In Uganda, the way people use mobile money and banking services is evolving rapidly, and Equity Bank is at the forefront of this transformation. The once rigid divide between telecom companies’ mobile money platforms (like MTN Mobile Money or Airtel Money) and traditional bank accounts is fading. Instead, a seamless connection—or “bridge”—is being built through technology, shared resources, and innovative partnerships.
This bridge is enabling new financial products and services that are easier to use, more accessible, and tailored to the needs of everyday Ugandans, from small business owners to farmers and gig workers. Equity Bank’s strategy is to combine its banking expertise with the strengths of telecom companies to create a financial ecosystem that’s inclusive, efficient, and forward-thinking.
In this explanation, we’ll break down how Equity is doing this, why it matters, and what the future holds for mobile money and banking in Uganda.
Moving Beyond Simple Transactions
In the past, partnerships between banks and mobile money providers were mostly about basic transactions, like moving money from a mobile wallet to a bank account or vice versa. This is often referred to as “cash-in/cash-out” functionality.
For example, someone might deposit cash into their mobile wallet at an agent and then transfer it to their bank account, or withdraw money from their bank account via a mobile money agent. While this was useful, it was limited in scope.
Equity Bank is taking things much further by collaborating with telecom companies to create new financial products that go beyond these basic transfers. These products are designed to meet the specific needs of Ugandans, especially those who may not have access to traditional banking services. Here are some examples of what they’re working on:
- Micro-savings accounts with auto-sweep rules: These are small-scale savings accounts that automatically move extra funds from a mobile wallet to a bank account when certain conditions are met. For instance, if someone has more than a set amount in their mobile wallet, the excess could automatically transfer to a savings account to earn interest, encouraging saving habits.
- Invoice-based SME credit: Small and medium-sized enterprises (SMEs) can get loans based on their sales invoices. This is especially helpful for small business owners, like shopkeepers or market vendors, who may not have traditional collateral but have a steady stream of sales that can be tracked through mobile money transactions.
- Embedded insurance bundled with payments: Insurance products, like health or crop insurance, can be integrated into mobile money transactions. For example, a farmer might pay a small premium alongside their regular mobile money transactions to protect against crop failure, making insurance more affordable and accessible.
Equity Bank’s role in these partnerships is to manage the technical and regulatory aspects, such as securely holding funds, ensuring compliance with financial laws, and assessing risks to price loans and insurance fairly. Meanwhile, telecom companies provide valuable data from their mobile money platforms—like transaction histories or payment patterns—that help Equity create personalized financial products and make better lending decisions.
The Power of Open APIs
A key part of Equity’s approach is using open APIs (Application Programming Interfaces), which are like digital connectors that allow different systems to talk to each other seamlessly. Think of APIs as a universal plug that lets a mobile money platform work smoothly with a bank’s systems.
This technology is a game-changer because it makes partnerships more flexible and efficient. Here’s what open APIs enable:
- Real-time transfers and collections: Money can move instantly between a mobile wallet and a bank account, or between merchants and customers, without delays.
- Streamlined merchant onboarding: Businesses can sign up for financial services quickly, with instant “Know Your Customer” (KYC) checks that verify their identity using data from telecoms or banks.
- Event-driven notifications: Customers receive automatic reminders, like a text message about an upcoming loan repayment, helping them stay on track.
- Programmable payouts: Platforms like gig economy apps (e.g., ride-hailing services), agricultural tech companies, or NGOs can set up automated payments to workers or beneficiaries, saving time and reducing errors.
By using an API-first approach, Equity and its partners only need to build one connection to launch multiple services, rather than creating separate systems for each new product. This saves time, reduces costs, and allows them to roll out innovative offerings faster.
Combining Distribution and Data for Inclusion
One of the biggest strengths telecom companies bring to these partnerships is their distribution network. In Uganda, mobile money agents are everywhere—small shops, kiosks, and even individual vendors act as agents, making it easy for people in rural and urban areas alike to access mobile money services.
Banks, on the other hand, have fewer physical branches, especially in remote areas, but they bring financial expertise, including the ability to hold large amounts of money securely and comply with regulations.
When banks and telecoms work together, they create a powerful combination. The transaction data generated from mobile money usage—like how often someone pays bills, sends money, or receives payments—can be used (with the customer’s permission) to build better credit scoring models. These models help banks like Equity assess whether someone is likely to repay a loan.
For many Ugandans, especially those who are “underbanked” (meaning they don’t have access to traditional banking services), this data-driven approach makes it easier to qualify for loans or other financial products. By analyzing repayment histories, regular income patterns, or a merchant’s sales turnover, Equity can offer fairer loan terms and approve more people who might otherwise be overlooked.
Cross-Border Payments and Treasury Solutions
As Uganda’s economy becomes more connected to the region, cross-border payments are becoming increasingly important. Many Ugandans work abroad or have family members in neighboring countries, and they need ways to send and receive money quickly and affordably.
Equity is working to create instant “wallet-to-bank corridors” that make these transfers seamless. For example, a Ugandan worker in Kenya could send money to their family’s mobile wallet in Uganda, which could then be used directly for purchases or transferred to a bank account.
Equity’s treasury and foreign exchange (FX) capabilities also play a big role here. They allow the bank to handle large-scale transfers or currency conversions efficiently, ensuring that money stays in digital form rather than being cashed out, which reduces costs and keeps the financial system efficient. This is especially helpful for merchants who need liquidity to run their businesses or for NGOs distributing funds to communities.
The Future: Invisible Banking
Equity’s ultimate goal is to make banking invisible—meaning customers won’t even notice whether a transaction is processed by a telecom’s mobile money system or a bank’s infrastructure. They’ll just know it was fast, affordable, and secure.
For example, when a farmer pays for seeds using their mobile wallet, they won’t care whether the money moved through a telecom switch or a bank’s payment rail—they’ll just be happy it worked instantly.
To achieve this, Equity is focusing on partnerships that combine the strengths of banks and telecoms to create a seamless financial experience. This means more people, especially those in rural areas or with limited access to traditional banking, can save, borrow, and insure themselves against risks without needing to visit a bank branch or navigate complex processes.
