Absa Bank, Partners Show Mbarara Traders How to Tap into e-commerce Opportunities, Minimize Online Fraud Risks

As technology continuously evolves, trade in goods and services is steadily moving online. Absa Bank Uganda collaborated with DHL Express Uganda and tax consultancy firm Birungyi, Barata & Associates to sensitise traders in the Western Uganda city of Mbarara on the opportunities ecommerce presents for their Micro, Small and Medium Enterprises (MSMEs) as part of the financial institution’s ongoing ‘Beyond Borders Road Show Program.’

Officials from Absa Bank also tipped hundreds of businesspersons that filled the meeting hall at Hotel Triangle on ways of minimizing risks associated with online banking and ecommerce, especially as unscrupulous fraudsters target unsuspecting people making transactions. The icing on the cake was a discussion on the several products that the bank and its partners have put in place to support businesses to grow as well as tap into ecommerce opportunities.

The team from Absa included Head of Enterprise Banking Doreen Rutazaana, Head of Affluent Banking Winfred Ssembatya, Regional Manager for Albertine Kevin Charles Ssemambo and Mbarara Branch Manager Nicholas Turyamuhaki.

E-COMMERCE OPPORTUNITIES

According to the Uganda National E-commerce Strategy projection, e-commerce is projected to grow to a market volume of US$ 421 million by 2025. By the same period, the strategy also projects that user penetration – or the percentage of the country’s population buying or selling online – will reach 29.1 per cent. At the global level, data platform Statista estimated retail e-commerce at $5.8tn in 2023 while capital markets firm Market Watch expects international e-commerce to grow to $47.7tn by 2030.

Arnold Musoke from DHL Express emphasized the “potential” for traders to transact beyond borders. Musoke urged the traders to leverage of new technologies to be able to expand their market reach beyond borders.  “Use your phones as much as you can to make money,” he said, urging the men and women behind thriving Mbarara SMEs to use social networks such as Whatsapp and Instagram for marketing.

On this e-commerce journey, Absa bank assured traders they would have a key partner. Doreen Rutazaana, the head of Enterprise Banking at Absa Bank, said the financial institution would help traders “plug into” available digitization opportunities and be able to deal with competition that comes with new technologies.

READYING BUSINESSES TO COMPETE IN E-COMMERCE ERA

Describing SMEs as “the future of our country and business.” Engaging in the various forms of ecommerce – business to business, business to consumer, consumer to business and consumer to consumer trading – Musoke told the traders, requires a high level of transparency “because the products you send across the border go through different hands.”

This call for transparency speaks to the need for businesses to have a certain level of stability in terms of cash flows. A number of existing Absa Bank products are meant to help distributors, exporters contractors and suppliers.

These value chain banking and trade financing products come in handy for businesspeople who are worried that delayed payments may make them run out of operational cash, and in other cases help them meet the costs of loans interest. The products are also designed with international trade risks such as cases of traders being required to send goods before being paid in mind.

Absa Bank officials assured traders of other products such as bid guarantee for contracts, secured performance guarantees and contract financing of up to 80 per cent, unsecured distributor financing of up to Shs2bn depending on capacity (cash conversion cycle).

To support smooth business operations, banking officials also offered traders key information on vehicle and asset financing of up to 80 per cent in collaboration with CFAO Motors and other auto dealers. They also explained the several bancassurance products available to guard businesses against risks of fire, lightning, floods, and theft on top of medical and life insurance products. Also on offer are mortgage products to help businesses purchase or construct buildings for operations and renting.

Besides these products, Absa has over the years been offering currency monitoring and exchange services, offering one of the best exchange rates across several currencies on its currency markets platform. The rates are even more favorable for those exchanging over $5000.

To be able to access and benefit from these products, Absa Bank’s Rutazaana emphasized that one must have an account that has been active with the bank for up to three years or more. One must also have a good credit report. In some cases, small business owners can have their SACCO and mobile transaction reports reviewed but a running account with the bank would make a big difference.

For their part, tax consultancy firm Birungyi, Barata & Associates emphasized the importance of formalization of SMEs if they are to be part of and benefit from ecommerce opportunities. Acquiring Tax Identification Numbers (TINs) accessed via the Uganda Revenue Authority (URA) portal would be an important step in formalization. They also advised traders to seek the help of tax consultants as well as recognized clearing and forwarding agents.

Without proper sensitization and help from tax experts, businesspeople have previously confused Electronic Fiscal Receipting and Invoicing Solution (EFRIS), calling it a new levy. Birungyi, Barata & Associates reiterated that EFRIS was not a new tax but rather a tax collection system to ensure transparency and proper record keeping.

The latter is important because it can help when it comes in appeals on set tax amounts in case a trader or business files an appeal. The tax consultancy firm educated SMEs on their rights as tax payers, including being able to object to a tax assessment and having their voices heard in the Tax Appeal Tribunal.

ATM & ONLINE SAFETY

Rutazaana explained the measures the bank has put in place to create “a robust system” meant “to protect and ensure that we reduce, minimise, make zero risk” of losing money to online fraudsters. Such measures include limiting transactions to Uganda and locking when one changes location without notifying Absa Bank.

“If after this conference you travel, youare going down to Macedonia and you try to use your card, you try to use your phone, [you won’t succeed]. Why? Because according to us, we are not aware you are in Macedonia… Because that is at risk of a fraud,” the head of enterprise banking explained.

“And yes, as a customer, you’ll be frustrated, but you have to notify Mbarara. You can call our head office or Mbarara here, the branch, and they are able to notify us that you are in Macedonia, then we will open the card.”

The bank has also put a minimum of the amount of money one can withdraw “which reduces the risk.” The bank can also be able to trace who made the transactions. But clients must be able to guard their cards and the information thereon as well as the passwords.

“But what is your role in this? Your role is that you ensure that that card, it is with you. Another thing we have is that at the bank, we are able to trace how the money moved and who moved it. We have all that in place,” Rutazaana further explained.

“We can tell what happened. And we have seen instances where if it’s a husband’s money missing and it was an agent fraud. W will actually see videos of the wife picking the money, videos of the son picking the money, and the daughter. So, in all this conversation, it is that the card is an individual’s card. Guard it jealously.”

Rutazaana also urged caution in use of open Wi-Fi and to be careful with careless approval of requests on untrusted websites. “For those using online banking, for instance, you’re traveling from the U.S. Usually there is a stopover in Dubai before your next flight. So, you  are at an airport and you decide to go to WhatsApp and use open Wi-Fi. Now, open Wi-Fi, those hackers can access,” she noted.

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