A recent report by Uganda Communications Commission (UCC) reveals that by September this year, only 30.4 million of the 45.6 million registered mobile money Simcards were active, leaving 33.1 percent—approximately 14.6 million accounts—inactive. The data, derived from the Bank of Uganda (BoU), underscores a consistent pattern of inactivity in mobile money usage.
According to the National Payment Systems Act, a mobile money Simcard, classified as an electronic money account, becomes inactive if it has no transactions for 90 consecutive days. If the account holder does not respond to a one-month notice, it is suspended and eventually declared dormant. Balances in dormant accounts are transferred to the Bank of Uganda, and if unclaimed for seven years, they are moved to the consolidated fund.
Between the months of January and September 2024, mobile money subscriptions grew steadily, with an increase of 3.07 percent in the three months to September, reaching 45.6 million. However, 15.2 million accounts, or 33.3 percent, were inactive. This trend remained consistent throughout the year, with 14.8 million inactive accounts in the June quarter and 14 million in March. The report does not provide reasons for the high inactivity rates or their impact on the broader mobile money ecosystem.
Mr. Ibrahim Bbosa, the UCC - Uganda Communications Commission’s head of public and international affairs, speaking about this matter noted that inactive Simcards are redistributed. “Inactive Simcards are [churned] and put back on the network for a potential new subscriber. It is not UCC to determine the inactivity; it is the operator,” he explained.
The management of mobile money accounts was transferred to Bank of Uganda after the National Payment Systems Act of 2020 separated mobile money services from telecommunications regulation. Bank of Uganda has since overseen the system’s growth, with mobile money emerging as a key driver of financial inclusion. A report by Financial Sector Deepening Uganda notes that mobile phone penetration has pushed financial inclusion to over 66 percent.
Despite its significance, the sector faces challenges, including account inactivity. Mobile money now facilitates critical financial services, processing an average of 1.9 billion transactions in the three months to September 2024. While previous clean-ups of operators’ registers have removed dormant accounts, the Uganda Communications Commission report does not indicate whether further clean-ups are planned.
The rising use of mobile money highlights its importance, but high account inactivity calls for closer scrutiny to enhance its efficiency in fostering financial inclusion.
