picture courtesy of pctechmag.com

In 2009 MTN launched Mobile Money services in Uganda and since then its been a story of moving from glory to glory. In the first year of its launch, Uganda registered one of the fastest growth rates in the use of Mobile Financial Services ever recorded in a single year. No wonder that not long after it was launched the other telecom companies started providing the same services.

The numbers have over the years grown even bigger and passed the 50% threshold of users  .

However, despite the success, there still exist barriers that hamper the mobile financial service business in Uganda chief of which is the lack of adequate laws to regulate the business. Last week in a press conference MTN Chief Executive Officer, Brian Gouldie expressed concern over the existing laws on mobile money which he believes cannot adequately regulate the business.

The law which regulates Mobile Money services at the moment is the Bank of Uganda Mobile Money Guidelines 2013.

Though the guidelines are fairly detailed and should sufficiently address the gaps in regulation, it is arguable that they are not legally enforceable, particularly against Telecom Companies. Telecom Companies are regulated by Uganda Communication Commission (Section 5 of the Uganda Communications Act, 2013) and therefore the Bank of Uganda has no power to regulate their activities be it the provision of mobile money services or otherwise.

Central Bank is only mandated under S.4(2) (J) Bank of Uganda Act to supervise, regulate and control financial institutions in Uganda not the business of telecommunication companies. There’s therefore a lacuna in the law. True, telecom Companies are partnering with institutions licensed by the Bank of Uganda and at that point the guidelines may be embraced as relevant. However, there is need for a more concrete and substantive law on this crucial service because the subsidiary legislation that exists raises questions on its enforce-ability anyway.