Recent data from the 2023 Finscope survey indicates a significant shift in how Ugandans manage their finances.
The proportion of individuals actively tracking their income and expenses has increased by 14%, now reaching 57% since the last Finscope survey conducted in 2018. This change reflects a growing awareness and a more disciplined approach to personal finance among the population.
But here’s the catch: despite this positive trend, a staggering nine out of ten Ugandans feel unsatisfied with their financial situations. This stark contrast suggests that better tracking alone isn’t enough. Many still face broader economic challenges that keep them from feeling secure.
The survey revealed that in 2023, 90% of Ugandans encountered unexpected financial events – more than triple the figure from 2018. For many, this has meant that their incomes just aren’t enough to cover their expenses, forcing them to cut back and lean on personal savings or support from family and friends.
When it comes to planning for the future, only 20% of Ugandan adults feel confident in setting and achieving long-term financial goals. Even more concerning, just 1% have access to pension or retirement benefits, highlighting a lack of safety nets for the future.
On a brighter note, financial inclusion is on the rise, up from 77% in 2018 to 81% in 2023. Much of this growth comes from formal financial services, which have increased by 10%. However, cash remains king, with over 90% of transactions still done in cash, showcasing the informal nature of Uganda’s economy.
Savings habits have also improved, with 60% of adults saving in some form – up from 54% five years ago. Popular methods include home savings and mobile money, showing that people are looking for ways to set aside money for the future.
As Uganda’s population continues to grow the need for better financial education and resources is clear. While the increase in tracking finances is promising, there is still a need for more comprehensive solutions to tackle the structural issues leading to financial dissatisfaction.
FinScope is a national representative survey of how individuals source their income, and how they manage their financial lives, including their engagement with the financial services sector (both formal and informal products/services).
The 2023 FinScope, the fifth of its kind is implemented by the Bank of Uganda in partnership with Financial Sector Deepening Uganda, Uganda Bureau of Statistics, Abi Finance, the Ministry of Finance, Planning and Economic Development, and sheds light on various aspects of financial inclusion of Ugandans aged 16 and above.
Since 2006, five waves of the FinScope survey in Uganda have been undertaken. The FinScope survey offers valuable insights into the attitudes and perceptions surrounding money management, financial products, and services, along with demographic information and an overview of overall lifestyles.
The 2023 survey had three primary objectives. First, it aimed to track overall trends in financial inclusion, providing information on how the landscape evolved since 2018. This included benchmarking these trends against those in neighbouring countries.
The survey also sought to offer insights that could be utilised at both policy and market levels to further enhance financial inclusion in Uganda.
Another key objective was to describe the financial service needs of the adult population, specifically individuals aged 16 and older, helping to inform better financial services and products tailored to their requirements.