Reactions to the Bank of Uganda's new rule requiring mobile money agents to use a valid National Identity Card to confirm a customer's identity before processing withdrawals above one million shillings have been conflicting. 

Although many applaud the action as a start in the right direction to combat cybercrime, experts caution about possible difficulties with identification verification. 

The new rules from the central bank are effective immediately and require all clients transferring more over one million shillings to show legitimate National Identity Cards to mobile money agents at the time of the transaction.
 

This change in policy is said to be a reaction to the rising number of cases of cybercrime and online fraud utilizing mobile money networks. 

The Bank of Uganda has seen an increase in fraud and scams involving mobile money over the last several years. 

Cybercriminals have taken use of the system to perpetrate cybercrime; they frequently collaborate with dishonest mobile money agents. Closing these gaps and guaranteeing safer transactions are the goals of the new rule. 

Cybersecurity specialist Emmanuel Chagara advises against depending too much on National Identity Cards for authentication, despite the perceived advantages.
 

"While the central bank believes this will be a significant step in combating online frauds and scams, there's a risk of forgery with National Identity Cards," Chagara said.

He noted that the effectiveness of the new regulations would depend on the rigor of ID checks and the reliability of the national identification system.

The Bank of Uganda's 2020 Financial Capability Survey revealed that only 20% of Ugandans save their money in deposit-taking financial institutions, while 15 percent save on their phones using mobile money.

The survey also showed that 45 percent of Ugandans rely on Village Savings and Loans Associations, and another 45% use savings boxes at home. Given these statistics, the central bank's focus on mobile money regulation is crucial.

"While the central bank believes this will be a significant step in combating online frauds and scams, there's a risk of forgery with National Identity Cards," Chagara stated. 

He pointed out that the thoroughness of ID checks and the dependability of the national identification system will determine how successful the new restrictions were. 

Only 20% of Ugandans store money at deposit-taking financial institutions, according to the Bank of Uganda's 2020 Financial Capability Survey, with 15% storing money on mobile money apps on their phones. 

According to the report, 45% of Ugandans utilize savings boxes at home, while another 45% rely on Village Savings and Loans Associations. In light of these figures, it is imperative that the central bank concentrate on regulating mobile money.