Uganda’s Mobile Money Success Has Created New Risks, Business Leader Tumushabe Warns in Milan

MILAN, Italy – Uganda’s mobile money revolution has transformed millions of lives and become one of Africa’s biggest financial inclusion success stories, but it has also exposed users to new dangers, including predatory digital lending, debt traps and fraud, Ugandan entrepreneur and investor Sharon Tumushabe has said.

Speaking during a panel on technology in Africa in Milan, the Chief Executive Officer of Legacy Hills Investments said Africa’s leap into digital finance had brought enormous benefits but also created vulnerabilities that policymakers and industry players can no longer ignore.

“Access without safeguards is not progress. It is exposure,” Tumushabe said on Friday, warning that instant digital lending apps have left many borrowers trapped in debt and subjected to aggressive collection practices.

Her remarks come as Uganda’s mobile money industry continues to expand rapidly.

According to the Bank of Uganda, active mobile money accounts rose by 166 percent to 33.7 million by March 2025, while transaction values and volumes increased by 25.5 percent and 20.9 percent respectively.

The country now has more than 34 million active mobile money subscribers, far exceeding the number of conventional bank accounts.

Tumushabe said mobile money had enabled ordinary Ugandans to bypass traditional banking systems altogether.

“A market vendor in Kampala who never had, and never will have, a bank account now takes payments, pays suppliers and saves, all on a basic phone,” she said.

“The leapfrog was not the technology. It was that a whole informal economy got financial infrastructure without ever touching a bank.”

She said Uganda’s experience showed how technology could be designed to serve the most excluded populations, citing local fintech innovations that allow people to save and invest through feature phones and USSD technology.

“We jumped from cash under the mattress to goal-based investing on a phone that costs twenty dollars,” she said.

“A boda rider in Kampala can begin building a portfolio the same way a banker in London does.”

However, she cautioned that the same digital infrastructure had also fuelled a surge in borrowing and financial scams.

“We solved exclusion from credit and accidentally created a new kind of exclusion from dignity,” she said, adding that young people and women had been particularly affected by debt traps, blacklisting and social engineering fraud.

Tumushabe argued that developed economies could learn from Africa’s real-time, low-cost payment systems and inclusive design philosophy.

“We were forced to build real-time, low-cost, inclusive-by-default systems because we had no luxury of legacy,” she said.

“Mature markets design for the customer who already has everything. We design for the one who has a phone and nothing else, and it turns out that is better engineering.”

Her remarks highlighted how Uganda’s mobile money ecosystem, once seen merely as a solution to financial exclusion, is increasingly being viewed globally as a model for innovation—while also underscoring the need for stronger consumer protection as digital finance becomes deeply embedded in everyday life.