bank of uganda remarks by louis kasekende ( phd. ), deputy governor, bank of uganda … … … … … … … … …. at the launch of the orient bank ’ s financial literacy programme – the orient bank business academy … … … … … … … … …. kampala, 30 august 2016 the chairman and members of the board of directors of orient bank ltd, the managing director / ceo of orient bank ltd, all distinguished guests, the media fraternity, ladies and gentlemen, good morning! let me thank the board and management of orient bank for inviting me to today ’ s launch of the bank ’ s financial literacy and entrepreneurship programme – the orient bank business academy. financial education and entrepreneurship training are critical in helping citizens to participate fully in the development process. they both help to alleviate demand side constraints to financial inclusion and empower citizens to better manage their personal resources that are vital in developing small and mediumsize enterprises. i want to highlight three issues which are relevant for this business academy initiative. the first is the level of entrepreneurship in uganda and the related high mortality rate of businesses. uganda is ranked as one of the most entrepreneurial countries in sub - saharan africa and the world. according to the global entrepreneurship monitor ( gem ) 2014 data, uganda had an early - stage entrepreneurial activity rate ( the proportion of the population aged 18 - 64 years who either are a nascent entrepreneur or owner - manager of a page 2 of 7 new business ) of 36 percent compared to the sub - saharan african average of about 28 percent. yet, the attrition rate is also relatively very high with a failure1 of businesses estimated at a rate of 26 percent relative to the average of about 16 percent for sub - saharan africa. so, what accounts for this high failure rate? according to the said gem report, engaging in unprofitable business accounted for more than one in every three instances of business discontinuation, and this can result from a wide range of factors such as continued informality of businesses, misconception of a business idea to management challenges and problems of getting and managing finances. this failure rate means that very few small firms ever grow into bigger firms to attain economies of scale and contribute to formal employment creation. this is compounded by low growth expectations of ugandan entrepreneurs with the gem data estimating that only ten percent of the early stage enterprises expected to employ at least 5 employees within the subsequent five years the second issue relates to some perceptions being

’ s view on current topics within our sphere of competence. in all this communication, it is the intention of bou to send out various messages to the public on wide ranging issues and events. we for example at periodic intervals, issue papers on the state of the economy. we also issue annual banks supervision reports. it is our expectation that in the near future we shall begin issuing regular reports covering developments in the payment system. i should finally inform you that much as the media and indeed the public have the right to access public information, the nature of our operations sometimes compels us to keep to ourselves some of the information that comes to our knowledge through the execution of our work. banking, by its very nature, revolves around confidentiality. to give a practical example, one can only imagine how one would feel if details of one ’ s personal bank account were to be given out to a third party without the account holder ’ s express permission. likewise, bank of uganda, as banker to government and to commercial banks is bound by the confidentiality and trust that exists between a bank and its customers. most important of all, the central bank as the supervisor and regulator of the financial sector is charged with the responsibility of ensuring that the financial sector is healthy and sound at all times so that depositors ’ funds are safe. the relationship between the financial institutions we supervise and the bank of uganda can, in this regard, only be compared to that of a patient and his or her doctor. reckless disclosure of information about the financial sector can end in disruption and in the end cause a run on a bank. you should be informed that while it takes decades to build and attain depositor confidence in the financial sector, it only takes a wink to get this confidence shattered through irresponsible disclosures. there have, therefore been occasions when we have had thoughtful inactions. in brief, we have had open market operations, open mouth operations and open only eyes and ears operations in regard to threats to financial stability. let me now address myself to what i regard to be the challenges to the media. in assessing the contribution of the media to the financial sector as a public good, i would like to distinguish among at least four types of effects. the first type is characterized as “ the news effect ”, which would normally reflect factual or formal positions or events. in a sense, the media ’ s reporting would be faithful and non - controversial. a second type can be identified as rumour effect. often