The FinTech industry has made it easy for nationals to access financial services and without doubt, they are more than supporters of Uganda’s eco-system. For instance payments for services have been eased by the growing fintech industry. However, the future of the economy’s saviour seems to be in jeopardy as a result of stiff regulations.
FITSPA Uganda’s 2021 fintech conference has converged stakeholders to discuss this and more as it looks at building a safe and regulated ecosystem.
“East Africa has about 300-400 fintech and the number is set to grow exponentially in a couple of years.” Ken Njoroge, the director at Cellutant Corporation, noted during the 2021 FITSPA fintech conference.
The future of the fintech industry
FinTech startups encounter quite a number of challenges and among these is acquiring operation licenses et al. Edith Kutesa the MD at Mcashuganda noted that though it was burdensome to acquire legal operation permits, regulations have proved to be valuable to them and it will set a good pace for partnership and growth.
Mr. Aomu Mackay, director of national payments at the Bank of Uganda emphasizes the need to support fintech by building a pool of funds to help them scale up and ease application processes for permits.
Register here: https://fitspa.ug/2021-fitspa-conference/
In2019, mobile SPs were advised to partner with regulated financial institutions which is an indirect regulation. Mr. Mackay says the National payment systems act 2020 will bring orderly entry, operation, and exit in the Fintech space.
The National Payment System Act 2020
According to the NPS act 2020, payment systems must be licensed by the central bank and no one can operate a payment system before being licensed. If one is found guilty of operating without a license, they are liable on conviction to a fine not exceeding two thousand currency points or a term of imprisonment not more than 4 years.
Some eligibilities to acquire a license
- Clear payment as instructed by the central bank
- Settlement of obligations arising from the clearing of payment
- Transfer of funds from one account to another using an electronic device
- Provision of technology services to facilitate switching, routing, clearing or data management for or on behalf of a payment system provider.
- Provision of financial communication networks.