According to an Article by Financial Sector Deepening Uganda, Mobile money was introduced in Uganda in 2009, as a business model that involves a partnership between a mobile money operator and a commercial bank.
Since its introduction in 2009, mobile money has seen phenomenal growth, as of 2022, Uganda has over 35 million registered active mobile money users that in the first quarter of 2022 alone, the total number of all unstructured Supplementary Service Data or USSD sessions in Uganda reached an all-time high of 8.2 billion, up by roughly half a billion sessions compared to the same quarter of the previous year.
A USSD session involves one real-time communication connection between, most commonly, a phone and a network or server used inter alia for WAP browsing, mobile money services, or prepaid callback service and a staggering 93trillion (25Billion USD) in annual value of transactions.
However, mobile money growth and development has come with its unchecked challenges, like limited customer awareness and low levels of literacy, fraud, large informal sector, irregular transactions, political interference and many others. By 2020, the Uganda Police Annual Crime and Road Safety Report of 2020 showed more than 61 billion Uganda shillings ($13M) was lost to criminals in Uganda through mobile money related challenges.
On a close discussion with any mobile money user in Uganda, you realize that everyone has suffered a pain-point in using this money system “who can help me recover my 20,000/=, 50,000/= that I lost to uncredited data, yaka token etc. are daily cries” social media is awash with complaints of several similar losses but with zero or no help from the Mobile Network operators or mandated entities like UCC. And these are common narration from almost all mobile network users in Uganda.
The most common loss of mobile money at the moment is through fraudsters preying on unsuspecting Ugandans stealing their money disguising as mobile money agents, relatives etc. A close discussion with most Mobile Network Operators (MNO’s) you will realize that they agree that they do not have a remedy for this loss except the regular campaigns to create awareness like the current, “Tonfera campaign” running on several radios and Televisions in Uganda and that’s about it. Whether these campaigns are effective is an argument for later?
But on a deep analysis, majority of the Mobile Network users in Uganda are indigent people, and can barely afford a radio or Television set in their homes, “The BBC World Service’s national representative survey indicated that only a Third of Ugandans had working televisions and only 13% of the adult population had access to the internet within their households” those that can afford the Televisions are always working trying to earn survival. Thus this begs the question of how effective are the campaigns to an average Ugandan? Are these campaigns even reaching the intended market? What’s the follow up strategy?
When one interacts with the Mobile Network Operators at the helm (MTN and Airtel), the statement or way of management is always a dismissive one, “we have put safe guards in place and codes to dial, so there is nothing big we can do about it?”, when you ask them about sensitization, they will be quick to tell you about the ongoing Radio and TV Campaigns they have partnered with Regulatory mandated entities like UCC, BOU etc. that are currently running. And this will circle back to the question of how effective are these campaigns and how many people are they reaching? What’s the impact? None of them knows?
It was Steve Jobs who stated that “Strategy is figuring out what not to do, not doing what you are not supposed to do?”, but these Mobile Network Operators already know that, and the answer simply is that they do not care about whether you are cheated, defrauded or lose money, because the campaign to help you recover your money/create consumer awareness is not income generating, it’s basically a no return investment.
The entities supposed to help Ugandans on arm twisting these Mobile Network Operator’s like Bank of Uganda Consumer Protection department and Uganda Communications Commission just do not genuinely have enough desk support or they do not care or are somehow somewhere benefiting from these MNO’s.
But the key question is do these Mobile Network Operators know that these campaigns do not meet the intended result? The straight answer is YES?
How do we know that these MNO’s know that the “Tonfera campaigns and the like do not meet the intended goal?” We look at past campaigns of both MTN and Airtel about their new projects they are trying to sale to the consumers, like the online cashless campaign or when they were moving away from the scratch cards to online loading of airtime, they had artists, open cars, agents and made door to door efforts to sell their products, they did country wide parades and the message was well received. Even other entities like Uganda Revenue Authority (URA) know that the best way to reach the entire Ugandan population is through door to door campaigns thus the recent URA bus that goes from village to village educating and sensitizing traders on how to pay tax, get NIN numbers and relentlessly expand the tax base.
This for a country Uganda that has a vast majority in informal sector, with limited internet and radio coverage, with hard to reach areas is how vital information is passed on, but one now asks, why does MTN and Airtel who clearly know this strategy, have used it before and it has worked for them only limit the sensitization against fraud and money losses to mere 15 second “Tonfera adverts” on radios and Televisions? The answer can be that either they do not care or there is no one to hold them accountable?
We have also had the opportunity to see what our Judicial system provides, remembering that majority of these money losses are below 100,000/- and happen on indigent people, it’s hard for these people to try the civil court system with its involved costs, which has left the consumers with no forum/area of redress and thus continue to suffer these pain points with no assistance.
Recently I visited the small claims court and tried to interact with the Registrar in charge of Small Claims Matters, she intimated that small claims matters handle simple and straight forward cases, and that cases that required leading witness, expert witnesses cannot appear in small claims courts (See Rules 8(2&3), Rules 24 of the Judicature (Small Claims Procedure) Rules No.25 of 2011.
My question was then, what happens to an aggrieved Mama Tendo in Ntinda Market who was sending 50,000/- to the sick daughter in Kirudu Hospital to buy necessities and the money was lost in the transaction. This from the simple interpretation of the small claims, she should be able to find redress, but because of the nature of the loss, she can-not get the redress from small claims because this matter needs witnesses, leading evidence, which will require an expert on online transactions and an advocate who are not allowed in small claims courts. Mama Tendo basically cannot afford to hire the lawyers in Kampala to assist her in fighting a goliath in MTN or Airtel. She has to count her losses and move on.
The response from the registrar was that, yes she has to count her losses if she cannot afford a lawyer to assist her recover 50,000/- , that’s the shocking truth, we currently do not have a law on small claims financial transaction losses and the mandated entities are so sound asleep to offer any help, . How many people fall in the ambit of Mama Tendo in Uganda, and where can they seek justice from?
Uganda is quickly moving into a digital economy and the pace of technological progress has accelerated resulting into the introduction of new business models to make processes more efficient and to better address the needs of customers/consumers, Like online applications like safe boda, Uber, to mention but a few, key technological advances have sprung up like sharing economy, Big Data analytics, Block chain/Distributed Ledger Technology (DLT), Cloud computing that are currently revolutionizing the financial sector around the world.
This economy revolution is majorly favored by platforms of transaction like Mobile money, Uganda being a small income economy, majority of the transactions ought to fall under the small claims, thus a means to redress such pain points need to already be in place from as far back as 2009. “The Mobile Money ‘Small Claims’ Financial Transactions Losses”.
