The total number of funded CIS accounts at the end of December 2024 was 113,445, up from the 101,637 investor accounts at the end of the previous quarter, an increase of 11.6 percent.
Uganda's assets managed under Collective Investment Schemes (CIS) expanded by 3.85 Trillion Shillings (1.05 Billion Dollars) as of the end of December 2024.
This is the first time Assets Under Management (AUM) exceeded the equivalent of 1 Billion US Dollars, marking "a milestone in Uganda's journey to mobilize savings through CIS", says the Capital Markets Authority (CMA).
According to the latest update by CMA, the quarterly growth of 9.6 percent from the end of September shows how Ugandans have taken up CIS as a formidable form and investment.
On an annualized basis, the update indicates that AUM expanded by 63.2 percent from 2.357 Trillion Shillings at the end of December 2023.
The total number of funded CIS accounts at the end of December 2024 was 113,445, up from the 101,637 investor accounts at the end of the previous quarter, an increase of 11.6 percent.
This is also a big jump (60.29 percent) from 70,771 accounts recorded at the end of 2023.
CMA says robust regulatory safeguards that have cultivated investor trust and confidence, is partly to do with this growth.
It has also noted billions of shillings withdrawn from the National Social Security Fund by members under the NSSF Mid Term Access, channelled into CIS, to take advantage of the high interest rates, but also ease of access.
Most CIS has been giving annual interest rates of between 10.5 and 12 percent, which experts say is among the highest rates of return on investment in the country.
Another advantage of the scheme is that while it gives the investor or saver the ability to monitor their fund's growth every time, it also allows the withdrawal of the funds at any time, either in a lump sum or in bits, unlike at the NSSF.
"Increased investor awareness of the advantages of investing through CIS have contributed to the growth in AUM and CIS accounts."
Additionally, the licensing of seven CIS managers has also been a key driver of the growth.
These managers are Britam Asset Managers Uganda Limited, ICEA Lion Asset Management Limited, Sanlam Investments East Africa Limited, SBG Securities Limited, Old Mutual Investment, Cornerstone Asset Managers and Xeno Technologies Uganda Limited.
A look at the region shows that Kenya had the highest level of AUM at 2.44 Billion while Tanzania's stood at US 1.05 Billion, much the same as Uganda.
However, while Uganda has the lowest amounts, it contributes most to the country's GDP at 2.3 per cent followed by Kenya with 2.2 and Tanzania with 1.5 percent of GDP.
In Kenya, there are 1,299,300 accounts while Tanzania has 361,254, which shows that Uganda's 113,445 accounts on average hold larger amounts than those in the other two countries.
In Uganda, an average saver has 9,255 Dollars (34 Million Shillings) in their account as of December 2024, a growth from 33.4 million at the end of November.
On the other hand, in Kenya, the average size of an account is 1,882 (6.822 Million Shillings) and in Tanzania, it is 2,910 Dollars or 10.7 Million Shillings.
However, the number of Ugandans who have taken advantage of this relatively new investment platform remains lower than in other countries.
Commenting on the developments, J said the regulatory framework has boosted investor confidence by ensuring protection when the Authority, stated:
“We continue to see remarkable growth in CIS AUM as more Ugandans recognise the advantages of investing in pooled savings vehicles," said Josephine Okui Ossiya, CEO of the Capital Markets Authority.
According to her, the strong regulatory framework has boosted investor confidence by ensuring protection when investing in regulated financial products like CIS funds.
"We urge Ugandans to invest only in regulated financial products or engage with licensed entities to safeguard and grow their hard-earned savings.”
