diagnostic to establish the suitability of uganda ’ s financial sector legal framework to branchless banking. the results of this study should result into roll out of branchless banking under a suitable regulatory framework and consequent reduction of cost of opening outlets in hard - to - bank areas. the bank has also licensed three mobile money network operators ( mnos ), mtn, airtel and utl in partnership with stanbic bank, standard chartered bank and dfcu bank respectively. by end march, the operators had 1, 968, 125 registered customers and in the period january to march 2011, the total number of transactions were 13, 220, 674 with a total value of shs. 551, 010 million. it is our belief that a combination of the above initiatives will open new opportunities for financial intermediation and inclusion in a safe and sound system. in conclusion, the quest for financial inclusion should be complemented by safety and soundness to ensure that gains made in inclusion are not eroded by loss of savings or loss of confidence in financial institutions. the bou will continue to support formalisation of innovative approaches through improvements in regulatory framework as well as working with other stakeholders. however, unlicensed institutions that take deposits from the general public under the guise of member - savings and those intermediating compulsory savings are doing so illegally and must stop. i also wish to state, as i conclude, that new technology especially in the area of electronic money transfer and agency banking are destined to drive most of the future efforts aimed at financial inclusion. a lot of care must therefore be taken to build sufficient risk - mitigation and regulatory mechanisms that ensure safety of savers ’ funds but at the same time promoting further advances to avoid stifling technological development. with these remarks i once again thank amfiu for the foresight which led to the establishment of the amfiu calendar at which very useful topical issues are discussed. it is my ardent hope that the conference will achieve its objectives as set out in the agenda. i thank you. bis central bankers ’ speeches

louis kasekende : opportunities and challenges of financial inclusion remarks by dr louis kasekende, deputy governor of the bank of uganda, at the national microfinance conference, organized by the association of microfinance institutions in uganda ( amfiu ), jinja, 5 may 2011. * * * hon. syda bbumba, minister of finance, planning and economic development, the ceo of association of microfinance institutions in uganda ( amfiu ) distinguished representatives of the various members of amfiu ; the representatives of the donor community ; distinguished guests ; ladies and gentlemen i am very pleased to be here this morning to address the national microfinance conference organized by the association of microfinance institutions in uganda ( amfiu ). i am indeed delighted that the theme for this year ’ s annual conference “ opportunities and challenges of financial inclusion ” is something that is close to our hearts, and is a very topical issue in the current times. the importance of this topic is underscored by the high levels of financial exclusion prevailing especially in the developing countries including uganda. although access to an array of financial services and tools is growing, the alliance for financial inclusion ( afi ) estimates that more than two billion adults around the world do not have access to financial services – whether formal or informal. financial services such as savings products, credit and loans, payment and money transfer services, insurance, and many others, provide poor people with greater capacity to stabilise and even increase their incomes, build assets and cope with shocks. these financial products have proven to be great tools that mitigate the effects of low, irregular and unreliable incomes which keep many people below the poverty line. in uganda, financial inclusion remains a challenge in spite of the many gains and successes we have achieved in the financial sector. the 2009 finscope study revealed that only 28 % of the adult population above 16 years of age are served by formal institutions such as commercial banks, credit institutions and microfinance deposit - taking institutions ( mdis ) ; while 42 % are served informally by savings and credit cooperatives ( saccos ), village saving and loan associations, etc. the remaining 30 % of the ugandan population is not served by either formal or informal financial service providers. the study also revealed that the most commonly used source of credit were ; shops ( 54 % ), friends ( 25 % ) and informal groups ( 24 % ). only 7 % were found to have borrowed from commercial banks