By Mark Kawalya
The informal sector accounts for the largest percentage of the Ugandan workforce currently standing at a high of 85%. Most of these are hardworking self-employed locals who carry the weight of the economy on their shoulders. However, they face several bottlenecks when it comes to joining existing formal pension plans. According to Livingstone Mukasa, founder and CEO of Mazima retirements, when the company opened shop in the Ugandan market, only 2 million people were covered by pension players. A deficit of up to 15 million people were not catered for.
It is for this reason that many of the people in the informal sector who are not prudent retire into a life of poverty since they virtually have nothing to fall back onto after years of working.
According to Mukasa, one can start saving as quickly as they can deposit the $3 membership fee and how much they save is determined by the client’s ability. Recently the company partnered with Telecom giant MTN to facilitate a digital savings infrastructure that would enable clients to remit their Mazima savings via Mobile money.
Mr. Mukasa revealed that Mazima retirement plan “Mazima had finally made it to MTN Mobile Money Main Menu. This is a giant leap to help Ugandans have access to long-term savings, now is a good time to join,” he said giving subscription details “dial *165*6*5# to access the service.” He also gave confidence to would-be savers by saying that the fund is protected from bankruptcy by law, so their savings are in secure hands.
The firm was licensed by the Uganda Retirements Benefits Bureau Regulatory Authority in 2016 and is giving rise to a generation of savers who will no longer be dependent on their children for their sustenance when they age.
The largest portion of clients that are saving with the fund are between the ages of 30-40 years with an equal membership of male and female. Typical clients are boda boda riders and membership goes right across the spectrum to skilled workers such as doctors and engineers. Mazima is home to the illiterate, the educated, the skilled and the unskilled.
The firm has a framework that guides it on how to invest the funds remitted and pays annual interest on members’ contributions. Makasa believes although they are making strides, more than 40% of Ugandans still keep their savings under mattresses making it necessary to change this narrative.
