The government-backed scheme aims to attract first-time investors who may be hesitant to trust private asset managers
Kampala, Uganda | ENTEBBENEWS.NET | Uganda has launched a pilot of Africa’s first government-owned unit trust scheme, aiming to channel informal household savings into regulated investment products and strengthen domestic capital markets.
The Okusevinga Money Market Unit Trust Scheme, unveiled on Dec. 17 by the Ministry of Finance, Planning and Economic Development and the Bank of Uganda, allows individuals to invest small sums in money market and bond funds through a mobile-based platform. Officials said a full public rollout is expected in early 2026.
The initiative represents a policy shift from merely expanding financial access to encouraging active savings and investment. Uganda has made significant strides in financial inclusion, largely through mobile money, with 81% of adults now accessing financial services, according to the FinScope Uganda 2023 survey.
Despite this progress, most Ugandans continue to save informally, holding cash at home, buying physical assets, or participating in rotating savings and credit associations. Such methods provide flexibility but deliver limited returns and little contribution to long-term wealth or capital formation.
“Access alone is no longer the main constraint. The challenge is converting access into savings and investment that can build household resilience and support economic development,” a finance ministry official said.
Investment schemes exceed Shs 3.85 trillion
The government-backed scheme aims to attract first-time investors who may be hesitant to trust private asset managers. It complements existing private unit trust funds operated by firms such as Stanbic, UAP Old Mutual, and ICEA Lion, which have historically served corporates, pension funds, and middle-income earners.
Data from the Capital Markets Authority (CMA) shows that assets under management (AUM) under collective investment schemes (CIS) exceeded Shs 3.85 trillion (US$1.05 billion) at the end of December 2024, surpassing the US$1 billion mark for the first time. This represents 9.6% growth from the previous quarter and a 63% increase from December 2023.
The number of funded CIS accounts rose to 113,445, up 11.6% from the previous quarter and 60% year-on-year. Analysts attribute the growth to strong regulatory frameworks, increased investor awareness, and allocation of National Social Security Fund (NSSF) midterm funds into CIS.
The sector is supported by seven licensed managers, including Britam Asset Managers Uganda, ICEA Lion Asset Management, Sanlam Investments East Africa, SBG Securities, Old Mutual Investment, Cornerstone Asset Managers, and Xeno Technologies Uganda.
Investors in Uganda’s unit trust schemes currently earn interest rates ranging between 11% and 12% per annum, offering returns that compare favorably with traditional bank deposits and informal savings mechanisms. The attractive rates, combined with the accessibility of mobile platforms, are expected to encourage participation from informal-sector workers and first-time investors alike.
While Uganda’s CIS market remains modest compared with regional peers—Kenya’s AUM stands at $244 billion and Tanzania’s at $105 billion—the growth trajectory suggests increasing confidence in formal investment products and the potential to tap a wider base of household savings. Experts say that as trust in the system grows, the scheme could broaden participation across income levels, including rural and informal households.
The Okusevinga pilot will test platform functionality, registration, transactions, and consumer safeguards, with authorities emphasizing cybersecurity and operational resilience. If successful, officials say, the scheme could improve household financial resilience, increase the pool of domestic savings, and provide a more stable funding source for government borrowing, reducing reliance on costly external debt.
Ease government’s pubic debt
Economists note that channeling household savings into government securities could lengthen the maturity profile of public debt, smooth funding pressures, and reduce vulnerability to global financial shocks. For households, even small, regular investments could help build buffers against income volatility and reduce dependence on informal coping mechanisms.
Uganda’s approach is being closely watched across Africa, where informal savings dominate despite rising financial inclusion. Analysts caution that sustained success will depend on trust, financial literacy, and consistent returns.
For now, the Okusevinga pilot represents a significant experiment in formalizing household savings and mobilizing domestic capital, with the potential to reshape Uganda’s investment landscape and serve as a model for other African nations seeking to deepen capital markets while fostering inclusive economic growth.
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