National and global financial analysts say Ugandans rank highly among the worst when it comes to saving money in commercial banks and other financial institutions, negatively impacting investments in the country.
In fact, a recent survey reveals that 87 percent of Ugandans aged 10 and above do not own a functional bank or savings account. The National Labour Force Survey, 2021, which was done by Uganda National Bureau of Statistics (UBOS) still shows that only 9 percent of the population had a functional bank account while only 3 percent of the entire population possess a microfinance/SACCO account.
Another report released earlier by the Deposit Protection Funds (DPF) shows that more than 90 percent of Ugandans who hold bank accounts do not keep more than one million shillings at any one time in their accounts, a sign of the poor saving culture.
There are many reasons for the above figures such as poverty, lack of financial literacy and lack of bank branches in the rural areas of Uganda among other reasons.
However, the other big reason why Ugandans do not want to save with banks and other financial institutions is fraud orchestrated by the bank staff, and is a hot topic in the local media and banking industry, which is a shame not only on the side of banks but the government and country at large.
However much there is some form of insurance cover for deposits, some Ugandans have decided to keep their money in sacks at home because they fear it will be stolen by bank staff and will never be recovered.
Interestingly, many of the banks are not willing to apologise to the victims who have lost their money and in most cases, without even investigating, the banks put the blame on the victims.
Further still, the Uganda Bankers’ Association (UBA), an umbrella of local banks in the country has never come up to publicly condemn the bank staff who fleece depositors’ money. UBA is only seen in the public lamenting when a member bank falls victim to sharp business goons like it happened recently with one of their members.
Banks should know that their thieving staff are an obstacle to investment in the country. When an investor loses his money in the bank, there is no doubt that his projects will stall due to lack of working capital. Further, investors, especially foreign ones will fear saving their money in Ugandan banks. That results in unemployment.
Relatedly, due to greed, some of the bank staff have gone further to con clients of their properties such as land and buildings. A story is told of how the staff of a certain bank were involved in a murder of a client so that they could benefit from his prime land in one of the major cities in the country. The client had mortgaged the land to the bank for a loan.
Some banks have been accused of trying to hold on or using the money of the dead, which some people say is unethical and unfair to the family of the deceased.
Disturbing still, the Bank of Uganda (BoU) which regulates banks in the country, is also shy to publicly condemn banks for their vices. BoU should come out and tell the public actions being taken to clean banks of iniquities, even though the Central Bank has its own share of controversies arising from the closure and liquidation of some banks.
Meanwhile, some members of the public are calling for lifestyle audits of those working in banks. They say most of the money stolen from banks by staff ends up in real estate and lending, while some are keeping the money either in their houses or with friends and relatives, which is bad, on the side of investments.
