In a recent event at the Sheraton Hotel to mark World Savings Day, the acting Governor of the Bank of Uganda (BOU), Michael Atingi-Ego, emphasized the importance of entrusting one’s savings to regulated financial institutions.
The event, organized by the Uganda Institute of Banking and Financial Services (UIBFS) and the Uganda Bankers Association, brought together key finance players, regulatory institutions, and financial service providers to commemorate the occasion.
Atingi-Ego, who stepped in as the acting Governor, addressed a crowd of savers and financial industry stakeholders, highlighting the fundamental role of regulated financial institutions in preserving and growing the value of savings. He stressed that the only way to achieve this is by earning a return greater than inflation and encouraged citizens to save their money in formal and regulated financial institutions, such as commercial banks, credit institutions, and microfinance deposit-taking institutions, which are overseen by the Bank of Uganda.
“Regulated financial service providers ensure the security of customer savings and help to preserve value by paying interest on the deposits,” Atingi-Ego stated.
He further warned against the practice of hoarding money in non-interest-bearing locations like pots or mattresses, as it leads to the erosion of the purchasing power of those savings over time.
The significance of the message was underscored by recent data from the Financial Capability Survey (FCS) 2020, revealing that only 20.4% of Ugandans save with specific long-term goals in mind, such as retirement or education. This calls for a more concerted effort to promote financial literacy and inclusion, especially in rural areas, as well as the encouragement of saving among the population.
In response to this challenge, the Bank of Uganda has implemented proactive measures aimed at promoting financial inclusion and improving financial literacy. These initiatives include delivering financial education in local languages, emphasizing the importance of savings, and training financial literacy trainers in rural areas. Additionally, the BOU conducts financial literacy radio shows in local languages to reach a broader audience.
The event saw participation from various stakeholders, including the Deposit Protection Fund (DPF), UIBFS, members of the Uganda Bankers Association, and the Uganda Retirements Benefits Regulatory Authority (URBRA).
Patrick Ezaga of DPF stressed the importance of the Fund’s association with savings, recognizing that a substantial portion of money deposited in financial institutions constitutes people’s savings. He urged the public to save their money in regulated financial institutions to ensure its safety.
During the event, Varghese Thambi, CEO of DTB, highlighted the importance of addressing emerging financial challenges like cyber fraud through increased financial awareness.
As the Bank of Uganda and its partners work together to enhance financial literacy and promote regulated savings, the hope is that more Ugandans will understand the benefits of entrusting their savings to formal financial institutions, ultimately securing their financial futures and contributing to the nation’s economic growth.