The advent of mobile money services gave an opportunity to Ugandans to make transactions outside the traditional banking systems and also use it as a personal savings scheme. After over a year, mobile money withdrawals have surpassed deposits, according to details from the Bank of Uganda (BoU). According to the data, since January last year, customer deposits have always exceeded withdrawals.
However, the streak changed in May 2020, the month in which telecoms recorded the worst fall in deposits in over a year. BoU registered UGX 990 billion that was deposited on customer accounts compared to UGX 1.5 trillion that was withdrawn in the period. These stats have been attributed to the effects of COVID-19.
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According to Monitor, that spoke to Dr. Fred Muhumuza, a Makerere University lecturer, the low deposits were in line with the already declining trend that started in March and continued into April due to Covid-19. However, he noted, the increased withdrawals could possibly have been driven by the fact that people withdrew savings during the period to restart their businesses.
“Imagine money was moved from banks and other sources. Even when banks were open, it was difficult for many to reach them and agents closed since their primary businesses were not functional,” he said.
