KAMPALA, UGANDA – Uganda’s financial institutions are turning to digital Know Your Customer (KYC) verification through national ID, a move set to boost financial inclusion and security.
The Bank of Uganda (BoU) reports that 74 financial institutions now have access to the National Identification and Registration Authority (NIRA) database, including commercial banks, microfinance institutions, and insurance companies.
This development is in line with the Registration of Persons Act 2015, which requires a national ID card or number for access to financial services. Implemented since 2020, this provision enables seamless KYC checks, enhancing security and combating financial fraud.
Complying with digital KYC provisions enables secure and seamless access to financial services, drives financial inclusion in the country by providing verified identities, and reduces fraud.
In a related move, the BoU issued a directive requiring ID verification for transactions exceeding one million Ugandan shillings (US$260). Although met with criticism, this measure aims to strengthen financial security.
Uganda’s neighbor, Somalia, has also launched a biometric national ID system, supported by the World Bank. This initiative aims to provide legal IDs to 85% of Somalis, enhancing their financial opportunities.
The trend of coordinating national ID systems with the financial sector is gaining momentum in East Africa, promoting financial inclusion and security. International organizations such as the World Bank are supporting national ID system implementation.
As Uganda and Somalia make strides in digital KYC and national ID systems, the region moves closer to enhanced financial inclusion, security, and global economic integration.
