Uganda shuts down 2.2 million mobile money accounts

Uganda shuts down 2.2 million mobile money accounts

The Uganda Communications Commission (UCC) has revealed in its Market Performance quarterly report that about 2.2 million inactive mobile money accounts were removed from telecommunications networks by March 2021.

The deactivation of mobile money accounts in Uganda is said to have begun last year following the enactment of the National Payment Systems Act 2020, which has certain provisions that provide for suspension or deletion of inactive subscribers from the mobile money system – reports Daily Monitor

Part of the UCC report which tracks different aspects in the telecom sector reads: “Following a clean-up of mobile network operators’ account registers, the number of active mobile money accounts was revised downwards, from 22.5 million to 20.3 million at the end of March 2021.”  

The deactivation of accounts leaves only 66% out of 30.5 million registered mobile money accounts as active users, which means that there are at least 10.2 million inactive mobile money accounts in Uganda.

Mobile money has been one of the fast growing sectors across Africa and as more and more people are owning mobile phones, it is helping accelerate connectivity for millions of unbanked populations on the continent and facilitating financial inclusion.

The report notes that more than five million new accounts were registered between March 2020 and March 2021, which was fueled by significant fees waivers, increased merchant acceptance and limited movements due to Covid-19.

According to the Daily Monitor, In Uganda, mobile money is now governed and regulated by the Bank of Uganda under the National Payment Systems Act. 

This effectively requires for the separation of mobile money from telecommunications services and is now considered as a standalone business that must be subjected to financial regulatory functions. 

Under the Act, a mobile money or an electronic money account that does not register a single transaction within nine months shall be considered dormant and considered for suspension or eventual deletion. 

The Act also states that, an electronic money issuer, among which include mobile money companies, shall, after nine months of no activity, be required to give the account holder a month’s notice, informing the customer of the pending suspension “unless there is a transaction on the account.”

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