Ugandans urged to cultivate collective saving culture amidst economic challenges

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Ugandans urged to cultivate collective saving culture amidst economic challenges
An image of Uganda Shilling notes

Economists in Uganda highlight the high dependence rate and the soaring cost of living as primary factors contributing to the nation's low saving culture.

Professor Newton Buteraba, a prominent business figure and financial expert, advocates for collective savings with specific goals to build an emergency fund in the face of persistent economic hardships.

Despite challenging economic conditions, fostering a healthy savings habit is recognized as a crucial step towards financial empowerment and inclusion.

A financial capability report from 2020 revealed that only 20% of Ugandans save their money in Bank of Uganda-regulated deposit-taking institutions, with 15% utilizing mobile money for savings.

Additionally, 35% rely on village savings and loan associations, while 30% opt for traditional saving boxes at home.

"Developing a healthy savings habit is one of the best ways to take charge of your finances and promote financial inclusion." stated senior economist John Walugembe

Charles Ocici, the Executive Director of Enterprise Uganda, emphasizes that businesses adopting a savings culture can access short-term loans to drive their growth.

Savings with a specific goal and a collective approach are seen as potential solutions to champion financial freedom.

"Businesses, especially those cultivating a savings culture, have the opportunity to secure short-term loans that can significantly impact their growth." stated Ocici

Newton Buteraba underscores the importance of generating multiple income streams as a strategy for surviving the challenging economic landscape.

He encourages individuals to prioritize saving as they explore various avenues to supplement their earnings.

"In the current tough economic times, creating multiple sources of income is crucial for financial survival, and saving remains a fundamental aspect of this strategy." stated Buteraga

Some businessmen attribute the low savings culture to inadequate housing incomes and challenging working conditions.

Factors such as low wages and a demanding working environment limit the opportunities for individuals to set aside money for savings.

"I get 30,000 shillings, have a family, but the money I have made, city authorities who have taken my merchandise would want a bribe to get my goods back." stated a local businessman

Despite the challenges, Uganda has seen a gradual increase in savings from 3.5 trillion shillings in 2011 to approximately 20 trillion in 2022, indicating a positive trend in the nation's savings culture

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