An analysis of factors for mobile money growth in Uganda: A case study of Mobile Telephone Network (MTN) Uganda Limited

Abstract

The study set out to analyze the factors for Mobile Money growth in Uganda. It had had four objectives namely: to establish the factors responsible for Mobile Money Services Growth in Uganda, to explore the potential mobile money services can play in enhancing financial inclusion in Uganda, to establish the appropriateness of the current Mobile money business model(s) and to establish the challenges facing Mobile Money Services Growth in Uganda and their possible remedies. The study used a cross-sectional survey design whereby, data was elicited regarding wide range of variables at the same point in time rather than attempting to investigate the facts over time. The survey adopted the mixed research approach by using both qualitative and quantitative methods. A sample size of 384 respondents selected using a random sampling technique was used to determine the factors for growth of Mobile Money services. Analysis of the results revealed several factors responsible for the growth of Mobile Money services including but not limited to proliferation of mobile phones, availability of a wide range of products, innovation, presence of agent distribution network and convenience. The findings further show that Mobile money has significant potential it can play in enhancing Financial Inclusion by encouraging saving, enabling access to micro loans and insurance policies among others. In addition, the findings reveal that the current Business model used in the Mobile Money sector which hinges on majorly a three-party partnership of a Mobile Network Operator, a Financial institution and an agent distribution network is on the one hand appropriate to the extent that it enables the parties to concentrate on their core business strengths while complementing one another but on the other hand, not so appropriate especially when there are many competing interests amongst the players in the eco-system. A significant number of challenges facing the Mobile Money services sector were also established including rampant system failures, unfavorable tax regimes, lack of well streamlined regulatory framework and fraud. Several strategies to counter the challenges are also suggested including investment in robust and agile infrastructure that can minimize system downtimes, continuous engagement with government and other key stakeholders in establishing favorable tax regimes and harmonized regulatory framework among others. Areas for further research were put forward including; examining the role of Mobile money in promoting a cashless economy in Uganda, analyzing the impact of Mobile money services on the transformation and development of rural areas and the efficacy of the regulatory framework in an ever evolving the Mobile Money services eco-system.