More than half of Uganda’s mobile money agents have reported the highest incidents of fraud among the eight countries studied, a new report reveals.
The report by Helix Institute of Digital Finance and Financial Sector Deepening Uganda (FSDU) says Uganda’s fraud rate stands at 53 per cent, closely followed by Tanzania at 42 per cent and Kenya at 22 per cent.
The Agent Network Accelerator Survey (ANA) report on Wednesday at Sheraton Kampala Hotel is based on a research carried out on 2,288 mobile money agents interviewed across the country.
“In spite of provider and regulator efforts, the percentage of agents who report having personally or through one of their employees experienced fraud has in the last year doubled since 2013 and the levels are higher than in any other ANA country,” the report reads in part.
Despite these challenges, the report faults the country for the low regulatory compliance saying on average, only two per cent of customers show an ID when performing a transaction.
According to the report, the Uganda digital finance market is majorly split between two players. It also highlights that there has been a drop in exclusivity compared to 2013 as mobile money agents now serve more than two providers.
However, it notes that the level of agents assisted over the counter transactions is still high for mobile network operators.
It highlights that since the Airtel-Warid merger in 2013, the Airtel combined market share presence has increased from 31 per cent in 2013 to 42 per cent in 2015.
As a result, the market leader MTN’s share of market presence dropped from 63 per cent in 2013 to 57 per cent in 2015, and the shares of other providers combined dropped from five per cent to one per cent.
The MTN senior mobile money operations manager, Ms Juliet Tumuzoire, says fraud is also still prevalent in the traditional banking system. She attributes the growth in fraud to inability of mobile money agents to use new technologies.
“A percentage of agents are not technologically savvy. They seem to trust anyone very fast and more so there is an element of greed as they are willing to sell their right over greed,” Ms Tumuzoire said.
She says companies are working closely with police under the fraud committee for technology service providers to support their users.
Internally, Ms Tumuzoire says, the remedy is in doing more awareness among mobile money subscribers and agents.
Mr Richard Yego, the acting Airtel money director, says most agents are not aware of the fraud incidences and how they can impact their business.
“Technological advancement in mobile money services has given fraudsters a leeway to rob agents. As we innovate, fraudsters take advantage of the new products launched and rob the unsuspecting public within the first weeks,” he says
Mr Benon Katende, in charge of regional channels for Finca Africa, says they need to strengthen the onboarding process because that is the entry point. He adds: “They should invest a lot of resources in analytics which are able to pick up a lot of things like suspicious patterns, abnormal transactions, and registrations. They need to strengthen their internal procedures in terms of customer data, laws and integrity.”
Earlier this year, Parliament passed the Financial Institutions Act Amendment 2016, which authorised banks to appoint agents. The Act is yet to be operationalised.