For the first time in Uganda, government bonds will be bought using Mobile Money

The Ugandan Cabinet on Monday approved the use of Mobile Money to invest in government bonds.

The country's citizens will now be able to invest in treasury bills and bonds for as low as UGX100,000 using mobile money services.

The move is aimed at enhancing financial inclusions and economic growth.

The Cabinet proposed an interest rate of 18% -- a rate higher than what commercial banks offer by 13%.

The government hopes the move will enhance 'distribution capacity of Government securities with the ability to reach out to individual retail investor especially those in rural areas.'

The decision, according to the Cabinet statement issued on Tuesday, will reduce the cost of domestic debt by 'widening the scope of investors reduces the dependence on a few players such as commercial banks, offshore players and institutional investors which tend to bid highly in the auctions given that Government has a limited choice'.

For retail investors, there will be easy to access government securities without 'physically delivering bids to their banks'.

With about $1.3bn collected as remittances from labour market abroad, government hopes accessing treasury bills on Mobile Money will allow Ugandans in the diaspora to 'save and earn a good return while developing their country.'

In 2018, Bank Of Uganda revealed that mobile money services recorded UGX 63.1 trillion in mobile money transactions, a significant increase from UGX54 trillion in 2017.