A report by KPMG has shown that the Financial Technology (FinTech) sector in Uganda is experiencing a remarkable transformation, playing an increasingly vital role in enhancing financial inclusion and driving the nation’s economic development.
With significant progress in mobile money services, regulatory support, and innovation, the report dubbed the “State of the FinTech Industry in Uganda” has shown that Uganda’s FinTech industry has grown exponentially over the past two years.
While presenting the findings during the 6th Annual Conference of the Financial Technologies Service Providers Association (FITSPA), held at the Sheraton Hotel, Moses Kipchirchir, Associate Director of KPMG East Africa, highlighted the growing impact of Uganda’s FinTech sector.
He emphasized that since 2022, the sector has been instrumental in delivering critical digital financial solutions, playing a pivotal role in bridging the gap between the formal financial system and underserved populations.
However, challenges such as limited investment and global competition continue to shape its trajectory.
The State of FinTech Industry in Uganda
According to the report, several key statistics illustrated the sector’s impressive growth since 2022 such as an increase in Mobile Money Registered Customers. Uganda’s mobile money user base grew in two years by 15.1%, from 532.5 million in 2022 to 612.8 million in 2024. This surge reflects the increasing reliance on mobile money for transactions, particularly in rural and underserved areas.
The report also showed that Bank of Uganda Licenses to FinTechsThe number has grown by 58.3%, from 24 in 2022 to 38 in 2024, showcasing the sector’s rapid formalization and regulatory adoption. When it comes to Mobile Money Transactions, the value of mobile money transactions in two years has risen from UGX 16.7 trillion in 2022 to UGX 21.5 trillion in 2024, a 29.1% increase.
This highlights the trust and convenience that mobile money services have brought to millions of Ugandans, making financial services accessible even to those without formal bank accounts.
Mobile Money Agents in Uganda have also increased by 65.8% across the country, growing from 447,100 agents in 2022 to 741,400 in 2024, further broadening access to financial services at the grassroots level.n Account Balances held in mobile money accounts have also grown by 19.6%, reaching UGX 1.62 trillion in 2024 which reflects both the growing usage of mobile wallets and trust in the system.
Also, mobile phone usage, which is crucial for accessing digital financial services, has expanded from 57.9% in 2022 to 67.7% in 2024, representing a 9.8% increase.
Uganda’s Place in the African FinTech Landscape
While Uganda’s FinTech growth is notable, a comparative analysis of its ecosystem against other African countries reveals where Uganda stands in the broader regional and global market;
Funding is one of the most significant challenges facing Uganda’s FinTech industry is the relatively low level of investment compared to its African counterparts. For instance, South Africa leads the continent with $367 million in FinTech funding, followed by Kenya at $301 million and Nigeria at $243 million. Uganda, however, in 2 years has attracted only $6 million in funding in 2024, a stark contrast that highlights the need for better investment flows into the country.
In terms of mobile phone penetration, which directly influences the adoption of FinTech services, South Africa stands at 90.75% and Kenya is at 6.2% while Uganda’s penetration rate of 67.7% is behind both, though it is showing steady growth, with significant potential for further expansion, especially in rural areas.
In terms of Market Capitalization, Uganda’s FinTech market capitalization stands at $4.6 billion, which, although impressive, is dwarfed by larger markets such as South Africa whose market capitalization is $36.2 billion and Kenya at $33 billion The smaller size of Uganda’s FinTech market highlights the opportunities for further growth and development.
Although, one of the key enablers for FinTech growth is internet penetration, Uganda still lags compared to South Africa whose internet penetration is 83%, while Kenya is at 57%, and Uganda stands at a lower 34.4%. While presenting the report Mr Kipchirchir noted that the lack of widespread internet access, especially in rural areas, remains a critical barrier to FinTech adoption
Despite the challenges, the report demonstrated that Uganda’s FinTech industry continues to benefit from technological innovations that are reshaping the sector globally. Among these include the adoption of Artificial Intelligence (AI) and Machine Learning which have enabled better credit scoring mechanisms, while blockchain and decentralized finance (DeFi) offer more secure, transparent, and efficient ways of conducting financial transactions.
Kipchirchir noted that these technologies are vital in reducing market entry barriers, improving regulatory compliance, and ensuring secure financial services.
He also noted that the introduction of 5G technology promises to transform Uganda’s digital landscape, allowing faster and more reliable mobile banking and digital payments. This technological leap could also help bridge the gaps in both internet penetration and digital financial service delivery, particularly in underserved regions
The report findings confirmed the clinical argument of the conference’s keynote speaker David Birch Global Ambassador for Consult Hyperion who made a trumpet for FinTechs to embrace Artificial Intelligence as a new game changer in the play
“If we want to help people, we have to make AI productive to support and enhance them while protecting them. We should educate people on the proper use of AI. Because the future of banking is robots running everything. Banks will have to convince robots rather than humans that their deal is the best in the market. Financial regulation is extremely important,” he noted.
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