{"id":1079,"date":"2012-12-01T17:32:06","date_gmt":"2012-12-01T17:32:06","guid":{"rendered":"http:\/\/fortuneofafrica.com\/ug\/financial-services-penetrations\/"},"modified":"2012-12-01T17:32:06","modified_gmt":"2012-12-01T17:32:06","slug":"financial-services-penetrations","status":"publish","type":"page","link":"https:\/\/afrifacto.com\/ug\/financial-services-penetrations\/","title":{"rendered":"Financial Services Penetrations"},"content":{"rendered":"<p>In Uganda financial services are less prominent in rural areas than urban areas and they only reach 14% of the rural population. Some districts in the country are not served by any commercial banks. On average 62% of Uganda\u2019s population has no access to financial services. Slightly over 10 % of the population in Uganda have a personal savings account.<\/p>\n<p>Informal institutions play an important role in the rural financial service provisions and serve approximately 12% of the rural population. These numbers indicate that Uganda\u2019s financial system is still quite shallow and the majority of the Uganda population is not banked.<br \/>\nGovernment effort aimed at financial deepening through growth in savings has yielded low response in rural areas than urban areas.<br \/>\nMarketing in Financial Institutions.<\/p>\n<p>The financial system in Uganda is characterized by the co-existence of formal and informal financial markets. The formal financial markets mainly comprise of commercial banks, development banks and credit institutions while the informal sector includes the following;<\/p>\n<ul>\n<li>Microfinancel Institutions,<\/li>\n<li>Microfinance Deposit-taking Institutionss,<\/li>\n<li>Savings and Credit Cooperative Societies\u00a0 and<\/li>\n<li>Rotating Savings and Credit Associations<\/li>\n<\/ul>\n<p><strong>Challenges in penetration of financial services<\/strong><br \/>\nThe penetration of financial services levels in rural areas are still low due to the following challenges;<\/p>\n<ul>\n<li>Lack of legal documents like a national identity card, voter\u2019s card, driver\u2019s license.<\/li>\n<li>Limited literacy is a deterrent to penetration of financial services.<\/li>\n<li>Low income levels makes people shy away from banks.<\/li>\n<li>Banks terms and conditions at account opening and when applying for loans negatively impact on the poor and uneducated hence low penetration of financial services in rural areas.<\/li>\n<li>Financial intermediation is poor as indicated by the stock of private sector credit of 11.8% of GDP.<\/li>\n<li>The lack of a system of crop finance is a major barrier to lending to small farmers and this has contributed low penetration.<\/li>\n<li>Poor accessibility challenge in terms of infrastructures.<\/li>\n<li>Inadequate knowledge and skills.<\/li>\n<li>Insufficient guarantees and subsidies to agric lending to rural people.<\/li>\n<li>Financial services in urban areas are more profitable than rural areas and this has limited the penetration to rural areas.<\/li>\n<li>Slow rate of growth of savings deposits in rural areas.<\/li>\n<li>Coping with high operating expenses, expanding outreach outside the urban and peri-urban areas.<\/li>\n<li>Lowering interest rates to cope with adverse political and media publicity is a challenge to financial services.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>In Uganda financial services are less prominent in rural areas than urban areas and they only reach 14% of the rural population. Some districts in the country are not served by any commercial banks. On average 62% of Uganda\u2019s population has no access to financial services. Slightly over 10 % of the population in Uganda [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":16,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-1079","page","type-page","status-publish","hentry"],"blocksy_meta":[],"acf":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false},"uagb_author_info":{"display_name":"admin","author_link":"https:\/\/afrifacto.com\/ug\/author\/admin\/"},"uagb_comment_info":0,"uagb_excerpt":"In Uganda financial services are less prominent in rural areas than urban areas and they only reach 14% of the rural population. Some districts in the country are not served by any commercial banks. On average 62% of Uganda\u2019s population has no access to financial services. Slightly over 10 % of the population in Uganda&hellip;","_links":{"self":[{"href":"https:\/\/afrifacto.com\/ug\/wp-json\/wp\/v2\/pages\/1079","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/afrifacto.com\/ug\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/afrifacto.com\/ug\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/afrifacto.com\/ug\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/afrifacto.com\/ug\/wp-json\/wp\/v2\/comments?post=1079"}],"version-history":[{"count":0,"href":"https:\/\/afrifacto.com\/ug\/wp-json\/wp\/v2\/pages\/1079\/revisions"}],"wp:attachment":[{"href":"https:\/\/afrifacto.com\/ug\/wp-json\/wp\/v2\/media?parent=1079"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}