Yo Uganda Limited is a fintech company that is revolutionizing the payment landscape in East Africa. The Managing Director Gerald Begumisa discusses the firm’s model, partnership and plans to redefine the payments space in Africa.
You recently received the Payment System Operator License from Bank of Uganda. Tell us more about that and what it portends for You- Uganda?
The fintech space, or generally speaking, digital financial services have experienced tremendous growth in the last few years in Uganda. Thinking back from 2009 when the first mobile money service was introduced, there have been significant strides which have pushed the barriers and seen accelerated adoption of the services.
I would say that the fintech industry in Uganda has been fortunate to have had a permissive style of regulation which promoted and encouraged innovation, while at the same time providing guidelines and developing appropriate regulation. Financial services are fairy sensitive in any country, and with the great growth and adoption came the need to establish regulation to ensure that the services were being offered in a safe way which protects consumers and guarantees the integrity of the overall financial system.
Speaking for Yo!, we are very fortunate to have entered the market early (we were the first mobile payments aggregator in Uganda), and thus have has the opportunity to test various solutions and learn along the way. We expect that with the license we have, there shall be accelerated adoption of services since an oversight framework has now been put in place to ensure consumer protection and quality services.
Who are your clients?
We have a very wide range of customers, from the pharmacy around the corner, to supermarkets and some of the largest financial institutions in the country.
What do you consider your greatest selling points as a payment service provider?
We have greatly benefited from our ability to listen to what our customers, and potential customers are saying and act quickly to create solutions to solve their problems.
In 2010 you introduced the Payment Gateway service, Yo! Payments. How has the service evolved and what has been the market response?
The Yo! Payments Gateway was initially created to facilitate disbursement and collection of funds primarily through online channels i.e web.
Since then, it has since evolved to include access through mobile channels (mobile apps and USSD), banking integration, international remittances and a host of features.
The customers’ response has been remarkable as we carried out customizations to fit the various segments, essentially addressing their needs, and accelerating their uptake of our services.
How has COVID-19 affected your business?
Yo! has seen an increase in customers accepting online payments, which can be related to the fact that customers still had to find a method to keep their businesses running during the lock down. Customers who were previously sluggish about adopting online payments, now have began to view it as a mission critical component of their operation.
How is the financial inclusion situation like in Uganda and what is Yo-Uganda doing to enhance financial access especially among the unbanked and underbanked people?
In recent years, Ugandans' access to financial services has dramatically increased, with a growing proportion of people owning a formal financial institution account which means individuals and businesses today have access to useful and inexpensive financial goods and services that fulfil their needs like credit, insurance, payments, savings and transactions that are offered responsibly and sustainably.
Yo! is therefore using this as an opportunity to actively alter the Ugandan ecosystem's architecture by connecting conventional incumbents like banks and regulators with end-users like small and medium-sized businesses (SMEs) and thanks to the many technologies established, SMEs can also interact with one another in a seamless manner.
More to this, Yo! has partnered with various international organizations such as Mastercard and the United States African Development Foundation (USADF) to drive financial inclusion in agricultural value chains.
What is the greatest threat faced by the African payments industry?
The digital financial literacy gap between those who are and those who are not has accelerated and grown as a result of COVID-19, resulting in a growing competitive divide between firms and across industries, regions, and territories.
What in your opinion is the place of fintechs and payment system operators in driving economic growth in East Africa?
In my opinion, the place for fintechs and payment system operators is in creating, promoting and accelerating usage of a digital market place for various online products and services.
This is simply because they boost productivity, create economic opportunities, improve access to financial services thereby driving financial inclusion and reducing income inequality in East Africa.
How has regulation of the financial system in Uganda shaped the industry over the years?
In 2009, Uganda's first mobile money service provider entered the market, quickly followed by ourselves, as Uganda’s first mobile money aggregator in 2011. Mobile Money Guidelines were announced in 2013, resulting in providing a loose framework to streamline operations of mobile money services.
The Financial Institutions Act of 2004 was amended in 2017 to add agent banking provisions, and the Data Protection and Privacy Act of 2019 was enacted in 2019. The National Payments Systems Act of 2020 was enacted in 2020, and the first fintech licenses were issued to ensure that both Fintechs and their consumers are safeguarded while conducting business, and creating a new regime of trust in fintech services.
What opportunities do you see in the digital finance space and how can African nations take advantage of them?
Through mergers and acquisitions, fintechs have a great opportunity to expand their digital footprint globally.
What are the growth plans for Yo Uganda?
Yo! aims to strengthen our current business strategy while also emphasizing the benefits of adopting our Yo! products and services, as well as international expansion.
Any latest news from your company?
We’re proud to announce a milestone in our partnership with Mastercard and the United States African Development Foundation (USADF) where we have on-boarded more than 200,000 farmers to the Mastercard Farmers Network (MFN) platform. We are excited about this achievement because we believe MFN, integrated with Yo! Payments provides a strong platform for digital inclusion, and we look forward to increased usage of our digital services in the agriculture sector, the largest contributor to Uganda’s GDP.