Mobile money was introduced in Uganda in 2009. It is among the fastest-growing industries in Uganda. Most countries are moving towards cashless transactions making mobile money one of the profitable businesses. Some of the money service providers available in Uganda include MTN, Airtel, Uganda Telecom, Africell, Micro-Pay and M-Cash. In this article, we will show you how to start a mobile money business in Uganda.
What is Mobile Money?
Mobile money is the electronic means of sending, storing and receiving money using electronic devices like phones and tablets. You can start a mobile business and work as an agent.
How Do Mobile Money Agents Earn in Uganda?
You can start a mobile money business in Uganda as an agent and earn a commission. Mobile money agents in Uganda earn commission for facilitating transactions such as deposits and withdrawals for their customers, paying airtime and bundles for customers, processing bill payments and registering new mobile money users.
How Profitable is Mobile Money Business in Uganda?
Is mobile money profitable in Uganda? Mobile money business in Uganda is profitable if you follow the right strategies in starting and running the business. The level of profitability will also depend on factors such as the startup capital, location, number and types of transactions in a given day/week/month.
If you haven’t registered your business, find out how to register a company in Uganda.
How Much Money Do You Need to Start Mobile Money Business in Uganda?
The amount of money you need varies based on the mobile money provider and whether you apply directly to the mobile money provider or through master agent/aggregator. The intended size of your business will also be a factor. For instance, will you be working alone or you intend to employ someone or people to work for you? Will be renting a business space or you will use a kiosk or building that you or your family owns?
How to Get a Transaction Line as a Master Agent or Aggregator
You can work as an aggregator or a master agent. An aggregator is authorized to recruit mobile money agents. Master agents purchase and manage e-money from Mobile Network Operators and then sell them to agents.
To become an aggregator or a master agent, you need to fill in an agent Agreement form, exclusivity agreement form and agent application form. In addition, you will need training and branding for your business.
Agents are paid commissions, and the commissions depend on the master agents. Agents have to forego 10% of their income to the Uganda Revenue Authority.
As an aggregator or master money agent, you are responsible for recruiting agents into your territory. You will need to go through the bidding process by presenting an identity card, get a recommendation letter from the local council, and fill in an application form. You will need to make a deposit of Ush 80,000 and have a starting float of at least Ush 2,000,000.
Duties of a Mobile Money Agent
- Registering mobile money customers
- Depositing money into mobile accounts for the registered mobile money customers
- Processing cash withdrawals by registered mobile money customers
- Selling airtime to customers
- Complying with mobile money regulations
- Customer education
How to Start MTN Mobile Money Business in Uganda
To work as MTN mobile money agent in Uganda, you need to meet the following requirements.
- Be a registered limited company or sole proprietor and your business must have been in existence for at least one year
- Original and copies of identity card or passport for the company directors
- Have permanent or semi-permanent physical premises from where to operate
- Have a certificate of business incorporation
- Letter of introduction for the Local Council 1 (LC1)
- Contact details of your company
- Have at least three months of business bank accounts
- Have a copy of articles of association or memorandum of association
- Proposed outlets for inspection by Telecom’s regional representative
- Initial startup capital investment of Ush 1,500,000
Get MTN Xtra Float for business continuity This is a service that MTN Mobile Money agents can use to borrow float when their float is depleted and still have customers to save. You can now get MTN Xtra Float worth UGX 50,000, 100,000 and 250,000 at a fee of UGX 300. MTN Xtra Float has to be paid back in 48 hours. There’s a penalty of 3,000shs charged against your commission if you fail to pay. To get MTN Xtra Float, you should Simply dial 1655# and follow the steps.
How to Start Airtel Mobile Money Business in Uganda
To become an Airtel money agent in Uganda, you need to meet the following requirements.
- Proof of residence
- Recommendation letter from LC1
- Passport size photo of the applicant
- Subscriber registration form
- Trading licenses
- Subagent application and registration forms
- Startup capital of Ush 2,000,000
How to Become M-sente Agent in Uganda
Uganda Telecom offer mobile money service called M-sente. Requirements for M-sente agent business are the following.
- Certificate of registration or Trading license.
- National ID
- One passport photo size
- Fill and sign the agent contract
- A minimum deposit of at least UGX 300,000
What You Need to Start a Mobile Money Business in Uganda
Apart from the requirements that you need to meet to register as a mobile money agent or aggregator, you will also need the following to run your business comfortably.
- Have two transition lines. You should have MTN and Airtel lines because they have a large market share.
- Have a mobile phone with dual features to operate two lines.
- Rent a stall or a room. You need a secure place where you can operate your business. Ensure that it is visible by foot traffic.
- Have a transaction book
- A secure and lockable desk to keep your money
Some of challenges to expect in mobile money business in Uganda include competition from well-financed competitors, theft, fake money, network problems in some areas of the country, conmen, dishonest workers, etc.
How to Start a Profitable Mobile Money Business in Uganda
To start a mobile money business in Uganda, you need to understand how mobile money works and how you can succeed in this business. This section will provide you with useful tips you need to venture into the business.
Draft a Mobile Money Business Plan
The success of any business depends on how well it is planned. You need to do market research and find out the money services in high demand and those you can provide. Consider the security of the area you intend to operate your business, the market share, competition, availability of customers, cashflow projections, risks and strengths of the business. To know how to about writing a successful mobile money business plan in Uganda, read our previous article on what a business plan should include. Alternatively, you can hire a professional to help you.
Choose a Good business Location.
Mobile money business works well in areas with high influx of people like in towns, near institutions like colleges and hospitals. Such an area will maximize your profits. The more customers you serve, the higher your commissions.
Get Business Permits and Licenses
You need to secure business licenses to operate a legal mobile money business in Uganda. You need to get a certificate from the Uganda Revenue Authority for tax purposes. You may also need a business trading license from authorities.
Get Started and Advertise Your Mobile Money Business
Once you have secured the necessary business permits and licenses, you can launch your business. Provide quality customer service, and your customers will keep on coming back and refer more customers to your business. You can advertise the business using posters and business cards.
Final Word on How to Become a Mobile Money Agent in Uganda
The mobile money business is a profitable business in Uganda. Besides, you can provide other income-generating services like selling sim cards, airtime, soft drinks, and sim card registration. With the growing demand for mobile banking, this is a business you are unlikely to make losses with a suitable business location.
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