Collective Investment Schemes Show Strong Growth
Uganda’s latest Capital Markets Authority (CMA) quarterly bulletin highlights improved performance in the country’s capital markets, with notable growth in the period ending September 2024.
According to the report, assets under management (AUM) by Collective Investment Scheme (CIS) managers reached Ugx 3.51 trillion (US$ 945.4 million) in September 2024, marking a 10.5% increase from Shs 3.18 trillion (US$ 855.7 million) in June 2024.
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On a yearly basis, AUM surged by 54.1% from Shs 2.3 trillion (US$ 613.4 million) in September 2023. The number of funded CIS accounts also climbed to 103,950 in September 2024, up 12.8% from 92,165 in June 2024.
This rise in AUM and account numbers is largely attributed to increased investor awareness of CIS benefits, midterm access to National Social Security Fund savings, some of which have been invested, and robust regulatory protections that enhance investor confidence.
CMA CEO Josephine Okui Ossiya noted during the bulletin’s release that more Ugandans are embracing pooled savings as an investment vehicle.
“Our regulatory framework has built trust among investors, who are confident in the security provided by regulated products like CIS. I encourage more Ugandans to consider investing in CIS,” she stated.
A regional comparison shows that Uganda’s CIS sector is still developing. In terms of GDP at constant prices (US$ billion), Uganda stands at $46.5 billion, with Kenya leading at $99.9 billion, followed by Tanzania at $70.6 billion.
The average balance per account (US$) in Uganda is 9,095, compared to 1,639 in Kenya and 4,439 in Tanzania.
Experts suggest that a regulatory sandbox could enable the CMA to introduce more innovative products, enhancing options for savings and investments.
