Ugandans are saving, but many are yet to translate those saving habits into concrete long-term financial plans, creating an opportunity for financial institutions to encourage a stronger culture of goal-based investing.
The FinScope Uganda 2023 survey found that 60 per cent of adults aged 16 and above were saving, with regular expenses identified as the most common main reason for saving. At the same time, more than seven in 10 respondents did not have concrete long-term financial plans.
It is against this backdrop that Britam Asset Managers Uganda Ltd is promoting early financial planning through KidNest, a savings and investment solution that allows families to invest for children while involving them in setting financial goals.
Ms Peace Gakwaya, Chief Executive Officer of Britam Asset Managers Uganda Ltd, said early investment could help families move beyond saving for immediate needs towards planning for objectives that may take years to achieve.
“Starting an investment for a child creates an opportunity to plan for those goals early and give contributions time to benefit from compounding,” Gakwaya said.
She said the approach could also help introduce children to financial concepts before they begin making independent financial decisions.
“It also opens the door to conversations about financial choices and discipline,” she said.
“Our ambition is to help build an investment culture in Uganda where children grow up understanding how to plan, invest consistently and assess their progress.”
The initiative encourages families to attach investments to identifiable goals. A child may begin by saving towards a toy, bicycle, phone or a particular skill, while longer-term goals could eventually include education or starting a business.
The idea is to make financial planning more tangible for children by allowing them to understand what money is being set aside for and track progress towards the target.
The distinction between saving for immediate expenditure and investing towards longer-term objectives is central to the initiative.
While the FinScope findings show that a significant proportion of Ugandan adults save, the absence of concrete long-term plans points to a potential gap between setting money aside and deliberately building financial resources for future needs.
Britam says products such as KidNest can help families link regular financial decisions to specific aspirations.
The solution allows an initial investment of shs20,000, followed by optional contributions of shs10,000 or more, without requiring investors to follow a fixed contribution schedule.
This flexibility is intended to allow families to invest according to their available resources while maintaining a longer-term objective.
The investment is made through Britam’s Money Market Fund, which invests in a diversified portfolio of short-term, interest-bearing instruments. The fund seeks capital preservation and returns, although capital preservation is not guaranteed.
There is also no lock-in period, allowing investors to access their funds when necessary.
The broader objective is to make financial education part of family life rather than something introduced only when children become adults.
Parents, grandparents, guardians and other well-wishers can contribute towards a child’s investment, while gifts and allowances can also become opportunities for children to participate in setting and pursuing financial goals.
Britam’s “Get Ready for Bigger” campaign, under the theme “Bigger Dreams”, seeks to reinforce the message that larger financial goals can be approached progressively.
For families, this means beginning with an amount they can manage, identifying a goal and building towards it over time.
For children, the process can provide an early introduction to concepts such as goal-setting, delayed gratification, consistency, compounding and investment.
Gakwaya said the broader ambition is to contribute to a change in how younger generations approach money.
“Our ambition is to help build an investment culture in Uganda where children grow up understanding how to plan, invest consistently and assess their progress,” she said.
