Taking lessons from the internet shutdown that affected many because of how heavily people depend on the internet, not only in Uganda but globally, it looks like a solution for financial technology might be on its way to counter such situations. When the government shut the internet down in January, the results were unprecedented and would have caused further damage hadn’t it been restored a few days later.
Financial inclusion continues to grow as many Ugandans have embraced the mode of transacting online and the number of Fintech companies keep increasing. The growth of Financial technology companies in Uganda which was recorded as over 35% in 2018 is a good economic indicator. However, if solutions to ensure that activities proceed in the event of a crisis are not implemented, we can see a downturn.
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Other than that, banks have shifted their work processes online for the purpose of creating customer convenience and have developed online apps where customers can do almost everything through these apps. But in the situation that the plug is pulled on the internet, all these processes come to a halt. Fintech companies are recovering from the effects of the internet shutdown that cost billions of shillings every day the internet was switched off. They were making losses of over an estimated shs 66.6 billion that they would usually receive daily before the blackout.
A ray of hope for financial technology companies
It looks like there could be a solution to this particular problem. A financial technology company in Sweden called Crunchfish is developing software for mobile phones that will let consumers pay merchants in real-time, offline and in any currency including central bank digital currency and Bitcoin.
While some would think the perfect solution to an internet shutdown would be to just simply shift to the traditional mode of transacting in the meantime, this wouldn’t be helpful because the public is not in control when such a situation occurs.
With this upcoming innovation, business will continue as usual as people can keep paying online retail shops and make any other payments that they need to. For Uganda, a country that is vulnerable to government-imposed shutdowns, this would be a great innovation to help sustain the economy and avoid a crisis like one many witnessed at the beginning of the year.