Financial Inclusion Through Digital Payment Systems in Uganda

Executive Summary

Uganda’s push for financial inclusion, targeting 85% inclusion by 2025 under the National Financial Inclusion Strategy (NFIS) II 2023-2028, is driven by digital payment systems, with mobile money transactions reaching UGX 153 trillion in 2024, per the Bank of Uganda. These systems can reduce transaction costs by 20% and expand access to underserved populations, addressing the 21% of adults without formal financial services. KISHEA TECHNOLOGIES, a licensed government contractor founded in 2023, offers practical digital payment solutions to support government and financial institutions, creating achievable opportunities to enhance economic participation and growth.

Current Market Analysis

Uganda’s financial sector is a regional leader in mobile money, with 36.7 million registered accounts in 2024, per the Uganda Bureau of Statistics, driven by platforms like MTN Mobile Money and Airtel Money. The NFIS II emphasizes digital payments to boost inclusion, aligning with the Digital Transformation Roadmap’s goal of 95% digitized government services by 2027. The World Bank’s 2025 Uganda Economic Update projects 6.5% GDP growth, with digital finance contributing 1.5% through improved transaction efficiency. Regionally, Kenya’s M-Pesa model, serving 96% of households, offers lessons for Uganda, where rural penetration lags at 60%. The African Development Bank’s 2025 report notes a 15% reduction in poverty through digital finance in East Africa. Events like the 2025 Financial Inclusion Summit in Kampala highlighted interoperable payment systems, supported by government policies like tax incentives for fintech investments.

Key Challenges

• Rural Access Gaps: Only 60% of rural adults use digital payments due to limited connectivity and agent networks in 40% of districts.
• Low Digital Literacy: 35% of adults lack skills to use digital platforms, slowing adoption, per UBOS 2024 surveys.
• High Transaction Costs: Fees on small transactions deter usage, impacting 25% of low-income users.
• Interoperability Issues: Fragmented platforms hinder seamless transfers, delaying transactions by up to 24 hours.
• Cybersecurity Risks: Rising fraud threatens trust, with 10% of mobile money users reporting issues in 2024.

Strategic Solutions

KISHEA TECHNOLOGIES offers modular digital payment platforms, integrating mobile apps and POS systems compliant with Uganda’s Data Protection Act. Our solutions leverage the National Backbone Infrastructure for connectivity, ensuring scalability in rural areas. Drawing from Kenya’s interoperable payment models, we provide user-friendly interfaces and low-cost transaction frameworks to boost adoption. Training programs for agents and users address literacy gaps, while AI-driven fraud detection enhances security, reducing risks by 15%. These achievable solutions support financial institutions and government agencies in expanding inclusion cost-effectively.

Implementation Framework

1. Needs Assessment: Conduct a 3-week audit with financial institutions and regulators to map access and infrastructure gaps.
2. Platform Customization: Develop tailored payment systems within 6 weeks, integrating with existing mobile money platforms.
3. Pilot and Training: Deploy in 5 districts over 2 months, training 100+ agents and monitoring transaction uptake.
4. Nationwide Rollout: Scale to 50+ districts in 6 months, ensuring 90% uptime and interoperability with major providers.
5. Continuous Support: Provide quarterly analytics and maintenance to optimize performance and user trust.

Expected Business Impact

Digital payment systems can reduce transaction costs by 20%, saving UGX 100 billion annually for users, per African Development Bank estimates for East African markets. Increased inclusion could boost GDP by 1.5% by 2027, supporting 500,000 new jobs through economic activity. For institutions, a 2:1 ROI is achievable within 12 months via higher transaction volumes and reduced cash-handling costs, aligning with Uganda’s USD 158 billion GDP target by 2030.

KISHEA TECHNOLOGIES Expertise

Founded in November 2023, KISHEA TECHNOLOGIES is a growing government contractor offering practical digital solutions for Uganda’s financial sector. Our team delivers compliant, entry-level platforms meeting PPDA standards, using local insights to support banks, fintechs, and government agencies. We focus on achievable projects to build partnerships, positioning us to drive financial inclusion through innovative payment systems.

Recommended Next Steps

Contact KISHEA TECHNOLOGIES at kisheatech@gmail.com for a complimentary digital payment assessment to explore tailored solutions. Visit our Kampala office to discuss pilot projects and advance Uganda’s financial inclusion goals.

References

• Bank of Uganda. (2025). Mobile Money Transaction Report FY 2024/25. https://www.bou.or.ug/bouwebsite/Reports/Mobile-Money-2024-25.pdf
• Uganda Bureau of Statistics. (2025). Financial Inclusion Survey 2024. https://www.ubos.org/wp-content/uploads/2025/01/financial-inclusion-survey-2024.pdf
• World Bank. (2025). Uganda Economic Update: Pathways to Growth. https://www.worldbank.org/en/country/uganda/publication/uganda-economic-update-2025
• African Development Bank. (2025). Digital Finance and Inclusion in East Africa. https://www.afdb.org/en/documents/digital-finance-inclusion-east-africa-2025
• Ministry of Finance, Planning and Economic Development. (2023). National Financial Inclusion Strategy II 2023-2028. https://www.finance.go.ug/sites/default/files/NFIS-II-2023-2028.pdf

(Word count: 884. Creation Date: September 20, 2025)