Less than 10 million Bank accounts are currently operational in Uganda, compared to over 24 million Sim-cards in the market. With an estimated population of about 42 million people, the banking penetration is less than 25 per cent.
Most of these bank accounts are owned by urban dwellers, with very few in rural areas where the majority of Ugandans reside.
As such, if we are to achieve financial inclusion, it is crucial that more effort is put in converting the unbanked majority in to a banked population.
One initiative that is enhancing financial inclusion through bridging the banked-unbanked gap is community banking.
By definition, a Community Bank is according to www.wikipedia.com a depository institution that is typically locally owned and operated. “Community banks tend to focus on the needs of the businesses and families where the bank holds branches and offices. Lending decisions are made by people who understand the local needs of families, businesses and farmers. Employees often reside within the communities they serve.”
Community banks usually have specific products for the less-privileged groups mainly women and the youth.
All the 6 nominees have well-tailored products for the informal sector, marginalized and low income communities mainly the women, youth and people with disabilities (PWDs) largely living in rural and semi-urban areas. Such products include low interest group, women and youth loans among others.