Uganda’s Know Your Customer Regulations: A Complex Landscape for Digital Financial Services

By Jeremiah Grossman

Introduction

The United Nations Capital Development Fund’s (UNCDF) Mobile Money for the Poor (MM4P) program commissioned BFA to conduct a study on Know Your Customer (KYC) requirements for Digital Financial Services (DFS) in Uganda. This article provides a media perspective on the key findings of the study.

Legal Overview of KYC Requirements

• UNCDF’s MM4P program requested a study on KYC requirements for DFS in Uganda.
• Complex legal framework: Financial Institutions Act, Mobile Money Guidelines, Anti-Money Laundering Act, and others.
• When inconsistencies arise, providers must follow Anti-Money Laundering Regulations, 2015.

Diverse KYC Requirements for Individuals and Entities

Citizens and Legal Residents

• Need national ID or alien ID card for a bank account.

Mobile Money Agents, Merchants, and Entities

• Required documents: National ID number, card, or refugee ID card, plus risk-based approach.

Refugees

• ID card needed for mobile money account registration.

Impacts on DFS Adoption & Challenges

• Difficulties identifying informal/semi-formal merchants and agents.
• Need for risk-based KYC approach.

Addressing Challenges

• Improve citizen and refugee identification.
• Tiered regulatory framework for merchant and agent acquisition.
• Conduct sector-specific risk assessments.

Conclusion

• Complex KYC regulations create challenges for DFS adoption.
• Collaborative approach between sector stakeholders, targeted strategies, and policy amendments can foster DFS growth and uptake in Uganda.