Deepening Cerise+SPTF Engagement in Uganda

A Market Systems Approach to Promoting Customer Empowerment.

Thanks to our strong partnership with the Association of Microfinance Institutions of Uganda (AMFIU), and with funding from the European Investment Bank, Cerise+SPTF has spent the past year working to strengthen customer empowerment among users of digital financial services (DFS) in Uganda.

The first part of the project involved surveying customers in rural Uganda who are using digital savings wallets, as well as mobile money accounts. The survey explored what challenges these customers have faced with DFS, whether they were able to get help when they did have a challenge, and if not, why not. The results confirmed that challenges were extremely common, and that customers did not always get them resolved, for a wide variety of reasons. Given that these findings echoed the research of others, the next part of the project was to organize a workshop with key stakeholders in the inclusive finance sector in Uganda to discuss what we know so far about the reasons for customer disempowerment when using financial services, particularly digital financial services, and to brainstorm solutions.

The workshop took place on May 15, 2024. Representatives from the Uganda Communications Commission, the Bank of Uganda, and the Uganda Microfinance Regulatory Authority, consumer advocates from CONSENT and Consumers International, along with various investors, non-governmental organizations, researchers, the AMFIU team, FSD Uganda, and Ensibuuko, the fintech whose clients we had surveyed, all attended. Innovations for Poverty Action, via its own staff as well as external consultants, presented analysis they have done both in the areas of fraud research, specifically with gamification of training on fraud prevention, and of complaints resolution, specifically with analysis of complaints data that regulatory authorities in Uganda are receiving.

One key finding is that many customers take no action when they experience a challenge using DFS. This is an alarming confirmation of customer disempowerment.

Workshop participants then shared their experiences with the reasons for disempowerment. Among the many impediments to empowerment are these: low literacy, low awareness of how to seek help with a complaint, lack of confidence that the resolution process will work, especially given negative experiences in the past, the costs of filing a complaint, lack of transparency around fees, low awareness of customer rights, and inadequate monitoring of operations.

Finally, the workshop participants discussed possible solutions, identifying roles for each stakeholder in the room to play to promote a more transparent and efficient financial sector with more empowered customers.

As part of the solutions available to market actors right now, Cerise+SPTF shared the DFS Standards, a set of management practices that financial service providers of all types can implement to mitigate the customer protection risks inherent to digital finance.

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