking and Financial Services (UIBFS) public lecture under the theme “The Evolution of Fintechs in the Region: Challenges & Prospects”. “You cannot stop technology due to its convenience. In the future, it will be possible to send money via Facebook and

rently renting, while most of the rest live rural areas without access to utilities like power and piped water. He urged banks to consider using finger prints to enable even illiterate customers to transact.

Anthony Kituuka, ED, Equity Bank Uganda. Whatsapp and this is the real threat to banks. Banking is something you do, not somewhere you go,” he said. “If you cannot adapt, you will die,” he cautioned bankers at the Imperial Royale Hotel. Kituuka described certain requirements for new account holders, such as utility bills as out of touch with reality since over 70% of all Ugandans are under 30 years and are cur-

Phrase Donald Lubega, a digital financial services consultant noted that banks should constantly upgrade their technology systems to guard against digital fraud which has become rampant. Timothy Musoke, the Head of Consulting and Technology at Laboremus pointed out that although many banks and telecommunication firms are creating smart phone apps to ease access to their services, it still takes several steps to make simple transactions. “A large portion of Ugandans are unbanked - this presents a large opportunity, however, many banks lack a digital transformation strategy. Banks have accumulated data over the years but they have not studied the data to provide what customers want,” Musoke explained.

Stanbic Bank Profits Drop as dfcu’s Soar


his year, banks will not make as much money as they made in 2016 given the dip in interest rates, Stanbic bank’s chief executive has said. Patrick Mweheire (Pictured) reveled during a briefing on the half year performance that while falling interest rates meant more people would be in a position to pay back the loans, it also means commercial banks’ profits margins will be lower. He said lending rates dropped by more than two percentage points over the first six months of 2017, which wiped off up to Shs100Bn of interest income from the banking sector’s loan book.

“Cutting lending rates by six per cent has an impact on revenue,” said Mweheire, referring to Bank of Uganda’s easing of monetary policy from 17 per cent to 10 per cent since August 2016.

same period last year. In a statement, dfcu’s board said: “In January 2017, dfcu bank acquired certain assets and assumed certain liabilities of Crane bank which have been successfully integrated into our operations.”

Meanwhile, Dfcu’s takeover of Crane bank seems to be paying off. Dfcu’s after-tax profits grew by a whopping 400 per cent to Shs114bn. It only made Shs 23bn in the

“This propelled dfcu into the three leading banks on the market,” the statement added. Dfcu numbers are staggering, given the fact the economy is struggling to get back to its footing. Customer numbers grew by 50 per cent while its assets moved from Shs1.8tn as at December 2016 to Shs3tn, making it only second to Stanbic whose assets are at Shs 4.7tn.

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How ‘Fintech’ Innovations Impact Financial Inclusion By Margaret J. Miller

Financial technology, “Fintech,” has been reshaping the financial services industry with a level and speed of innovation that’s simply fascinating. A month ago, my colleagues and I attended the 5th Annual Lendit USA conference to check out about the latest innovations and thinking in this field and see how we can apply it to our work.

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here is growing interest in trying to figure out this new industry and take advantage of the opportunity. Now billed as the largest Fintech industry meeting in the world, Lendit organizers started this event four years ago with about 200 participants. This year’s event attracted more than 5,000 people. We work on various areas of financial inclusion and are interested in new ways that can help expand access to financial services to hard-to-reach populations and small businesses in developing countries. We returned with a new appreciation for the magnitude of change that is coming, and how quickly it could occur – and already is in some instances. Some innovations will help developing countries leapfrog into this new tech era. This could have a significant – and potentially highly positive - impact on financial inclusion, and fundamentally change the nature of financial infrastructure.  However, these opportunities come with potential risks, such as those related to (un)fair lending practices related to unmonitored use and analysis of big data or increased systemic vulnerabilities due to threats to cybersecurity.  Here are key conference takeaways we find relevant to extending access to finance especially to people who are currently left out of the formal financial system.

Fintech as partners with banks (and competitors) The conference emphasized opportunities for partnerships with banks to advance the online finance industry. For the first time, all major U.S. banks attended Lendit, with mandates to figure out this segment and how to respond/leverage Fintech. Some presenters highlighted the difficulties traditional financial institutions will have in shifting to a radically new business model with lower fixed costs and even greater reliance on technology.

Importance of data Data is at the center of Fintech and the quantity of data, accessibility of data and Dec 2017 - Feb 2018 | 7

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“Customers don’t enjoy going to a bank to discuss finances,” said keynote speaker Scott Sanborn, CEO of the online lender Lending Club. While not unexpected from that perspective, who wouldn’t agree with this statement? ability to rapidly analyze and use data are moving much faster than the ability of traditional business models to adapt. For example, traditional credit reporting institutions are already being challenged – and perhaps even overtaken in some areas – by big data/ alternative data approaches, including those where consumers voluntarily share data (even to the extent of sharing all the data on their smartphones) in order to get credit or other commercial benefits.

Consumer protection Increased access to both payment and non-payment data through big data analytics creates a number of critical challenges. On this particular topic, Richard Cordray of the U.S. Consumer Financial Protection Bureau (CFPB), called for stakeholders’ participation in providing insights and experience that could serve as examples for addressing risks and technological challenges that consumers face when sharing their information. “Consumer protection and compliance must be essential elements of the business model, from beginning to end,” he pointed out.

Customer-focused business Some new business models focus on a commitment to acting in the consumers’ interest, such as the online investing platform Betterment. This business model takes a fee off the top in exchange for unbiased advice on investment and income and wealth management strategies and options. The idea is to increase trust in financial services providers through an incentive compatible business model and transparency – to ensure that financial firms will act to maximize financial returns for their customers, not for themselves. 8 | Dec 2017 - Feb 2018

A farmer receives payment via mobile money. Fintech is widening financial access.

Finance embedded in transactions “Customers don’t enjoy going to a bank to discuss finances,” said keynote speaker Scott Sanborn, CEO of the online lender Lending Club. While not unexpected from that perspective, who wouldn’t agree with this statement? The trend will be for finance to be wrapped within a transaction seamlessly once the payment mechanism is enabled – such as uber where payment is set up once and then not revisited. There is a consumer protection risk if this comes to pass as consumers are less aware of the cost of finance or take on even higher levels of debt through automatic credit line extensions.

Voice, not text, as the next major interface The trend is toward simpler interfaces and technology solutions including the ability to use voice extensively to conduct transactions and business, as evidenced at Lendit by IBM’s demonstration of Watson as an avatar financial advisor – still in prototype but very interesting, including for low literacy populations.

Strong interest in the legal and regulatory framework A number of regulators were in attendance, mostly from the U.S. (conference organizers are planning upcoming events in Shanghai

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and Europe where regulators from those jurisdictions will join.) The industry is keenly aware of the importance of establishing an appropriate legal and regulatory framework to keep standards high, avoid large-scale frauds that can shake both investor and consumer confidence, and provide rules of the road to make business model and expansion decisions clearer. Regulators are interested in the potential for lower cost, more efficient business models and increased healthy competition in financial services. Margaret J. Miller is the Lead Financial Sector Economist at the World Bank.

Many interesting new business models A few notable examples: (1) Smartphone-enabled financing offered by PayJoy is set to create the lowest but very significant equity for the poor and could easily serve as a moveable collateral. (2) Carrying one’s credit history across borders is on route to becoming a reality thanks to the new startup called NOVA, which was selected a winner of Pitchit@Lendit. Is Fintech affecting your work with clients (either public or private sector) in financial sector development in emerging markets? We’d love to hear from others how they are addressing these challenges and balancing innovation with other concerns such as stability and consumer protection.

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Regulation and Fintech Should Sync Bowmans Uganda (AF Mpanga Advocates) recently held the first of what will be a regular series on thought leadership conferences at the GoldenTulip Hotel. The theme was “Fintech in Africa: unpacking risk and regulation.” Below is a summary of some key presentations;


oel Muhumuza, a partner at Financial Sector Deepening (FSD) Uganda revealed that a Fintech association is being formed to create clarity about new innovation such as digital currency. Esther Chibesa, the Citibank head of treasury solutions in East Africa pointed out that commercial banks need to collaborate with Fintech firms that create digital currency in order to ensure soundness of their financial systems and keep themselves relevant to customers. “Well designed payment systems drive economic growth. Money is whatever we say it is and it will continue to evolve,” she said. Jacqueline Lule, Of Counsel at Bowmans noted that all Fintech companies should be

“Well designed payments systems drive economic growth. Money is whatever we say it is and it will continue to evolve,” Esther Chibesa, the Citibank head of treasury solutions said. registered and licensed so that they abide by a uniform set of standards and regulations as a means of quality assurance and protection of the Ugandan public.

Various speakers at the Bowmans Uganda Thought Leadership Conference. 10 | Dec 2017 - Feb 2018

UCC Ronald Bakakimpa revealed that proper regulation of the emerging Fintech sector will bolster cyber security. He revealed that a trial digital financial service developed by the UCC had been attacked 7,113 times in just one day by hackers in the UK, US, China, Russia and Canada; warning that most developers, who are not yet regulated, lack the means to detect attacks until it is too late. David Mpanga, partner at Bowmans noted that Fintech will do away with the need for trusted intermediaries in payments and complex transactions. “Fintech is helping banks to reach and bank the unbanked or previously unbankable as well as bank those who were already banked better,” he said.

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Unpacking Fintech in Uganda: Risk and Regulation By Dr. Maureen Mapp University of Birmingham Law School, England

The greatest inhibitor for Fintechs is data security and protection. Nearly 1.4 billion data records were lost or stolen in 2016 and only about 8% of data breached was encrypted.

A man uses mobile money to make a payment. Fintech is helping banks to reach the unbanked.


f 1,050 IT decision makers surveyed worldwide, 94% believe their perimeter security is quite effective at locking out unauthorized users from their network BUT, 65% were not confident that data would be protected if perimeter is breached. Still, nearly six in 10 (59%) of all organisations believe that all sensitive data is secure. Interestingly over half of respondents did not know where their sensitive data is stored and a third of businesses do not encrypt valuable information such as payment data. Challenges of Regulation for Fintench include doubts from financial regulators, warnings on dangers of Fintech (India, UK, Uganda and Nigeria). The nature of Fintech is difficult to regulate because of libertarian ethos that eschews control by centralised bodies & sover-

There is no legal definition for Fintech, it largely operates in a grey zone, as a result Fintech startups may not be legal entities with proper contracts in place.

eign power. There is no legal definition for Fintech, it largely operates in a grey zone, as a result Fintech startups may not be legal entities with proper contracts in place.

In Confederate of state bank supervisors v OCC & anor (2017); the Office of the Comptroller of the Currency (“OCC�) did not formally define what constitutes a Fintech company leaving the term to a wide variety of services, from the traditional payment processing to the more cutting edge such as crowd funding and digital currencies such as bitcoin. There is need to resolve who should regulate Fintechs; what should be regulated, and how Fintechs should be regulated (mode; strategy, functions of law, values, approaches, principles). Derived from her presentation at the Bowmans Uganda Thought Leadership Conference.

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Fintechs & Payments By Joel Muhumuza Partner Support Specialist at Financial Sector Deepening Uganda

Most payments in Uganda are by cash. And in fact, this is a sentiment shared by many around the world despite the introduction of electronic currency and payments. An anonymous comment on “The curse of cash” said. “Cold, hard cash may allow criminals anonymity, but it also affords honest, law abiding people the (freedom) to live [their] lives outside a shaky and corrupt system … Beyond that, why should honest people not be allowed anonymity?


he day we go cashless, the government will be able to track your ‘every move.’ Some argue that this is nothing more than sheer propaganda to enable the money powers to steal from ‘the little people.” A digital payments ecosystem is necessary for payments to be fully effective. This means we require the market system approach to change. Right now the ecosystem for Uganda is arranged for mobile and for P2P. A Peer-toPeer, or P2P, economy is a decentralized model whereby two individuals interact to buy or sell goods and services directly with each other, without intermediation by a third-party, or without the use of a company of business. An ecosystem needs to be created to sustain electronic payments with each party playing specific roles. Parties can includes; Mobile Network Operators (MNOs), Crowd sourcing, merchant aggregators, Payment processors, application service providers and system integrators, card/terminal manufacturers, payment and identity networks and analytics. The support infrastructure needs to be robust and specialization is key. As with any market system, consumers and merchants need to be supported by strong regulations. However, the largest impediment to innovation and development is unclear legal environment and institutions that define the space and give recourse where necessary. There is need for reliable Infrastructure with reliable internet connectivity, network reach and a cost of POS (Point of Sale) that will not inhibit uptake of electronic payments channels.

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Customer concerns: Fintech systems need to be designed to suit the customer need (Fast ,reliable, cheap). There is also need for consumer protection standards.

We know that we need infrastructure, good legal environment and a customer centered approach to make digital payments the norm in a cash centered economy.

There is need for enabling payments law such as a National Payments Law (Draft policy to Cabinet), Data protection Bill (in parliament) and Regulations for NIRA (National Identification and Registration Authority) database access. Customer concerns: Fintech systems need to be designed to suit the customer need (Fast ,reliable, cheap). There is also need for consumer protection standards. Lastly, the future….Beyond payments, beyond banking and business as usual, technology has opened up a new world that we must get ourselves ready for the new frontier. Derived from his presentation at the Bowmans Uganda Thought Leadership Conference.

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Future of Fintech in Africa By Bram Peters UNCDF Country Technical Specialist – Digital Finance

We may see a dramatic shift in actors and the use of DFS software in the next few years with countries in East-Africa and Asia leading the way. DFS 1.0 is coming to a close, DFS 2.0 will be platform based. DFS 3.0 is already looming on the horizon. The Fintech movement is progressing faster than you think. Successes include; • Wallets outnumber bank accounts in East Africa. • Digitization of ID • Mobile payments have become ubiquitous in many markets, with greater variety of 3rd party providers. • DFS is legal in most markets with regulator support. Although Uganda still has some challenges to overcome. • Some great product examples of 2nd generation DFS that reach previously excluded (like MoKash) • New DFS Plus use cases “riding off ” the digital payments rails; such as pay-go solar electricity.

Shortcomings • Advanced DFS markets are hitting plateau in uptake and showing limitations of currently successful DFS Business Models. • Cybersecurity and use of data (ownership, security, privacy) has not been well addressed and is looming risk. • Competition is not necessarily providing lower cost • Mobile network operator (MNOs) and banks remain risk-averse • Innovators rely very much on the whims of a very turbulent MNO industry • The failure of customer adoption is well understood and consistent across markets: 1) see no value; 2) cost/distance; 3) need to improve user experience design (UX, UXD, UED or XD) by enhancing user satisfaction through better usability, accessibility, and pleasure provided in the interaction with the product.

Market trends to watch

• More focus from regulators on payments such as e-money license for non-banks and in Uganda the NPSA. • Challenge for many regulators to keep up with the fast pace of the market... • Increasing penetration of smart phones web/app based user experience. • More opportunities for OTT (Over The Top) services – audio, video and other content delivered over the internet. • Generating more big data • More interest and companies focused on niche groups, products • Result of commoditization/platforms > This allows for niche players to arise and diversify leveraging the payments platform. • More commercial interest to invest in Fintech especially interest to scale; however we believe that to reach certain segments of the low income market still

require to be subsidized to reach. • Shifting interest from development partners from Financial Inclusion to Digital Inclusion. • Digitization drives new business models with underlying financial services toaddress broader development issues. • Creativity and imagination, as well as the ability to collaborate and partner are going to be the new core competences that can create lasting competitive advantage in financial services. Derived from his presentation at the Bowmans Uganda Thought Leadership Conference. Dec 2017 - Feb 2018 | 13

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Emergence of Fintechs: Banks Experiencing an Uber Moment

In recent years, digitization and the Internet have turned traditional segments of the financial sector upside down. When it comes to financing, a business project or a fancy wedding, Fintech companies are happy to broker loans to both companies and private individuals.


anks are on the brink of an “Uber moment”, as the explosion of Fintech disrupts the industry. Surveys by the World Economic Forum shows that the Fintech Evolution will lead to massive job cuts in the banking industry in the next decade. Up to 30% of current employees in banks across Europe and the US may lose their jobs to technology by 2025, according to another report by Citigroup, which forecasts that around 1.8 million positions will go – mainly as a result of the automation of retail banking. Investment in Fintech has soared in the past decade – from $1.8 billion in 2010 to $19 billion in 2015 and growing. This comes as financial technology firms make a beeline for profitable growth areas according to the World Economic Forum.

Fintech has leveled the financial playing field. 14 | Dec 2017 - Feb 2018

Around 1.8 million positions will go – mainly as a result of the automation of retail banking. Fintech has also leveled the financial playing field for everyday people, giving them access to services previously reserved for the wealthy or individuals of a certain economic stature. Take investing for one example. Technology and data make it much easier and cheaper to bring investment advice to the masses, which means something that was geared toward a certain asset level is now open to everyone. Or consider lending. In the past, underwriters only had a few data sets to rely on when

assessing risk, which meant lots of people were turned down or charged a higher interest rate for a loan. Fintechs are relying on different information data sets when underwriting consumers, looking at things traditional banks have never considered and providing more people with access to personal and business capital. All of that could never happen without powerful computer systems and software and data scientists who can make sense of it all. Kathleen Boyle, managing editor at Citi GPS, points out that advances in technology have changed customers’ relationships with banks. “Customers rely less and less on walking into a branch for their banking needs, and instead have digital options to help them – ATMs, online chat, mobile phones and internet banking,” she said.

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New Basel Rules, Technology to Induce Bank Mergers Uganda is set to witness a wave of mergers and acquisitions in the banking industry due to the onset of tighter and tougher Basel III regulatory measures and branchless banking through technological innovation, an expert has said.


lobal Trust Bank (GTB), National Bank of Commerce (NBC) and Crane Bank have been acquired in the recent five years due to insufficient capital. Geoffrey Gursel – the Citi bank sales and implementations head for treasury and trade solutions in Sub Saharan Africa has warned that more banks could follow. He pointed out that over the last three years the number of commercial banks in Africa has shrunk from 300 to about 120. He added that Nigeria alone saw a massive reduction from 97 to 19 banks with some banks only maintaining a regional office. “The shrinking banking community has to do with the digitization of Africa. Although cash is still king in many parts of Africa, mobile money is helping to redefine what banking is to the consumer – banking is now over the mobile phone and the internet,” he said at the Citi Bank Treasury and Finance Forum at the Serena Hotel yesterday. “Central Banks are set to enforce new tier one capital requirements through the Basel III framework which look at whether banks have sufficient liquidity ratio’s to sustain an attack or an event like a recession, “Because of that smaller banks are being acquired and bought. The overall banking community is becoming more specialized, because of that, the entire banking community is becoming smaller,” he explained.    The Basel III (or the Third Basel Accord) is a global, voluntary regulatory framework on bank capital adequacy, stress testing, and market liquidity risk. It was agreed upon by the members of the Basel Committee on Banking Supervision in 2010/11. Implementation of the new rules was meant to start at the end of March 2018 but has been

Strides in Fintech come with the risk of cyber fraud. Research by Citi Bank shows that cyber fraud will be worth US$ 2trillion by 2018.

The overall banking community is becoming more specialized, because of that, the entire banking community is becoming smaller.

On top of this, banks will be required to keep a “capital-conservation buffer” and a “countercyclical buffer” that is intended to cool overheating, at times when demand for money outstrips available supply. Observers fear that the new high capital requirements could tie up money that could have been better deployed elsewhere.

extended to 31th March 2019. According to analysis by the Economist magazine, globally systemically important banks, will incur an equity surcharge, ranging from 1% to 2.5% and will be required to have a total loss-absorbing capacity.

At the same event, Mary Sabwa, the Citi bank head of treasury and trade solutions in East Africa made a presentation on cyber security and fraud prevention urged firms to create multiple levels of authorization, carry out daily reconciliation of accounts and to confirm peculiar transactions with clients due to rampant digital fraud.

The idea is that should they fail, they can be automatically recapitalized by investors, without troubling taxpayers. In addition, all banks will be required to have enough high-quality liquid assets to withstand a month of outflows under stress and maintain sufficient “stable” funding.

“In the year 2018, the cost of cyber fraud will be $2 trillion. The trending methods used by fraudsters include beneficiary change, CEO impersonation and payments system compromise. Firms should do more to reduce the opportunity for fraudsters to strike,” she said.

Dec 2017 - Feb 2018 | 15

financial technology

The Future of Financial Services is Now Digital By Joshua Oigara, KCB Group CEO and MD.

East Africa’s financial sector is on the brink of yet another revolution that will define the playing field in the next decades to come: financial technology. Fintech, as it is increasingly being referred to, is taking the industry by storm, causing a major disruption becoming a trailblazer and redefining the financial sector in the region and globally.


n this day of fast paced technological innovations, disruption is the new norm: Uber, Instagram and M-Pesa are all good examples of what technology can do to reconfigure the way we live. Digital disruption and especially mobile technology in and around Africa, is significantly accelerating towards a revived Fintech industry: It began as a form of disruption, a wave, but is now quickly getting organised through consistent support/funding and proposition evolution to an entire new industry, Fintech, that is currently transforming how financial services are being offered. Unfortunately or rather coincidentally this is happening right outside the normal operations of existing and established financial institutions; right outside their high barriers of regulation and in the heart of exceedingly high customer expectation. For instance barriers that previously existed in

16 | Dec 2017 - Feb 2018

the manage risk in lending for Banks are now our greatest disadvantage. Today, most countries have deeper and more stable financial systems, thanks to innovations that have helped Africa leapfrog more traditional banking models. This technology is fuelling our growth, creating new opportunities and disrupting the way business has traditionally been conducted. Indeed, the burgeoning middle class and abundance of SMEs in East Africa present great opportunities for financial services companies to provide retail banking services to individuals, as well as trade finance to SMEs.

For instance barriers that previously existed in the manage risk in lending for Banks are now our greatest disadvantage.

In Kenya, the introduction of the mobile money transaction platform, M-Pesa in 2005 has been globally acclaimed as one of the most disruptive technologies ever put to good use, having moved monetary transactions into the digital age. The rate of adoption of digital financing in Kenya is considered among the highest in Africa. Kenya is now recognized as the home of mobile money, reaping the benefits that come along with it. In Kenya, out of a population of approximately 44 million people, the Communications Authority of Kenya’s (CAK) latest report indicates that the country has 37.8 million active mobile phone numbers with the 21.6 million registered users. As the speed of technological innovation increases, banks are facing a new challenge as to where to focus their investment and what technology to use. The evolving competitive environment, coupled with the external developments will require banks to continually rethink their strategies. The future is in digital. This article was first published in the Business Daily.

financial technology

Forensic risk modelling in banking industry

The enactment of the Financial Institutions Act 2004 and subsequent amendments and/or regulations was seen as the magic bullet to wipe out tears in the financial services industry in Uganda.


owever, with the Central Bank suing Dr Sudhir Ruparelia and demanding UGX400billion from him has shocked us. To put this in context, UGX 400billion is about 50% of the shareholders’ equity of the largest bank in Uganda, which is Stanbic Bank. But this kind of money is being demanded from one individual. I have also read that the money is an accumulation from 5-10 years back and that there was a complex web of transactions. The statutory audit of the annual financial statements of commercial banks is unlikely to uncover such a web. A forensic audit is usually triggered by a loss that has happened – this means that the exercise is a “post-mortem” and simply tries to answer the question – “what caused the demise of the bank”? I propose a more dynamic, agile and forward-looking approach and this article focuses on two areas that could soon make some banks a “sitting duck”: Showing the non-performing loans (NPLs) as a percentage is easy, but could explode and burn the bank to ashes. There is an emerging phenomenon where a business (which is now an NPL) is sold to another person/business because the existing borrower has massively defaulted on payments. This could be poor judgement of the highest order. Forensic credit risk modelling would help trace the history of the beleaguered business including the documentation that was submitted to the bank to access the loan facilities. Second stage - move into an investigation of the circumstances that have caused the business to default on the loan (despite claiming it was economically feasible at the start). Third stage – investigate the economics of that business vis-à-vis the competitors and economy as a whole. The idea is to determine whether restructuring the loan will be helpful or wheth-

CPA Albert Richards Otete er a new borrower can turn it around the business or whether the business/borrower could be suffering from the “Grenfell-disease”. These models are available;

With the threat of cryptocurrencies (offering mindboggling margins in US$), there could be a seduction of some bank dealers galloping for gold and investing depositors’ money into these digital currencies; which market is approaching US$100billion worldwide.

There is pressure for banks to report big profits and one low-hanging fruit has been the net income from foreign currency trade. However, rather than wait for a “Nick Leeson virus infection” through speculative trading, the bank can undertake a forward-looking model built around forensic intuition. With the threat of cryptocurrencies (offering mind-boggling margins in US$), there could be a seduction of some bank dealers galloping for gold and investing depositors’ money into these digital currencies; which market is approaching US$100billion worldwide. I think that some traders in banks could be tempted by the huge bonuses that they are promised if the profits come in and this could propel very risky behaviour. But a dynamic forensic mindset by the market risk jurisdiction could “nip that risk in the bud” before it explodes. CPA Albert Richards Otete is a PhD candidate and consultant

Dec 2017 - Feb 2018 | 17

financial technology

Street vendors are some of many bank clients that will be affected by regulatory changes in the industry.

How New Financial Reporting Model will Affect Bank Clients

By Jeremy Awori

The relationship between a bank and its customers has changed a great deal in the past few years. From the time when paperwork and bureaucracy was the order of the day to when technology is driving faster, more focused transactions, the business of banking has changed in a big way and mostly to the benefit of the customer.


he customer is no longer just an anonymous number. Banking is nearly at a stage where products and services are tailored for the individual customer. Banks are close to create products, price them, and offer them to customers at an individual level.

home the fact that regulation as it were prior to the crisis had not served customers, banks, the economy and society as well as it should have. In the decade since, this realisation has led to the review of accounting standards to create a more resilient and stable banking sector.

Yet, the growing complexity of financial products, and the entire financial industry, has meant that regulation has had to follow suit. Even as new products and new ways of selling them are being developed, banking still needs to be as solid, trustworthy and safe as it has always been, perhaps even more so.

One of the most significant changes in this arsenal is a new reporting standard that is due to come into effect on January 1, 2018 across the globe. International Financial Reporting Standard 9, or IFRS 9, was developed in response to the global financial crisis to help ensure financial institutions recognise and account for risk more prudently.

Lessons the world painfully absorbed in the aftermath of the 2007-08 financial crisis brought 18 | Dec 2017 - Feb 2018

The standard was issued by the International

Accounting Standard Board (IASB), and for which compliance is a regulatory requirement in the Kenyan Companies Act, 2015. IFRS 9 deals with accounting for financial instruments such as loans and advances, customer deposits, government securities, cash, borrowings, other debtors and creditors. The standard guides the classification and measurement, impairment and hedging of these financial instruments. While IFRS 9 may sound complicated and esoteric, it is at its core, very simple, the fundamental change being recognition of credit risk losses. Credit risk is the risk that a borrower will default on their contractual obligation

financial technology

to repay a loan. Traditionally, a bank (or any other financial institution offering credit products) has recognised a loan’s risk at the point of default.

create a big data analysis model around that customer. However, the introduction of the interest rate caps in the Kenyan market forces the same price on customers, regardless of risk, and it means that we are thus unable to segment the market and offer better pricing for less risky customers. The net result is that we are potentially looking at a further contraction to private sector lending which will impact economic growth.

Under IFRS 9, banks will be expected to provide for things that are expected to happen in future. IFRS 9 now requires that these institutions recognise this risk at the beginning and during the entire loan’s credit life cycle. In this case, a better understanding of the borrower’s credit profile, industry, the current and expected macro-economic environment will be important determinants of how to score, measure and price for risk. Impairment is a measure of risk attributable to the cash flows that an entity may fail to realise in the event of a default. It is a factor of the customer’s probability of default over a specified time horizon, the expected exposure at default and the loss given default for the cash flows not recovered. Additionally, IFRS 9 introduces a new requirement of calculating credit risk associated with undrawn or unutilised but committed credit facilities reported as off balance sheet exposures. These include credit and overdraft limits, letters of credit, performance and financial guarantees. Further, the standard introduces a requirement to hold credit allowances for government securities previously not in scope for impairment. This comes in the wake of sovereign risk default witnessed during the 20072008 financial crisis. By analysing, recognising and allocating this risk throughout the life cycle of the loan, financial institutions will be able to tell, at a glance, how much risk their loan books carry, and allocate their resources accordingly. IFRS 9 substantially changes the rules on provisions for impairment, which will in turn mean significant changes for the customer. The one that the consumer will notice the most will be the introduction of cross-product default. Instead of looking at each facility the customer has — credit card, mortgage, personal loan — in isolation, IFRS 9 will mean that we will

Jeremy Awori

Lessons the world painfully absorbed in the aftermath of the 2007-08 financial crisis brought home the fact that regulation as it were prior to the crisis had not served customers, banks, the economy and society as well as it should have.

have one customer, and default on one product will mean banks have to impair the other products the customer has. So why does IFRS 9 matter to you? It goes back to what we started with, and the revolution in the information and data, pricing and customer engagement we manage with you. IFRS 9’s demands on the risk modelling and pricing of credit products bring these revolutions full-circle. Banks and other institutions will now have to know their customers and their financial profiles a lot better, in order to more efficiently allocate risks and minimise forward looking expected impairment and provisioning. Theoretically, IFRS 9 should mean better pricing for lower-risk customers, as the bank will have a far greater amount of information on each customer, and will have the ability to

It is therefore important for the government and industry players to come together and review the impact of the impending IFRS 9 rules and make the necessary adjustments to the law so as to release much-needed capital flow to deserving businesses in order to stimulate economic growth. IFRS 9 also demands a different relationship between banks and regulators. The first and most obvious is that with the body mandated to maintain accounting standards in Kenya, the Institute for Certified Public Accountants in Kenya (ICPAK). ICPAK is working with relevant industry players to translate the varied requirements under IFRS 9 to the Kenyan situation. The Central Bank of Kenya is also reviewing its position in view of the requirements under IFRS 9. Issues including capital ratio requirements, which are directly under the CBK’s purview, are part of this review and we expect the CBK to communicate its view in due course. Other institutions such as the Kenya Revenue Authority (KRA) are also crucial to this. Since the core of IFRS 9 – the recognition and allocation of risk – does mean changes to a bank’s balance sheet as well as profit and loss position. How the KRA translates its reporting requirements to the industry will be key to the success of the rollout of IFRS from January. Ultimately, the introduction of IFRS 9 on 1 January, 2018 will change the global banking landscape and introduce a new normal for the sector. First Published in Business Daily. Awori is the Managing Director, Barclays Bank of Kenya Dec 2017 - Feb 2018 | 19

Cyber fraud

Cyber-criminals Draining sh126.4b from Local Banks Annually; What to do In this computer age, one thing that has become a necessity for the modern bank is internet connectivity and robust digital systems; however this comes with the risk of cyber-attacks. A cyber security roundtable at the World Economic Forum in Davos in January 2017 heard that the biggest banks face up to two billion cyber-attacks a year. Despite the hike in the frequency of attacks by double digits annually, many medium and large corporations do not devote sufficient resources to cyber risk management.


n the words of former FBI director James Comey; there are two types of big companies; those that have been hacked and those that don’t know they have been hacked. A report by Serianu, a Tanzania-based non-governmental organization, points out that those African countries lost $2 billion in cyber-attacks in 2016. In East Africa, Kenya lost $171 million to cyber criminals; Tanzania lost $85 million, while Uganda lost $35 million (about sh126.4b).

How recent bank cyber-attacks occurred According to two recent KPMG surveys cyber security issues rank highest among risks and facing Global Systemically Important Financial Institutions (G-SIFIs). These results reflect and confirm the trend over the past two years where three major cyber-attacks on banks became public. Two of the three attacks resulted in financial losses of around USD 100 million and raised discussions about the reliability and security of digital networks used by banks all over the world. The three breaches were committed by exploiting weaknesses of the digital infrastructure and systems that connect banks to the global SWIFT network. The first attack, against the Ecuadorian Banco del Austro (BDA), was conducted in January 2015 and caused financial losses of USD 12 million. The attack was carried out over a period of 10 days. Investigations demonstrated that the transactions contained anomalies that should have raised suspicions among the bank’s employ20 | Dec 2017 - Feb 2018

ees for the following reasons: 1) the transfers took place after the bank’s working hours; 2) the trade beneficiaries were located in unusual locations; and 3) the size of the amounts transferred were large enough to raise flags. The general public learned about the attack only recently, 15 months after it occurred, suggesting that the bank hesitated to disclose this information about this cyber-attack in order to prevent reputation damage – and this would not be unique; it seems that banks generally avoid the prompt disclosure of cyber-attacks

to preserve their reputations. In December 2015, Vietnam’s Tien Phong Bank (TP Bank) succeeded in halting a cyber-attack in which hackers attempted to use fraudulent SWIFT messages to transfer more than EUR 1 million from TP Bank. The method for this attack differed from the BDA case, in that fraudulent messages to TP Bank were sent not through bank’s network but by using the infrastructure of an outside

Cyber fraud

vendor who was hired by the Vietnamese bank to connect it to the SWIFT messaging system. In February 2016, a fraudulent transfer of USD 850 million from Bangladesh Central Bank was blocked after SWIFT detected a spelling error in the name of the recipient. However, Bangladesh Central Bank was not able to prevent the entire transfer and the hackers successfully transferred USD 101 million (of the USD 850 million), of which USD 20 million was recovered by the central bank after identifying the heist.

Cyber Stress testing

According to two recent KPMG surveys cyber security issues rank highest among risks and facing Global Systemically Important Financial Institutions (G-SIFIs).

Protecting your bank Among industry participants, including supervisors, banks, and cyber risk specialists, it is agreed that the following key initiatives could improve cyber resilience in the Eurozone:

Real-time alert database The lack of a sophisticated threat intelligence scheme is one of the key reasons that banks are unaware of an eminent cyber-attack.

In these incidents, all three banks were target-

ECB officials are taking a closer look into the BoE’s initiative of stress testing the cyber defenses of the country’s big banks by carrying out “ethical hacking” exercises. Working with US regulators, the BoE has also been carrying out transatlantic cyber exercises to simulate the impact of a large attack on the financial system.

Guidelines and best practices ed using similar hacking techniques: obtaining valid credentials of SWIFT operators unlawfully then initiating transactions by sending fraudulent SWIFT messages on behalf of these operators. With this information, the banking community should be able to prevent further attacks by uncovering new unforeseen attack patterns.

To conduct the attack, hackers created a malware that prevented the system responsible for checking monetary transactions from functioning properly. This type of malware is difficult to detect. According to some cyber-security companies, it takes around 146 days for an organization contaminated with such a malware to become aware of its compromised systems.

Currently, many banks do not run test the cyber-risk of their systems by means of an advanced cyber-attack simulation.

The ECB is now requiring banks to submit information on cyber threats on real-time basis and has been collecting data on significant cyber incidents at 18 of the Eurozone’s biggest banks since February 2016. The aim is to collect information on major cyber incidents that present serious security dangers, allowing the ECB to spot patterns and warn other banks of emerging threats. The ECB’s goal is to set up a database to register incidents aiming to create an early warning and analysis system for banks. While the project is in a pilot phase, the cyber database is due to be rolled out to the 129 banks that the ECB directly supervises in 2017. The ECB plans also to share the data it collects with other central banks, such as the US Federal Reserve and the Bank of England (BoE), through its regular meetings with fellow regulators.

Even though many frameworks and standards, national and/or global requirements and guidelines exist and aim to improve cyber risk management, there are some overlaps, gaps or discrepancies between these requirements. There is significant work being done in the market toward developing harmonization on existing guidelines, including: The US Federal Financial Institution Examination Council (FFIEC) issued several Information Security booklets to prescribe uniform principles, standards and to make recommendations. On 21 June 2013, the Monetary Authority of Singapore issued Technology Risk Management Guidelines (TRMG) to help financial institutions improve oversight of technology risk management and security practices. In June 2003, the Monetary Authority of Hong-Kong issued an additional module of the Supervisory Policy Manual, called “General Principles for Technology Risk Management”. It provides financial institutions with guidance on general principles that they are expected to consider in managing cyber-related risks. The ECB appears to be working toward harmonizing, defining and publishing Guidelines and Best Practices to promote information security in the banking sector. Adapted with modifications from

Dec 2017 - Feb 2018 | 21

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Executive Watch 1

Standard Chartered Appoints Albert Saltson as New CEO Albert Saltson has been appointed the new Chief Executive Officer (CEO) of Standard Chartered Bank Uganda. This follows the transfer of the bank’s former CEO Herman Kasekende to Standard Chartered Zambia. Kasekende was the bank’s first Ugandan boss and had served in this position since July 2012.


he 55 year old Saltson is a Ghanaian national and has been the Bank’s CEO for Gambia since 1st June 2015. Prior to joining Gambia, Saltson was the Bank’s CEO of Sierra Leone where he was influential in driving overall performance in line with business strategy and governance. It is there that he demonstrated exceptional leadership having joined as a management trainee. He boasts of over 25 years’ experience with Standard Chartered Bank – with 20 years in several senior management positions including Executive Director Consumer Banking, Zambia and later Executive Director Consumer Banking in Ghana. He holds a BA (Hons) from Kwame Nkrumah University of Science and Technology, Masters of Business Administration (MBA) in International Banking from the prestigious Henley Management College, United Kingdom, and is an alumnus of Oxford University. Saltson brings hands-on skills in Credit Risk, Valuation, Business Analysis, Operations Management, Program Management, Contract Negotiations, Operations Risk Management, Investment Banking, Retail Management and Trade Finance among others.

Dec 2017 - Feb 2018 | 23

Executive Watch

Dr. Evelyn Kigozi Dr. Evelyn Kigozi Kahiigi has been appointed Chairperson Board of Directors of Finance Trust Bank with effect from 22nd June 2017. She holds a PhD in Computer and System Sciences from Stockholm University, Sweden.


he is currently a Lecturer and Head of Department of Information Technology at the School of Computing and Informatics Technology, Makerere University. Previously, Evelyn worked in the Banking industry at Nile Bank in the Operations and Computer department.

ICT Support, Makerere University where she was part of the pioneering team that set up an ICT infrastructure and Systems. She has extensive experience in corporate governance, enterprise risk management and data science. She is a youth mentor and an advocate for academic and social excellence.

She then moved to the Directorate for

Daniel Ogong Daniel Ogong has been appointed Head of Marketing and Communications, Stanbic Bank Uganda. Daniel joins Stanbic Bank from Nile Breweries where he previously worked for 15 years and served as Marketing Director. Ogong played a pivotal role in building a stable portfolio of brands that saw the company sore to market leadership.


e brings on board a wealth of experience that will reshape Stanbic’s Marketing and Communications strategy to reinforce and sustain the bank’s position as market leader while supporting the delivery of innovative solutions that respond to today’s customer needs.

As Daniel takes on the mantle, his strong leadership will be instrumental to informing Stanbic’s strategic direction in the market and future goals. We wish him all the best in the organisation as it continues on its journey to be the leading provider of financial services in Uganda and Africa as a whole.

Immaculate Ngulumi Immaculate Ngulumi has been appointed Chief Manager, Business Development and Marketing, at Centenary Bank where she has been serving as Brand and Marketing Manager, since September 2013.


24 | Dec 2017 - Feb 2018

rior to this, she worked as a Marketing Manager at Ugachic Poultry Breeders where she built her marketing career for 17 years while serving in other roles as well.

the post graduate diploma. She is also a member of the Professional Marketers Association of Uganda, and an Associate Consultant with Uganda Management Institute.

Immaculate holds an MBA, Marketing from Makerere University. She is a Chartered Marketer No.9179801 from the Chartered Institute of Marketing UK, where she is a member and holds

Her vast experience in marketing communication, strategic planning and digital is and shall continue to be of great advantage to Our Bank.

Executive Watch

Sylvia Mulomi Sylvia is an accomplished HR professional with over 10 years of progressive experience in HR Management. She joins Standard Chartered Bank from Stanbic Bank Uganda, where she was the Senior HR Business Partner for Personal and Business Banking.


ylvia started her career in 2000 as an Executive Assistant at CURE Children’s Hospital of Uganda, and quickly rose up the ladder to be appointed the Human Resources Manager in 2006 in the same Institution. In 2010, Sylvia transitioned to Stanbic Bank Uganda Limited as a HR Business Partner looking after the Eastern Region,

later in 2013, she was promoted to the role of Senior HR Business Partner, PBB. Sylvia holds a Master’s Degree in Public Administration, a Bachelor of Business Administration and a further Bachelor of Bible Studies. She is a member of the Human Resources Managers Association of Uganda and a member of International Accelerated Missions Uganda and Living Water Ministries, Uganda.

Dennis Mugisha Dennis is a result oriented Human Resource Management Specialist with 10 years of progressive experience in HR Management. He joins Bank of Africa Uganda from Century Bottling Company (Coca Cola Beverages Africa), where he was the Country HR Services Manager.


ennis started his career in 2007 as an HR Records Administrator at Stanbic Bank Uganda, and quickly rose up the ladder to Senior HR Administrator in 2008, Junior HR Business Partner in 2011 and HR Manager Business Partnering in 2013 in the same institution. In 2015, Dennis transitioned to Century Bottling Company (Coca Cola Beverages Africa) as an HR Regional Man-

ager Southern Territory, later in 2016, he was promoted to Country HR Services Manager. Dennis holds a Master’s Degree in Management Science, a Post Graduate Diploma in Human Resources Management and further a bachelor of Library and Information science. His a member of the Human Resource Managers Association of Uganda.

Robert Ssendawula Centenary bank has appointed Robert Ssendawula as the Chief Manager Finance and Administration. Prior to his time in Centenary Bank, Ssendawula worked for Motocare Uganda for a year in 2005.


e holds a Bachelors in Statistics and is a continuing student of ACCA. He also retains Certificates in IT Project Management and in Information systems audit (risk based audits). He joined Centenary Bank in 2006. He served

as a banking officer, Auditing Officer and a Finance Manager before being appointed the Chief Manager Finance and Administration. With his academic excellence and work experience, Ssendawula is destined to advance Centenary Bank further.

Dec 2017 - Feb 2018 | 25


Equity Bank Opens Supreme Branch Equity Bank Uganda has opened its 32nd branch across the country; an exclusive banking outlet along Buganda Road dubbed the Supreme Banking. The branch was launched in an exquisite cocktail event attended by selected businessmen and influential fellows of the corporate community.


he branch has a classy lounge with free Wi-Fi internet; customers have personal relationship managers, preferential lending terms and a choice to operate their accounts in the local currency or any of the major global currencies including the US dollar, British pound and euro. They will also enjoy extended banking hours during weekdays as well as weekends. “We currently have 17 branches in Central and greater Kampala, serving over 500,000 customers. The Supreme Branch is going to help us better serve our prior-

26 | Dec 2017 - Feb 2018

ity clients,� explained Equity Bank Executive Director Anthony Kituuka The Equity Bank Supreme Branch also offers customized banking solutions with exclusive privileges and unrivalled personal attention. Customers will also have access to internet and mobile banking, express service at all the branches (through the bulk teller counter), pre-approved overdraft facility to meet emergency financial needs, free incoming EFTs (Electronic Funds Transfer) and incoming RTGS (Real Time Gross Settlement).

The Equity Bank Supreme Branch also offers customized banking solutions with exclusive privileges and unrivalled personal attention.



Resilience is the Key to Success Cynthia Mpanga is the Corporate Affairs, Brand & Marketing Manager, at Standard Chartered Bank Uganda. The mother of three is also the President of the Public Relations Association of Uganda. She spoke to the Bankers Magazine about what makes her tick and below are excerpts of the conversation;

How do you describe yourself?

I am a very simple and happy person who just wants to see some good in the world. I am an idealist, am focused, ambitious, and determined - I go for what I want. My whole life’s story is about resilience; it has been a real hustle moving from one step to the next. I sometimes see people whose life story has been a bed of roses and I wonder how that is even possible. I think that is important for people to face failure and overcome road blocks in life. I see people that envy me and wish they did my job, but they see my glory and do not know my story. What we can do for the younger generation is to be genuine and not be cosmetic, like what people post on social media nowadays. I am also spiritual - you cannot make it in life without God.

Do you come from a family of bankers – what did you want to be when you were seven or eight and how did you get where you are now?

Many of my aunts and uncles on my mother’s side of the family used to work for the Uganda Commercial Bank (UCB); I used to see them go to work but it was not my aspiration. When I was younger I wanted to be an air hostess because from the pictures they always smiled, travelled the world and looked happy and content with what they were doing. I actually applied to be an air hostess with an airline that had offices around Kitgum house before I completed university – but I never got feedback.

are young are not always what you end up doing due to influence from your elders and teachers that help you make rational decisions. I knew that I wanted a good job so I applied to many companies. When I joined Standard Chartered Bank in 2004 in retail banking, I had the opportunity to work on various desks – I did a bit of everything. After one year, there was an opening for the corporate affairs role. There were about nine experienced people that I vied with for the job at a time when I was still studying. Everybody kept discouraging me, people said: “who do you think you are? What makes you think you have a shot at that job?” There were several interviews and each time I had to ask for time off from my boss since I needed someone to cover me. I blocked out all the criticism and I thought, “what I do lose by trying,” so I gave it my best shot. I was a young thin girl and everyone underestimated me. The more people said I couldn’t do it, the more determined I got and the more I wanted to prove them wrong. In one of the interviews, we were asked to write a three and a half year community project that would be implemented by the bank. This required a lot of research, I used to read until 3am every night and be at work by 7am. I didn’t have a car then, so I borrowed my brother’s car. I didn’t have a laptop, or airtime. But there are people who were there for me at time, like Angelo Izama who helped me access the Daily Monitor library to research from there. I believe that if you are going to do something, don’t talk about it, just do it.  

The things you dream about when you Dec 2017 - Feb 2018 | 27



I researched for over a week and put my work on a flash disk but guess what, the work was eaten up by a virus and I lost everything, I was so devastated. I panicked. It was past 7pm but I called up my colleagues in the IT department; one returned from the gym, another had gone home. They came back to office but could not retrieve the data. The deadline was close and I was staring disqualification in the face! One of the IT people got me a computer at the reception and I started to write the project from scratch again at the last minute. I remembered everything in the report since I had done the research myself but I could not get back the design, quality and the photos – so the work was not as good as the first one. I was disappointed and I didn’t think I stood a chance. The deadline was 7am the next morning, so when 28 | Dec 2017 - Feb 2018

I finished and printed, I placed the report under the door of Harriet Musoke, who used to be the head of corporate affairs – I was sure I would not go through. After I handed over the report, I went on leave and made peace with my fate but then I got a call to come into office. I thought there was bad news, but she had an appointment letter in her hand, and I was so happy. I think it was a pretty good idea that I had. You have to believe in yourself and have courage. Just like animals wake up and look for food, that is the same way human beings are, you cannot simply walk around without a strategyyou have to think about life and be ready for whatever comes.

What is the one habit that has helped you succeed in life?

The one thing that has shaped my life is

being straight forward and honest. I decided long ago that my word should stand for something; when I say something, good or bad, I mean it. Sometimes, due to culture, some people can get shocked with honesty but at the end of it all, I either keep quiet or say something as it is. This is important in PR (public relations) because it helps you manage expectations. Somebody’s feelings could get hurt initially but in the long term they will value your words.

What did your parents tell you that has proved useful in your life?

My parents told me different things as I grew up. The most important thing was my father told that even if am a girl I should not look at his wealth or anything he has done, that I can make it on my own. From a young age, I knew that I had nothing and I had to count on myself. He told me not to look left or right but to look


wake up, I take half a liter of water and meditate for at least 30 minutes. I don’t focus on what I am going to do, or strategy but I focus getting my balance, on who I am; self-reflection what I am doing right and wrong. I then make peace with myself that is why it is difficult to find me angry at someone.

In your experience, what is wrong with Uganda’s society? Why are we still so poor? What are we not doing right?

I think that we are so blessed as a country and as a people and we take a lot of things for granted and we have a sense of entitlement. However, no one owes you anything in the world. I keep hearing about families fighting over property of the deceased, but this is due to a false sense of entitlement. We have great weather but we are not able to be as productive as people in the developed countries that face harsher climates. We are just not trying hard enough. We keep punishing children for failing but all successful people have failed several times. If you start failing as an adult the consequences are severe, people should be allowed to try and fail when still young. We have attitude and cultural limitations; we need people to challenge themselves and change the status quo. within me to find strength. My father told me that in life, it is important to compromise and have tolerance.

How do you learn?

I learn both formally and informally. Luckily I work for an organization that values training and development so I am continuously learning. Every morning, I get research reports on what is happening in the entire industry; I also read the newspapers. I manage social media for the bank, so I keep instep with what is trending. I also learn a lot from the people I meet in my daily interactions; everybody is a gold mine. There is something to learn from everyone if you listen; good communication is more about listening and observing than speaking. I learnt about meditation from an Indian Guru. The Guru said it is important to know one self. So every morning when I

What advice would you give your son/daughter on his/her graduation?

My children swim, and play football. The advice I would give them is that every human being has to believe in a power that is greater than them to rationalize things when they hit a wall. Whatever you believe in and your environment; shape your life; if you believe in a spiritual power that is good, then you will do good. If you believe in something wicked, then you will be wicked. I would also advise them to be balanced, live and not simply exist. When you get a job; you want to have a good life and help your parents but along the way the work consumes you and fall into a routine - that is simply existing. It is also important to remain grounded and level headed. Money is important but it is not everything,


Sometimes, due to culture, some people can get shocked with honesty but at the end of it all, I either keep quiet or say something as it is. This is important in PR (public relations) because it helps you manage expectations.

what is most important is that they truly loved and lived for a greater purpose.

Assuming there was one job you could apply for at this stage in your life, what would it be? If there something else I would do, it would still have to be communications related. I would like to help people; luckily I already help people because I handle corporate social responsibility. The job I aspire for is one where I transform the lives of people financially, economically or socially.

When it’s all over, how would you like to be remembered?

I did training under the Federation of Uganda Employers (FUE) Female Futures Program and we had an exercise about ones legacy. For me work is a means to end and not an end in itself, the reason I work is to achieve certain objectives, like to be happy and for my children to be happy. In my legacy, I would like many people to say nice things about me but it would be a shame if my children did not say the same. For me shaping my children and their perception is my number one objective and the key measure of my success. I see a lot of children that are abusive and ill mannered – they must have learnt that from someone. I want to live better children for the world and not a better world for the children. Dec 2017 - Feb 2018 | 29


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NITA-U’s James Saaka (in grey jacket) shares a word with World Bank’s Senior Procurement Specialist. Grace Munanura at the Kampala Serena Hotel.

Banks Embrace Systems Integration with Government

Government is set to integrate Information Technology systems of its ministries, departments and agencies (MDAs) with each other and private sector players like banks and telecommunication companies to improve service delivery and transparency.


his is part of the $75m (about sh269.6b) Regional Communications Infrastructure Program (RCIP) being implemented on behalf of the ministry of information and communications technology by the National Information Technology Authority-Uganda (NITA-U). James Saaka, NITA-U noted at a meeting to discuss systems integration with the private sector at the Kampala Serena Hotel that in the next one and a half years it will be possible for data about Ugandans and projects to be

32 | Dec 2017 - Feb 2018

seamlessly shared across government systems in a rational, secure, efficient and sustainable manner. “Many of the government systems have been working in silos and as a result, many citizens suffer when they go to government departments to access services. Right now, the passport system does not talk to the national ID system; business registration system does not talk to tax,” Saaka said. “Service delivery will be greatly improved

through the sharing of information across Government agencies for fast and effective decision making. This will eliminate wastage of public resources arising from duplication of IT systems and infrastructure,” he added. Saaka pointed out that government systems will also be integrated with private sector players who have a direct benefit government such as utility companies, banks and telecommunication companies. Speaking at the meeting, Ministry of ICT and


National Guidance Permanent Secretary; Vincent Bagiire said that system integration will bring about a unified way of sharing information that will ease business operations in Uganda. He noted that National Databank regulations have been developed and put in place to support IT integration in Government. Grace Munanura, a senior procurement specialist at the World Bank integration of government processes with the private sector with ease data mining, which is currently difficult due to the scarcity of information online. “On the side of procurement, there are complaints over forgeries of certificates and companies. There are also forgeries of bank documents. Hopefully with the system integration, there will be no paper documents to minimize forgeries due to efficient online systems,” she said. Nina Chen, a Huawei Technologies account

members and ease membership registration to increase pension coverage.

“Many of the government systems have been working in silos and as a result, many citizens suffer when they go to government departments to access services,” Saaka said.

He added that integrating systems of the courts will ease payment of benefits of deceased members to their beneficiaries. Eamonn Furniss, the Umeme Chief Information Officer noted that information from the national ID database, company registration details with the Uganda Registration Services Bureau (URSB) and the Uganda Revenue Authority will ease customer registration.

manager urged NITA-U to also integrate information with embassies to ease the issuance of visa’s and work permits for foreign nationals. Richard Byaruguba, the managing director of the National Social Security Fund (NSSF) said that integration of government systems will make it possible to reach out to potential

He added that the information will enable trend analysis and comparisons to catch power thieves and cut the level of power losses which will then feed into a lower power tariff. “We need information from the national ID and URSB to register individual customers and verify the ownership of corporate consumers. We have one million customers today but hopefully next year we will have two million,” he said.

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Barclays Cuts Stake in African Operations Faster than Expected Barclays has brought the curtain down on more than a century of African operations by selling a bigger chunk of its business in the continent than expected, which will boost capital while generating a £1.2bn loss.


iting strong demand from institutional investors, Barclays said it had sold a 33.7 per cent stake in its Johannesburg-listed offshoot, increasing by half the size of the planned share offering it had outlined a few hours earlier.

rica sale was “utterly transformational for Barclays’ capital position, which in turn offers specific opportunities for earnings enhancement, and [at least] underpins our existing expectation for a material step-up in the 2018 dividend”.

The deal will immediately add 27 basis points to its common equity tier one ratio — a key benchmark of banking strength — which was 12.5 per cent in March, below its 13 per cent target and lagged behind some of its main rivals.

After the planned contribution of about 10 per cent of Barclays’ remaining shares to a South African black empowerment scheme, the bank said its stake in its African business would fall from 50 per cent to just below 15 per cent.

The bank could boost its earnings by £200m a year by buying back its US preference shares. It is paying more than 8 per cent interest on those shares without any benefit to its capital position, Gordon said.

The bank is still awaiting approval from regulators to deconsolidate BAGL from its capital calculations, which it said would add a further 46 basis points to its capital.

Selling out of Africa was one of the major decisions by Jes Staley after he became Barclays chief executive 18 months ago. He is seeking to boost the bank’s capital and shrink its geographic presence back to its main US and UK markets.

Barclays said the sale of shares in Barclays Africa Group Limited at R132 per share, raised £2.2bn and would allow it to deconsolidate its African business from its accounts.

Barclays this year agreed to pay about £800m to Barclays Africa as part of a three-year divorce agreement that had to be approved by South African regulators before it could cut its stake below 50 per cent.

Staley told the Financial Times that the Africa sale meant the bank had finished its many years of reshaping its operations. It is preparing to close down the non-core unit it established three years ago to offload £400bn of toxic assets. “We are done restructuring,” said Staley. “What that does to employee morale and in terms of aligning the company’s interests with shareholders’ interests is really significant. This is going to be a seminal change at this bank.” One of Staley’s first moves as chief executive was to introduce a hiring freeze, which helped to cut employee numbers from 142,000 to 82,600 and has only recently been lifted. Analysts are licking their lips at the expected capital uplift from the Africa sale. They expect Barclays will rebuild its dividend, which was cut in half by Staley, or buy back expensive debt. Ian Gordon, analyst at Investec, said the Af34 | Dec 2017 - Feb 2018

That is expected to happen by next year but depends on progress in establishing Barclays Africa as a standalone entity that no longer relies on its former UK parent for technology, branding or other services.

Barclays this year agreed to pay about £800m to Barclays Africa as part of a three-year divorce agreement that had to be approved by South African regulators before it could cut its stake below 50 per cent.

The sale will mean a loss of £1.2bn for Barclays, “as a result of the recycling of currency translation reserve to the income statement” to reflect the weaker South African rand against sterling since it consolidated BAGL in 2005. The loss will be included in its interim results but would not hit its capital, the bank said. South Africa’s Public Investment Corporation, the government pension fund manager, had agreed to buy shares representing 7 per cent of BAGL in the offering on top of its existing 7 per cent stake — making it the second-largest shareholder in the bank. Barclays recently agreed a deal to sell its separate Egyptian business and it is selling its Zimbabwe operation, which also sits outside of BAGL.


Agent Banking comes to Uganda...pg42

Corporate news

Uber, Stanbic Bank Partner to Provide Corporate Rides Uber and Stanbic Bank have announced a partnership that will promote a corporate credit card offered to businesses by Stanbic bank. This partnership makes it possible for corporates in Kampala who have access to credit cards - a common method of payment for Uber for Business to set up accounts and get a transport alternative for employees through Uber.


usinesses will need to open a corporate account with Stanbic Bank and link the account to a corporate credit card. Uber for Business (U4B) enables employees to request for a ride with Uber and expense their trips directly to their company. All trips are charged on the corporate card and organizations have the option to billed monthly for the service. Aaron Tindiseega, Uber’s Country Manager in Uganda said the partnership, is a one

of a kind partnership that the technology company has signed with Stanbic Bank in the sub-Saharan region.   “Uber is focused on providing a safe, reliable and affordable alternative for moving from point A to B in Kampala. We are proud of this partnership which will enable businesses to move their employees across the city. We are excited that through the Stanbic corporate card, businesses in Kampala will have easier access to Uber in just a few taps - no need

to worry about the collection of manual receipts from employee trips, businesses will be billed monthly on the corporate card,” said Tindiseega. Stanbic Bank will be solving a problem that many companies in Kampala have faced - not having access to credit through a corporate card. The partnership will Uber will also provide a safe, reliable and affordable transport alternative for companies in Kampala through Uber for business. U4B provides a transparent and Dec 2017 - Feb 2018 | 35

Corporate news cost effective business travel alternative through a corporate credit card. It also enables company administrators to use Uber to service their various business needs such as employee travel, customer support, and regular commute- all from the same dashboard. “We are happy to be providing access to credit through a corporate card to companies in Uganda complete with a comprehensive reconciliation. Stanbic has also enrolled 1,200 employees onto the Uber for Business platform and we are pleased to confirm that the service has been very reliable.” said Fiona Mulema, Head Retail Banking at Stanbic bank Uganda. Barnabas Ntakirutimaana from Moringa 360 one of the companies that have signed up and used the service shared his experience. “It’s been easy and hustle free for our staff to use Uber for Business. What we like the most about it, is the convenience it offers us - we do not have to spend a lot of time reconciling receipts from employee trips. We also like that Uber is safe and reliable, this means that our staff can always request a safe, reliable and affordable ride, through Uber, when they are working late.” Ntakirutimaana confirmed. Stanbic bank customers in Kampala can sign up for the corporate credit card and get U4B support by visiting the Uber for Business information desks available at Stanbic bank branches in Garden city, Forest Mall, Bugolobi, Kabalagala and Acacia more information can also be obtained through the Stanbic 24/7 Customer care centre toll free number: 0800150150/0800250250 The partnership comes as both Uber and Stanbic Bank celebrate recent growth milestones. In June 2016 Uber launched in Kampala and has been providing rides at the touch of a button for passengers and also thousands of economic opportunities for drivers-partners who want to use the app to grow their small businesses. To date, Stanbic Bank is the leading Visa card issuer and has digitized most of its solutions for the convenience of the customer.

KCB Trains Jinja Entrepreneurs in Business Management KCB Bank Uganda took its annual entrepreneurs training to Jinja as it seeks to enhance financial literacy and entrepreneurship skills among the micro, small and medium enterprises (MSMEs) in the country.


ver 35 entrepreneurs and business managers attended the training organized in partnership with Uganda Small Scale Industries Association (USSIA). According to Emmanuel Njuki the Brand and Communications Manager, KCB Bank Uganda, over 2.5 million people are employed in this sector, where they account for approximately 90% of the entire private sector, generating over 80% of manufactured output. “This sector is the driver of our economy, hence the need to empower and educate them on how to keep books of record and manage their businesses.” The trainings which have been conducted across the country are focused on business management, financial skills, budgeting and banking services to MSMEs to help them expand their businesses and improve their capital worth. Mwambi Moses, who operates a school in Jinja was one of the beneficiaries. Mr, Mwambi says that he hoped to learn more about business management issues in running his school.

“One of the biggest challenges I have is tuition pricing, I have learnt that I should consult with the various stakeholders that is, the teachers, the school management and members of the PTA so that we have a discussion on the tuition,” says Mwambi. “I have also learnt how we as a school can improve our animal husbandry program.” Mutema Olive Nakatte, also one of the beneficiaries noted that she had been making mistakes in costing “I will apply the four P’s, costing and marketing so that my business can make more profits to sustain my family. David Mulya, a business management and financial literacy trainer, says that failure of small businesses to keep books of record is a common challenge among small and micro business that often leads up to mismanagement. “With no books of accounts, these businesses can neither get loans from financial institutions nor sustain or expand their business,” Says Mulya. “We hope that the training will be a valued investment to their businesses and they will practice what they have learnt.

Beneficiaries of the training pose for a group photo with KCB’s Emmanuel Njuki. 36 | Dec 2017 - Feb 2018

Corporate news

Technology to Reduce Cost of Credit Although there is overwhelming demand for loans, commercial banks are reluctant to lend to businesses and this has constrained growth of the economy, Bank of Uganda Governor – Prof Emmanuel Tumusiime Mutebile has said.


peaking at the inaugural annual banker’s conference at the Serena Hotel in Kampala, Mutebile noted that credit to businesses has slowed down since 2011 and there was virtually no growth in the last two years when inflation is considered. “It is clear that after the buildup in nonperforming loans and decline in value of collateral banks have become wary of extending loans. The challenge is for banks to their reduce lending rates without compromising customers access to services,” Prof. Mutebile said. “Bringing down lending rates will involve a major shift toward electronic banking technologies, unfortunately that will mean less employment for human beings. “Banks must also ensure that both their systems and customers are protected from cyber-attacks,” the Governor explained warning government against enacting a Kenyan style interest rate cap which could limit banking services to a few elite and plunge banks into losses if introduced.

Latest Bank of Uganda reports indicate that lending rates on shilling denominated loans declined to 20.5% in April down 25.2%. Despite this reduction in lending rates, growth in loans to the businesses declined to 3.4% in April 2017 which was lower than 4.0% in January. Banks lent more to agriculture, trade, and personal loans but reduced the amount of money lent for manufacturing; building and services in the three months to April 2017. Vice President Edward Ssekandi urged the banks to align their strategies with governments Vision 2040 master plan and the second National Development Plan (NDP) which aim at ushering Ugandans into middle income status by 2020.

Panelists at the inaugural annual banker’s conference. “Banks should increase lending to the agricultural sector which employs the majority of Ugandans. There is also need to ensure that more Ugandans are reached by banking services,” Ssekandi said. Professor Njuguna Ndung’u, the immediate former Governor of the Central Bank of Kenya, who was the keynote speaker, urged governments to protect citizens from inflation and high interest rates by paying suppliers on time and storing sufficient food for dry seasons. “Nearly every year there is a drought which pushes up food and energy prices and this feeds into inflation. The ministries of energy and agriculture should create buffers against this annual occurrence to support the banking system. Also, Government should pay suppliers on time,” the former

Governor said to applause. During a panel discussion, Yaron Farachi, the country manager for GILAT telecom noted that price of internet has declined by over 96% over the last eight years. He noted that these savings will be transmitted into lower charges if banks adopt branchless electronic based banking strategies. Maria Kiwanuka, the former finance minister urged banks to list on the Uganda Securities Exchange (USE) to get low cost funds which they can then lend at lower interest. Mark Malan, a director at Compuscan Uganda hailed the government for integrating the information technology systems of ministries, departments and agencies. He urged the government to create a registry for collateral. Dec 2017 - Feb 2018 | 37

Corporate news

Bank of Uganda director for financial stability, Dr. Charles Abuka, cuts the tape to launch the new product. Looking on is CBA Uganda managing Director, Samuel Odeke (R) and the Minster for Justice and Constitutional Affairs, Hon. Kahinda Otafire (C).

CBA Uganda Launches Private Banking

Charles Odere, a lawyer cum businessman spends most of his time on the airplane, crossing time zones to close large real estate deals. He says that top of his requirements when opening a bank account is convenience.


t is important for me to be able to transact with the bank anywhere and anytime even on the weekend,” CBA Uganda’s best customer said at the launch of CBA Uganda’s private banking product. “I like that I can process up to four facilities in one month between CBA Uganda and CBA Kenya. I know everyone from the managing director to the lady that guards the branch in Uganda by name and that is very important for me,” he added.  Dorothy Nyakana, the CBA Uganda private banking manager noted at the Twed towers launch that the private banking product targets high net worth individuals like Odere. She said that customers will enjoy a customized, round the clock service to enable them spend more time on their business and other aspects of their life.  Don Twine, the CBA Uganda head of

38 | Dec 2017 - Feb 2018

business management pointed out at the product launch that the bank will attached dedicated relationship managers to around 500 senior executives, government officials, heads of organizations and leaders in all sectors – who are the target market for the product. Samuel Odeke, the CBA Uganda managing director noted that the launch of the private banking product is a significant milestone since the bank was launched in 2014. “Our vision is to become the most innovative bank in Uganda. Our ears are always on the ground to listen and respond to client needs,” he said. Odeke noted that CBA’s MoCash micro savings and loan service is flourishing with over 2.2 million clients – the highest number of clients for any bank in Uganda. He also noted that CBA’s recent acquisi-

tion of Crane bank Rwanda will make it more convenient for customers to transact through the bank. Dr. Charles Abuka, the Bank of Uganda director for financial stability, commended CBA for launching the private banking product on behalf of Justine Bagyenda, the Bank of Uganda executive director for supervision. She also applauded the bank for the MoCash micro saving and loan product, a joint venture with mobile money service provider MTN. She noted that the product is line with the national financial inclusion strategy.  Bagyenda said: “We need to ensure that our people can easily save through mobile money and support small and medium companies through innovative financial products that foster customer retention, and deposit acquisition.”

Corporate news

Standard Chartered Bank Uganda Re-launches the Priority Banking Standard Chartered Bank has re-launched its Priority Banking Customer Value Proposition (CVP). Priority Banking is the banks Premium Banking client segment that focuses on providing banking solutions to the affluent clients. It was initially launched it in 2010.


s a Priority Client, one gets the Standard Chartered Visa Infinite Debit Card. With this card, they get complementary access to over 800 airport lounges worldwide, multi-travel Insurance cover and extended warranty on purchased items. The client also have access to 24-hour concierge services that provide them with a personal assistant who can be reached digitally or by phone, get Hilton Gold membership, access to the Visa Luxury Hotel Collection (VLHC) of over 900 hotels, YQ - Airport meet and assist service, 35% discount on AVIS, and 7% discount on when booking global hotels. In Priority Banking, the affluent clients have much bigger and more complex needs compared to the other client segments.

to acquire more property. Standard Chartered is uniquely positioned to cater to the diverse needs of the affluent clients, both locally & globally. The Head of Retail Banking, where Priority Banking is segmented, Israel Arinaitwe spoke about how Standard Chartered Bank is a recognised leader in growing and protecting clients’ wealth.

Israel Arinaitwe, Head of Retail Banking Standard Chartered. These clients are looking to invest more and grow their wealth as well as looking

“We provide a comprehensive unbiased range of Wealth Solutions locally and globally to meet these needs. We are also uniquely positioned to provide financing Solutions to our clients in both Local currency and foreign currency with the highest loan limits available for an individual in the market.

Tropical Banks Ready for Islamic Banking


ropical bank chairman Gerald Sendaula has urged the Bank of Uganda to hasten the passing of regulations for banking according to Islamic principles. He noted that Islamic banking and agent banking will widen access to banking for Ugandans. The bank also said farewell to long serving staff Haji Juma Lubega Kagolo, formerly Executive Director and Idris Elhalafi, formerly deputy general manager. They were both handed presents by bank managing director, Kreshi Sameh Mahmud who said: “Although Islamic banking comes as an interest free service, and as a shared risk between the bank and customer, there still remains the need for awareness due to misconceptions.”

Tropical Bank MD, Kreshi Sameh Mahmud hands over trophies to Idris Elhalafi and Haji Juma Lubega Kagolo. Dec 2017 - Feb 2018 | 39

Corporate news

UBA inks Deal with Mastercard United Bank for Africa (UBA) has announced the rollout of the Debit Mastercard card in Uganda in support of financially empowering all citizens.


ocused on displacing cash, the electronic payment solution will deliver a quick, convenient and secure payment alternative for all citizens – instantly. According to Jackie Tumuhairwe, the UBA head marketing and corporate communications, the introduction of the debit solution is in support of the Bank of Uganda’s Strategic Plan, which outlines initiatives that will help improve financial inclusion in the country with focus on innovation, reducing the gaps in financial education and the importance of protecting consumers. “As a group, we are committed to driving financial inclusion and empowering businesses across Africa, and our partnership with Mastercard enables us to deploy safe electronic solutions to the benefit of the entire country,” said Dr. Yinka Adedeji, UBA’s Group Head, Digital Banking. Johnson Agoreyo, the Managing Director/ CEO, UBA Uganda said: “The introduction of the UBA Debit Mastercard into the market will enable our customers to carry out their

UBA staff a the agreement signing with Mastercard. banking transactions in a safer, more convenient and more reliable manner. Our customers’ needs are changing and as they change, we will continue to adopt smart technology solutions that deliver superior services.” Christian Bwakira, Vice President and Area Business Head for East Africa, Mastercard said: “In order to drive fi-

nancial inclusion we need to ensure all Africans feel confident that their money is secure. The UBA Debit Mastercard introduces the latest global payment standards with EMV Chip and PIN technology embedded into the card making it difficult for fraudsters to duplicate your information.”

Centenary Bank inks Deal with MasterCard


s part of their multipronged approach to digitising Uganda’s economy in support of the National Financial Inclusion Strategy, Centenary Bank and Mastercard have announced a partnership to roll out a series of digital banking products. Following the recent signing of a strategic partnership agreement focused on boosting financial inclusion in the East African market, the two partners today further strengthened their partnership by signing a Commercial Banking Agreement (CBA) which will see the rollout of a broad suite of digital payment solutions. This partnership will help strengthen the

40 | Dec 2017 - Feb 2018

National Payment Ecosystem through the introduction of relevant payment solutions including Masterpass QR, payment card solutions including debit, prepaid, and credit as well as premium solutions. “In June, Finance Minister Matia Kasaija delivered the 2017/18 budget speech which reemphasised the importance of the National Financial Inclusion Strategy. The ground breaking strategy seeks to address five major drivers of financial inclusion: accessibility of financial services, credit infrastructure, and digitisation of financial services, appropriate and innovative financial products and consumer financial protection,” said Fabian Kasi, Managing Director Centenary Bank.

According to the 2016 Financial Inclusion Insights Survey, only 11 out of every 100 adults in Uganda have access to a bank account. However, 53 percent of adults are using mobile payment solutions to transact. “The partnership is part of the Mastercard commitment to financially empower 100 million people in Africa by 2020,” said Chris Bwakira, Vice President and Area Business Head for East Africa, Mastercard. “We have made significant strides this year in Uganda, with our recent agreement with the Uganda Bankers’ Association and the work we are doing through the Mastercard Labs for Financial Inclusion.”

Corporate news

AfDB and OpenOil Launch Report on How African Governments Manage Extractive Resources

The African Development Bank (AfDB) and OpenOil, a Berlin-based financial analysis firm, have jointly produced a report on how African governments use financial models to manage oil & gas and mining projects. The report was launched at the 13th Annual General Meeting of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) in Geneva, Switzerland.


ver 150 experts and representatives of international development institutions, governments, civil society and extractives companies attended the launch. These included the World Bank, United Nations Environment Programme (UNEP), United Nations Development Programme (UNDP), United Nations Conference on Trade and Development (UNCTAD), Organisation for Economic Co-operation and Development (OECD). Mining companies and miners’ associations such as Newmont Mining Corporation, AngloGold Ashanti, Anglo American and International Council on Mining and Metals (ICMM) also attended. The joint report was presented by Pietro Toigo of the AfDB’s African Natural Resources Center and Olumide Abimbola from OpenOil. “This report is the first of its kind in Africa and we hope that it will stir debate within the continent’s mining sector and contribute to countries getting more out of their mining projects,” they told the participants. The report, Running the Numbers: How African Governments Model Extractive Projects, analyses the capacity of 19 African resource-rich countries to use financial models, which simulate a simplified version of a real-world project in order to determine their financial benefits to the countries. AfDB and OpenOil conducted a survey of nearly 50 government officials to illustrate not only how widespread use of financial models is, but also how their results are utilised to inform policy. “Financial models are essential through-

(L-R) Matthew Bliss, Deputy Director, IGF Secretariat_ Greg Radford, Director, IGF Secretariat_ Scott Vaughan, President of IISD_ Glenn Gemerts, IGF Executive Committee Chair_ and Isabelle Durant, Deputy Secretary-Genera out the life-cycle of extractive projects,” said Johnny West, Director of OpenOil. “They are not just important during the development of the fiscal regime, but also for the negotiation of fiscal terms with companies, for revenue forecasting, and for auditing and tax-gap analysis.” “This report not only stresses the need for African Governments to make efforts to close the information gap with extractive companies, but also shows where there are capacity gaps and how those gaps could be addressed,” Traore said, urging development partners to invest more in capacity building. Also, there is a substantial gap in access to data that are key inputs for financial models in African countries, with the largest gaps in assessing information on capital costs and operating costs of projects. In addition to the need to build in-house financial modelling capacity, the report suggests that governments need to improve internal business processes and ad-

dress the large gap that the report shows exist between information available to different agencies, departments and ministries. “This study forms a crucial part of the Center’s support to African countries in realising the full potential of their natural resources”, Traore said. “How are countries supposed to enter into negotiations with extraction companies that use financial models if the governments of such countries are not in possession of the latest and best models to calculate what a potential project is worth?” Toigo asked. The report also encourages development partners to make capacity building in financial modeling a more significant part of their support to the management of extractive resources. Partners doing so already were encouraged to not just supply financial models as part of isolated technical assistance, but to also invest in equipping government officials with skills to create and use models.

Dec 2017 - Feb 2018 | 41

Agent banking INTERVIEW

Agent Banking Comes to Uganda Agent Banking regulations have been finalized, and are currently being gazetted by the First Parliamentary Counsel (FPC). Although Agent banking is new in Uganda, other East African countries have had the service for much longer. Agent banking was introduced in Kenya in the year 2010 and has delivered significant gains to Kenya’s economy. In the firstquarter of 2016, there were 10.3million agent transactions worth Ksh176.7b (about Ush6.1 trillion). Wilbrod Humphreys Owor, Executive Director of the Uganda Bankers’ Association spoke to The Bankers Journal about how agent banking will revolutionize the Ugandan economy. Below are excerpts;

What is Agent banking and why is it important to Ugandans and the financial system?

Agent banking is the provision of a set of banking services through an agent who is more localized and closer to the target market such as sole traders, pharmacy’s, mobile money agents, supermarkets, petrol stations, wholesalers or shop keepers, as opposed to accessing banking services through a bank branch. There is an agent-principal relationship where the agent works on behalf of a bank. This is meant to expand access to financial services, especially in hard to reach places around the c o u n t r y. It will

also bring Ugandans in the informal sector into the formal financial system. Once this happens, more people will be able to enjoy the security that comes with the formal financial system; and monetary policy will be more effective.

How will agency banking be rolled out and what role is the Uganda Bankers Association going to play?

Right now we are at the official gazetting stage; we are at the tail end and are very much ready to go. Banks will select who they want to be their agent in an area. Once a bank has finished profiling a prospective agent, the bank will then forward their application to the Bank of Uganda for approval.   On the role of the Uganda Bankers Association; we are an umbrella body that represents all banks, so we are playing a facilitation role. We have provided a framework for a shared platform, instead of every individual bank investing in its own agency banking platform. We now have a shared platform where every member bank can plugin. Agents are not supposed to be exclusive and they can serve any bank.  This comes with the advantages that banks will save what they could have spent in rolling out an individual agent banking system. It is also easier to have uniform policies, branding, pricing and benefits. When we do training, it can be done at once for all banks. It will also be easy to upgrade the software.  Of the 23 commercial banks that are members of UBA, 22 have expressed interest actively taking up agent banking. 

What requirements will banks have for agents?

Typically, the law requires that an agent has a running business. Since this is a cash intensive business, we do not want this to be the only busi-

42 | Dec 2017 - Feb 2018

INTERVIEW Agent banking

ness of the agent. The agent must have physical premises in a secure environment, must be a licensed business, we will look at the agent’s business turn over, and some references. Since this is a highly regulated industry, street people with an umbrella will not qualify to become bank agents because the requirements are strict.

What services will bank agents make available that mobile money agents currently do not provide?

Bank agents will offer range of services such as deposits into bank accounts, withdrawals, balance enquiry, and loans. But I think the biggest contribution that bank agents will have is to bring on board people that do not have bank accounts. We will eventually have remote account opening and self-registration where you apply with an app, your information goes to the bank and you submit hard copies to an agent. The agent will in turn scan the documents and forward them to the bank which then opens an account for you and notifies you to let you know that the account is ready to transact. Once somebody opens an account they will have the opportunity to enjoy a whole range of services including advisory services.

Do you think that agent banking will overtake mobile money or will the two co-exist?

I think that mobile money and agent banking are complimentary because right now it is possible to transfer money from your bank account and withdraw it from a mobile money agent. There is already a lot of interpolability. Our objective is to extend financial services to hard to reach places and I think that they will work hand in hand.

What is the likely impact of agent banking on the economy?

Very Huge! First of all the points of service for banks are going to increase by the thousands in a very short time. Secondly, millions of Ugandans will be able to open accounts and access formal financial services. Beyond that, there will be new jobs created through those new thousands of agents.

Agents will start by offering a few services and then we will gradually upscale as we go along. I think that the benefit of banks coming together to offer agent banking services will create significant savings which can then be passed on to customers through reduced fees and lending rates as well as lower charges for transactions in the long term. There will also be jobs created by support services such as those who will train the agents, inspectors for risk management and control, branding, technology providers - the business of lending will also grow exponentially. The multiplier effect of the jobs and the lending on the economy will be huge and will make significant impact on the economy. We are targeting up to 21 million new bank accounts up from the current 5 mil-

lion. What is going to be critical is a lot of awareness, a strong control framework and financial literacy; technology and agents alone are not enough. We also want to make sure that people have a good experience, the first time that they engage with the service.

How will Ugandans be protected from robbery and fraud?

There will be a combination of things to protect customers. The starting point will be selection of agents; there will be high standards on who qualifies so that there is a fallback position in case of fraud. The agents will receive a lot of training in safety standards, processes and security, reference points and complaint handling. There will be call centers to provide assistance in case a customer encounters any problem while using the service. There will be a lot of education for the customers on how to protect their information. Agents will start by offering a few services and then we will gradually upscale as we go along. I think that the benefit of banks coming together to offer agent banking services will create significant savings which can then be passed on to customers through reduced fees and lending rates as well as lower charges for transactions in the long term.

Dec 2017 - Feb 2018 | 43

Agent banking

BoU Urged on Flexible Agent Banking Regulation A major milestone has been achieved in the financial sector with the imminent release of agent banking regulations, however, lawyers and banking experts have urged Bank of Uganda to be flexible and responsive in the early days of the new phenomenon.


gent banking has been tipped to create numerous jobs and bring formal financial services closer to Ugandans as it has done in Kenya. Since agent banking guidelines were enacted in Kenya in 2010, banks next door have received over $9b (about sh32.3 trillion) in deposits through agents according to Michael Owuor, a Central Bank of Kenya official. The same progress is envisaged in Uganda, however, using a different model. Unlike the Kenyan model, bank agents will not be tied to one bank, but will serve all banks in Uganda. Agent commissions will then vary by bank.  

Speaking at the inaugural Stanbic bank Agency Banking Conference for legal practitioners and potential agents at the Kampala Serena Hotel yesterday, Wilbrod Humphreys Owor, the Executive Director, Uganda Bankers’ Association (UBA) noted that a profit sharing mechanism has been agreed for the shared agent banking platform. He noted that agents will be linked to the closest bank branches to access cash float and that an initial target of 15,000 agents has been set for the first 3 years. Owor revealed the existence of proposals for banks to tap into National ID data to quicken account opening. While quoting findings of a recent Finscope survey, Shem Kakembo, the Stanbic bank head of Customer Channels said that Ugandan mobile money agents are the most profitable in East Africa, making $5 (about sh17,935) profit every day. He said agent banking is likely to create even higher profit and spur jobs for numerous university graduates. Gertrude Karugaba, Partner, Sebalu & Lule Advocates, noted that while a requirement for agents to have a commendable 44 | Dec 2017 - Feb 2018

David Cracknell, MicroSave’s Director for Africa noted that although agent banking will expand access to financial services, development of the product must be responsive as it is a market-first. “There is very little precedence for an agency banking model where agents are shared; we need regulations that are responsive to create a unique system for Ugandans by Ugandans,” Cracknell said.

Justine Bagyenda, the Bank of Uganda executive director for supervision said that the Central Bank barred bank agents from being exclusive due to the challenges created by the exclusivity of mobile money agents.

track record in a separate business, this is a limits specialization. “It is vital that an agent has a good track record in another business. However, draft regulations say that the agency banking agreement terminates the moment the agent’s underlying business ends. The regulatory framework should enable someone to specialize in agent banking,” Karugaba said.  

He urged the Central Bank not to overwhelm Ugandans; especially in the rural areas, with requirements to access the new formal banking channel since Uganda is a country that thrives in informality. “The moment you require a lot of formality, you put the brakes on the system,” Cracknell warned.  Speaking on behalf of Prof. Emmanuel Mutebile, the Governor Bank of Uganda; Justine Bagyenda, the Bank of Uganda executive director for supervision said that the Central Bank barred bank agents from being exclusive due to the challenges created by the exclusivity of mobile money agents. “Financial institutions must have complaints handling systems to quickly resolve client issues. Competition on products and services amongst banks will encourage development in agent banking. As we move towards Agency Banking we need product drivers and volume drivers to be able to break even,” the Governor said. He noted that prospective agents must have run the business for a year and that agents are barred from the business of forex.  Francis Gimara, president of the Uganda Law Society said that the society is engaging the Uganda Bankers Association in a bid to craft to design a good mediation mechanism.


The Crane Bank Juggernaut Rolls on…Where Does it End? Along the way, there have been several bank closures. Teefe bank, Greenland Bank, National Bank of Commerce, Global Trust Bank and most recently, Crane Bank, however, the latest closure has opened Pandora’s Box.


f the forensic report of PricewaterhouseCoopers (PWC) on Crane Bank is anything to go by, Uganda’s bankers can comfortably live on the edge for a very long time. The report noted that in addition to over sh400b that was swindled out of Crane Bank, top management also wrote off more than 180 loans and advances worth at least sh101b under unclear circumstances between 2005 and 2016. The report points out that most of the loans were written off in 2013, a year before former managing director A.R. Kalan fled the company. The report indicates that Megabells Electronics, Infinity Investments, and Ssebagala & Sons Electro Centre were repeatedly loaned money even when it was clear to the bank that they would not repay – something that has baffled most commentators. In the end, Megabells Electronics got away with loans worth sh21b, Infinity Investments (sh20b) and Ssebagala & Sons Electro Centre (sh8b).

Infinity Investments had barely made two months after incorporation before it received colossal sums of money. The company had no registered permanent office, and was not registered for tax and had not filed any annual returns until 2014. In addition to this mess, Crane Bank also suspiciously advanced more than sh244b in separate loan amounts to companies owned by six tycoons, a preliminary forensic audit report conducted by PricewaterhouseCoopers shows. The report names the six individuals as Amina Hersi Moghe, John Bosco Muwonge, Kampala land tycoons Ali Mohammed and Yoosuf Mohamed, others included Leonard Bob Kanaabi and Innocent Mutabaruka. Two of Ms Moghe’s companies; Minutan and Aureco were loaned money after only a couple of days after incorporation before they applied for the loans and disbursements made.

Dec 2017 - Feb 2018 | 45

Opinion Minutan Ltd received funds after six days of incorporation while Aureco waited longer, and had been in existence for only eight days, nearly a week, before it got money. PWC wrote in the report that Moghe could have been a front for a number of companies that benefited or relied on her letters of guarantee to be advanced loans with a questionable final destination. At least 18 of the 22 companies investigated, the report indicates, had their trading accounts permanently in debit resulting from long outstanding overdraft facilities, which, although they were short term, were repeatedly renewed with no clear explanation.

NBC lurking around While courts are yet to pronounce a verdict, Amos Nzeyi, a shareholder of the defunct bank lodged a case against the Bank of Uganda for what he says was a “fraudulent sale of National Bank of Commerce to Sudhir Ruparelia.” Nzeyi says the closure of NBC caused him both financial and reputational loss since NBC was closed just as it had refurbished its new headquarters on Yusuf Lule Road, re-capitalized to the tune of sh7b and ac-

46 | Dec 2017 - Feb 2018

intimidate, humiliate and blackmail him.

In addition to this mess, Crane Bank also suspiciously advanced more than sh244b in separate loan amounts to companies owned by six tycoons,

quired several automated teller machines and expensive banking software to meet the required minimum standards as directed by Bank of Uganda.

I did nothing wrong – Sudhir He also wants court to order Ruparelia to disclose the whereabouts of a one A.R. Kalan, the former managing director of his Crane Bank who went on a supposed extended leave of absence. In his defense, Crane Banks major shareholder Sudhir Ruparelia denied responsibility for the collapse of the bank, dismissing the suit against him as a ploy to

He noted that prior to the filing of the suit against him by Bank of Uganda, and before serving him the summons about the case, the central bank’s lawyers had written to him setting out the terms on which the case could be settled only to turn around and stab him in the back. He also denied accusations that he did not remit his employees’ statutory contributions amounting to sh52b to the National Social Security Fund (NSSF). In addition, he said that between 2015 and 2016, then Crane Bank had to make additional provisions for the bad loans due to the struggling economy which ate up company profits. Sudhir also blamed the bank’s distress on a number of customers trading in the volatile South Sudan, and the in oil and gas sector in Uganda, whose business failed and even sought bailout from government. Court has instructed the parties to go through a mandatory mediation process. Regardless of where things go from there, one thing is clear; none of the parties will walk away from this debacle with their reputation intact.


Vibrant Private Sector to Unleash Africa’s Potential – Shabangu Africa’s potential is undeniable; for starters, the continent has the largest mineral industries in the world and is the world’s second fastest growing continent, economically, according to the African Development Bank.



he continent leads the world in mobile adoption, which continues to offer the biggest cross-sectoral economic opportunities according to the World Economic Forum (WEF). Despite these glowing statistics however, are some challenges.

Shabangu says that discussions at the recent World Economic Forum Africa Summit in Durban, South Africa clearly show that private sector intervention is needed to steer the continent to a more prosperous future.

“Missing across much of sub-Saharan Africa are the roads, rails, ports, airports, power grids and IT backbone needed to lift African economies,” Tarek Sultan Al Essa, Chief Executive Officer and Vice-Chairman, Board of Agility, Kuwait said during a World Economic Forum on Africa discussion. “This lack of infrastructure hinders the growth of imports, exports, and regional business. Companies that can connect Africans and markets can prosper,” he added. Sthe Shabangu, the lead, Public Relations, Public Affairs and Corporate Citizenship, Samsung Africa Office says it’s easy to be proud of all that we are achieving as a continent in the wake of Africa month, but there is need to be reminded that more needs to be done to unleash the continents full potential.

“It is in the private sector that the resources to invest in people and product development exist. As Samsung has discovered first hand, each investment, whether in education or health care or perhaps even both, has the potential to transform hundreds of lives at a time,” she says.

Sthembile-Shabangu The Africa Outlook Report shows that at least half the population resides more than 25km from the nearest fibre connection. Shabangu notes that it’s clear that while we may be celebrating the growth of connectivity in cities, last-mile connectivity is still a major stumbling block

“There’s little doubt that our vibrant continent is making great strides towards a bright future, with our economy expected to grow by 3.4% in 2017 and 4.3% in 2018, according to research in the African Outlook Report,

She says that education is not the only challenge that requires our urgent attention. Equally troubling and of no less importance is the healthcare sector. With serious diseases like Ebola, malaria, cholera, meningitis and HIV/AIDS still threatening a great number of African lives, we have our work cut out for us.

“But the 110 million children in Africa who, according to the Internet for Education in Africa report, have never seen the inside of a classroom would likely tell us that it’s not enough - and they would be right,” Shabangu says.

“In fact, Brand South Africa reports that while Africa shoulders one quarter of the global disease burden, it is home to just 2% of the world’s doctors,

She notes that children across Africa’s rural communities are being left behind - and with more than 70% of the continent’s population living in rural areas, this is a major problem.

“Despite the serious situation, Africa’s health care systems still lack the capacity to research, produce and deploy the health care solutions we so desperately need,” Shabangu explains.

She notes that Samsung’s social interventions such as the solar powered ‘Internet Schools’ which are equipped with interactive whiteboards, Samsung Galaxy Note PCs and printers, and Tele-Medical Centers which provide a variety of eye, ear, blood, dental and pre- and post-natal screening and treatments have had a real impact in improving livelihoods. “Through innovations like these, we believe it’s possible to start changing the status quo. It’s true that we still have a great deal of work to do if we want to see our incredible continent continue on its path of transformation, but I firmly believe that the key to our success lies in the power of innovation,” Shabangu says. “The drive to serve as a catalyst for transformation across the continent is in our DNA. And just as it’s been our mandate to inspire innovation in Africa, so Africa has inspired us. When it comes to innovation, the limits to what we as a dynamic and developing continent can achieve are few. We have only to look to ourselves,” she adds.

Private sector intervention Dec 2017 - Feb 2018 | 47

Public Private Partnership

Strong PPP Regulation to Save Shs1 trillion Annually Government could save up to $300m (about Shs1 trillion) annually if were to create a strong legal and regulatory framework to oversee Public Private Partnerships (PPP) for its projects.


lthough the PPP Act was approved in 2015, a lack of relevant institutions, human resources and welllaid out processes and methodologies to implement the framework have slowed down the implementation of the law.

Speaking at the launch of the 9th World Bank Uganda Economic Update, Moses Kibirige, the acting World Bank country manager noted that Uganda’s economic growth is projected to recover from an estimated 3.8% in the previous financial year 2016/17 to 5.2% in the current financial year and 6% in the subsequent financial year if government can improve the way it handles projects.   “Infrastructure needs in Uganda are estimated to consume a sustained investment of $1.4b (about sh5 trillion) per year in the medium term, all this cannot be funded by the government alone,

“Some major infrastructure projects require private participation not only through financial resources but also through the efficiency norms of the private sector,” Kibirige pointed out at the finance ministry boardroom. “It is estimated that Uganda has lost about $300m (about sh1 trillion) per annum in inefficient public infrastructure spending mostly through underpricing and inability to complete projects within planned costs and on schedule,” he added.  Kibirige warned that in order for government to exploit the private sector efficiency requisite regulatory and legal frameworks must be in place and effectively implemented.  In her presentation, Rachel Sebudde, a World Bank senior economist noted that the absence of proper oversight for PPPs has resulted in loss for key projects such as the Bujjagali hy-

dro electric power project with a relatively high project cost of $3.6m per MW. Due to the structure of the Bujjagali power dam project, its tariff is set to hit 0.147 per Kwh at the start of August 2017 and $0.159 per Kwh in 2023 up from 0.106kwh currently.  She also noted that road tolls have bad record in Uganda after they were last used on the Kampala -Masaka road more than 20 years ago. She pointed out that consumers willings to only pay sh70 per km is too low to service contractual obligations.  Sebudde noted that a PPP registry should be created to improve transparency and accountability. She also noted that in order for PPPs to be successful, agreements should explain the types of assets involved, responsibilities of the private partners, payment mechanisms, and financing mechanisms.

Equity mobile lending hits Sh2 trillion


quity Bank  has so far issued loans worth KSh57b (about Ush2 trillion) through its platform Equitel launched in May 2014, highlighting Kenya’s growing uptake of mobile lending according to a report by business daily. Kenya’s biggest bank by customer numbers said it processed a total of 7.5 million loan requests, with eight out of every 10 loan demands currently being processed and disbursed via Equitel. The group’s chief executive James Mwangi said the ease of getting credit through mobile phones has seen Equitel average loan size more than double to Ksh8,200 in the half-year to June 2017 compared to Ksh3,900 in June 2015. “Increased uptake is due to ease and conve-

48 | Dec 2017 - Feb 2018

nience of access in addition to the quick decision making process. It is self-service,” Mwangi said in an interview. “The loan recipient doesn’t need security to be eligible for the loan, (and) the loan limits are based on your banking behaviour and credit history.” Bank-backed lending apps such as M-Shwari, Equitel, M-Co-op Cash, and KCB M-Pesa have greatly transformed how Kenyans access loans, as consumers no longer need to fill lengthy paperwork, provide collateral or undergo vetting by credit officers. There are also standalone mobile lending apps such as Branch, Tala, Saida and Mombo Mobile, which issue short-term loans via mobile money and charge a processing fee.

Facebook-linked Branch mobile app said in July it had disbursed Ksh3.6b ($35m) since launching in Kenya in April 2015. Equity mobile loans start from Ksh100 (Ush3,500) to Sh3m (Ush106m) and are charged the capped interest rate of 14% per annum, or 1.16% per month – with repayment period limited to 12 months. Typical loans borrowed via mobile were repaid in three months compared to 4.5 months in June 2016, the lender said. Equitel’s volume of non-performing loans was at 2% in June 2017, debunking the perception that mobile-based micro-lending is risky. On average, Equitel processes 8,500 loans daily, according to data for the half-year to June 2017. Loan applicants are also charged an appraisal fee calculated at five cent of the loan amount.

Coming Soon The year 2018 is here and Morgan International Limited, A renown publishing company in Uganda will be unavailing a new product named The Aviation Magazine. To be part of this publication, Please call;

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Bankers' Journal (Issue 1)  

A publication of Morgan Internationl Ltd Design/Layout: Peter Mugeni/Slick Republic Limited ( https://bankersjournalu...

Bankers' Journal (Issue 1)  

A publication of Morgan Internationl Ltd Design/Layout: Peter Mugeni/Slick Republic Limited ( https://bankersjournalu...