MUKWELI’S POST BANK (U) RALLIES PARTNERS TO DEEPEN FINANCIAL INCLUSION AS IFAD AND POSTA UGANDA COME ON BOARD
By Our Reporters
In a bid to deepen access to affordable formal financial services, PostBank Uganda MD Stephen Mukweli & Co have taken their passion to a whole new level by wooing over partners with whom previously registered gains can be strengthened. A seasoned banker of many years, Mukweli has always preached financial inclusion whenever he gets the opportunity. And one gets the impression that if all UBA CEOs were equally enthusiastic, a bigger fraction of Ugandans would be accessing and using formal financial services than is currently the case. Out of the 40m people, less than 10m keep an active account with banks or any other financial institution. Whenever he goes upcountry to do bank work, Mukweli always insists that this anomaly must be reversed by increasing the number of people actively accessing and using formal financial services. He believes deepening financial inclusion is the surest way to reverse this anomalous situation. Yes he wants to make some money for his employer (PBU) but the man from Elgon rightly believes everybody wins when many more Ugandans get once the financial system becomes more inclusive. And he is indeed renowned for this passion ever mobilizing the masses to increase access to and utilization of financial services offered by banks and sister institutions. As enshrined in the UN SDGs, the cost of accessing financial services will significantly diminish once more people become active users. The SDGs seek to lower the cost of sending/receiving remittances globally from the current 12% to just 3%. This explains why IFAD, whose operations are executed in a manner that seeks realization of the SDGs, became the appropriate entity for Mukweli’s PBU to partner with to roll out the latest inclusion project.
Mukweli’s relentless efforts paid off a few days ago when International Fund for Agricultural Development (IFAD) and Posta Uganda agreed to a partnership with his PBU in order to reach out and serve the hitherto unserved clientele comprising of new refugee arrivals and generally poor communities in the hard-to-reach rural areas. The truth is some of these new refugee arrivals are prompted by armed conflict, hunger and generally food insecurity in their countries of origin. And PBU couldn’t have paired up with a more appropriate partner than IFAD whose mandate includes harnessing agricultural production for food security. According to Jackie Kwesiga, the PBU Communications Manager, the targeted low income communities (refugees and Ugandans in poor hard-to-reach areas) will benefit by way of receiving/accessing their financial remittances through the PBU time-tested service delivery infrastructure at a uniquely low cost. This gradually deepens financial inclusion, something the MD Mukweli is very passionate about. He rightly believes there is need to demystify financial institutions’ services which people in economically vulnerable communities are very superstitious and apprehensive about.
THE LAUNCHING EVENT;
The three institutions (PBU, Posta Uganda & IFAD) are to jointly implement this new effort at financial inclusion under a new project called “Scaling up Remittances and Financial Inclusion in Uganda.” It’s meant to ensure there is increased access and use of financial services by people in the hitherto excluded economically vulnerable communities that banking institutions always shun because they are situated in hard to reach areas. It’s generally considered that serving in such remote places doesn’t make economic sense at it can’t be viable in the short run. Mukweli’s thinking is different. He believes as a responsible corporate citizen, his PBU has an obligation to reach out to such vulnerable communities and end their exclusion from financial services. This can only be achieved through awareness creation but most importantly through significantly reducing the cost incurred to access financial services. The new project was launched on Thursday 29th September at the Posta Uganda (post office) facility in Masindi where the finance ministry was represented by Minister Gabriel Ajedra and the ICT Ministry by national guidance Commissioner Moses Wetasa. Wetasa pledged his Ministry’s support towards ensuring this relevant partnership between PBU and Posta Uganda succeeds since it’s about serving grass root people. A professional communicator himself, Wetasa promised information ministry’s support to ensure all the relevant messages are routinely communicated to rural communities. Ajedra commended IFAD and PBU for this initiative saying increased access to financial services is good for national development because it comes with financial literacy that is an essential ingredient of the poverty reduction strategy. Posta Uganda MD James Arinaitwe vowed to avail all the Posta Uganda infrastructure to ensure the project’s objective of lowering the cost of proving and accessing financial remittances in these remote communities urgently succeeds.
PBU MD Stephen Mukweli, for whom this clearly was a dream come true, said: “We are grateful to IFAD for the support [because] this project will go a long way in empowering our communities and soon customers will be able to access financial services from Posta outlets through the agency banking model.” In implementing this project, PBU will leverage on Posta Uganda’s rural post office branches network to more cheaply avail financial services to the economically vulnerable rural poor. Mukweli explained that post office branches will be equipped with modern digital mobile technologies to facilitate timely execution of financial transactions and remittances meant for vulnerable groups like people in the refugee settlements. PBU and Posta Uganda will work together to ensure Posta Uganda staff manning these upcountry Post Office branches are specially trained to handle the timely delivery of remittances to intended beneficiaries. It’s true under Mukweli, PBU has grown its branch network to over 40 branches specifically in rural districts upcountry but still there are many areas where PBU is still absent hence the need to leverage on the Posta Uganda infrastructure. There are places where James Arinaitwe’s Posta teams might operate without any PBU branch or even mobile vans presence. PBU is renowned for using its mobile banking vans to reach areas where they have no physical branch presence. Where any gaps exist, the Posta Uganda partnership will be leveraged upon. The three partners (PBU, IFAD & Posta Uganda) have agreed on an ambitious target to bring on board 50,000 new remittance recipients in next 6 months (March 2019 to be exact). It seems a tall order but Mukweli (ambitious as ever) is convinced that, working together, the trio can pull it off and proceed to achieve much more in the subsequent months. An additional 20,000 routine remittance recipients (exclusively refugees) will be covered by March 2019. They will also receive financial literacy, says Mukweli.
IFAD representative Mauro Martini decried the fact that each time one sends or receives a remittance, 12% of the original figure is lost due to relevant charges levied by financial institutions. He said the new PBU-spearheaded inclusion partnership (that seeks to reduce that cost to just 3%) couldn’t have come at a better time. He noted that PBU deserves commendation because by pushing hard for a partnership that diminishes the cost to 3%, the bank was implementing UN Sustainable Development Goals (SDGS) that require reducing the cost to 3% to make life cheaper and easier for the economically vulnerable groups. Globally, about 40% of the remittance-related transactions concern recipients in rural areas where the majority of poor people live but high remittance charges have always significantly diminished the amount intended beneficiaries end up receiving. The 12% cost simply means if you sent your person Shs1m, they will end up receiving Shs880,000 as the rest is lost in remittance delivery charges. Mauro says the money received by recipients in poor rural areas is mostly spent on food, health care, education, improved housing and sanitation. Remittances are therefore critical to help developing countries achieve the Sustainable Development Goals, Mauro Martini emphatically noted during the launching ceremony in Masindi.
The new inclusion project is consistent with and directly relates to the African Postal Financial Services Initiative which is one the many programs IFAD is jointly managing with World Bank. Other IFAD partners include Universal Postal Union, United Nations Capitol Development Fund and World Savings Banks Institute. It’s co-financed by the European Commission. This IFAD Africa-wide inclusion initiative has so far impacted on 11 African countries where the role of postal networks in deepening financial inclusion and access to formal financial services has been strengthened. For comments, call, text or whatsapp us on 0703164755.