Kenyan pension manager enters Ugandan market

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Enwealth Financial Services, a pension administrator, has decided to venture into Uganda in a market dominated […]

Enwealth Financial Services, a pension administrator, has decided to venture into Uganda in a market dominated by the National Social Security Fund (NSSF), to which employers/employees are expected to contribute on a monthly basis.

“We have keenly observed the pension industry in Uganda growing steadily under a strong regulatory regime. We are therefore committed to introducing sustainable retirement investment options that provide a regular cash-flow during retirement such as Income Drawdowns, Diaspora and Expatriates fund, and Post-retirement Healthcare fund to guarantee security in retirement,” Enwealth CEO, Simon Wafubwa when officially announcing their entry after getting approvals from the Uganda Retirement Benefits Regulatory Authority (UBRA).

Founded in Kenya during 2011, Enwealth, also offer pension retirement training and consultancy services. The company currently manages pension assets worth over UGX2 trillion ($544 million) and servicing over 120 clients. Over the last eight years, Enwealth says they have been leading in innovative services and impacted more than 40,000 people in 12 countries within Africa.

Martin Nsubuga, who heads URBRA said, “We see a very vibrant, robust and well regulated sector with increased coverage and asset portfolio. With more players joining the market, we will see more products suited for markets that have not had access to retirement benefits before. We are also adapting to modern supervisory tools to ensure that people’s savings are secure.”

The firm joins nine other pension administrators that are currently licensed by URBRA as a result of the ongoing reform agenda to liberalize the sector.

According to URBRA, the pension sector covers only about two million of Uganda’s population which is less than 10 per cent of the population. The pension sector is currently contributing more than nine per cent to the country’s GDP, and is projected to contribute a higher share in the near future.

The sector’s portfolio is now growing with NSSF recording UGX9 trillion (nearly $2.5 billion) in March 2018 from UGX3 trillion at its inception. Other schemes are holding nearly UGX1.6 trillion.

Wafubwa said Enwealth’s key target market will be the small and medium enterprises which are currently underserved. The SMEs employ over 2.5 million people; but due to the levels of income and lack access to information, majority of them do not have any retirement plan.

Enwealth says it has tailor-made products for this market as well financial literacy programmes to encourage the population to save more and secure their financial security in retirement.

Notably, the 2016 World Bank World Development Indicators report noted that Ugandans save around five percent of their monthly earnings. This was the lowest record in comparison to other countries in the East African region whose records stood at 23 pc for Kenya, 13 pc for Tanzania and 18 pc for Rwanda.

Wafubwa said, “Since the sector started the process of liberalization, we have seen more service providers invest in the market and more pension schemes formed. All these efforts have gone a long way in improving the saving levels of Ugandans.”

With the expansion to Uganda, Enwealth joins a number of other financial sector players including banks and insurance companies seeking to establish solid presence across all the markets in East Africa.

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