Xeno technologies, an investment firm, is eyeing to tap into customers' savings sitting at several commercial banks with intent to help them accumulate wealth.
The company plans to leverage on the huge uptake of mobile platforms to provide investors with less risky investments portfolios that they may be comfortable to invest in.
Currently, saving accounts at commercial banks attract a dismal interest of less than three per cent, while interest on fixed deposit accounts ranges 7-17 per cent according to information from Bank of Uganda.
Bankers, however say, the saving rates in the country are still too low, estimated at about 5 per cent of Gross Domestic Product (GDP).
According to Aeko Ongodia, founder and chief executive officer at Xeno, the perception that Ugandans have a poor saving culture is due to lack of better investment opportunities and professional guidance to the population.
“People have the money but they have not been provided with an alternative to invest. For instance, NSSF [National Social Security Fund] has only 500,000 [active savers], so where are the others keeping their money?” he explained.
Uganda has a working population of about 17 million people. However, less than 15 per cent of these people are part of a retirement benefits scheme.
FinTech solutions such as Xeno comes at a time when most commercial banks are planning to increase their investment in digital solutions. Some commercial banks for instance Stanbic, announced their intentions to merge or close some branches last year.
FinTech solutions such as MoKash have seen a significant number of Ugandans channel their savings onto their mobile, due to its convince. In August last year, MTN Uganda and Commercial Bank of Africa reported that they had released Shs 30 billion to subscribers through the Mokash platform. This has further pilled pressure on financial institutions to innovate or risk losing out.
Using the Xeno platform, clients can invest for various financial goals such as retirement, wealth, education, house, emergencies, income among others.
The platform helps clients to set targets for each of their investment goals such as retirement after assessing their risk profiles.
“It helps you to estimate how much retirement is going to cost you then work backwards to recommend what you need to save and invest to meet that goal,” Ongodia explained.
Xeno is the first FinTech company in Uganda to be licensed by Capital Markets Authority as a Fund Manager to use technology and deliver professional investment guidance and management.