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Cabinet gives nod to use of Mobile Money to buy govt securities

Government-spokesman-Ofwono-Opondo said use of Mobile Money to buy govt securities will lead to increased savings and investment. (FILE PHOTO)

KAMPALA – Cabinet has approved a proposal to use Mobile Money as a platform for investing in government securities.

According to the Executive Director of the Uganda Media Centre, Mr Ofwono Opondo, the move is beneficial to both government and Ugandans as it will lead to increased savings and investment thus enhancing financial inclusion and economic growth.

To the retail investor, Mr Opondo said the proposal will enhance savings and investment as it will provide opportunity for local people to save and earn some income.

He said it will enable ease of access to Government securities, adding that retail investors will not have to physically deliver bids to their banks (which are sometimes a long distance away);

“It will also present an opportunity to enhance private sector credit as Government securities are the highest form of collateral for loans. It will also provide an opportunity for Diaspora investors to save and earn a good return while developing their country,” Mr Opondo said during a media briefing on Tuesday.

He added that the move will also lead to reduced cost of domestic debt.

“Widening the scope of investors reduces the dependence on a few players such as commercial banks, offshore players and institutional investors which tend to bid highly in the auctions given that Government has limited choice.  This product takes on the characteristics of a Collective Investment Scheme, which is not taxed under the Income Tax Act. Therefore tax will not be considered when pricing,” he said.

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