The Deposit Protection Fund of Uganda has grown its assets to about Shs2.3 trillion as the government considers doubling the insured deposit limit from Shs10 million to Shs20 million.
The Fund held about Shs470 billion when it became operational in 2017. Its asset base has therefore increased nearly five-fold over the past nine years.
Finance minister Henry Musasizi reviewed the Fund’s performance and future plans during a meeting with its board and management.
Musasizi reaffirmed the government’s commitment to maintaining a stable and resilient financial system.
Fund reports strong financial position
DPF board chairperson Ben Patrick Kagoro said the institution remained financially sound and aligned with government priorities.
He said the growth in assets had strengthened the Fund’s capacity to protect depositors and support stability in the financial sector.
The government established DPF to protect money held by depositors in licensed financial institutions.
The Fund compensates eligible depositors when a covered bank or credit institution closes and cannot repay their deposits.
Licensed banks and other financial institutions covered by the scheme contribute to the Fund. Their contributions depend on the value of their deposits and their risk profiles.
Current cover protects most deposit accounts
DPF chief executive officer Dr Julia Clare Olima Oyet said the current insurance limit is Shs10 million per depositor per bank.
She said this amount fully covers 98.53 percent of all deposit accounts in Uganda.
The cover applies separately to each depositor at each financial institution. A depositor with accounts in more than one covered bank may therefore receive compensation from each institution, subject to the applicable limit.
Dr Olima Oyet said the Fund would soon engage the Ministry of Finance, Planning and Economic Development over a proposal to increase the limit to Shs20 million.
“DPF is a strategic institution designed to strengthen confidence in the financial sector, thus contributing to Government’s tenfold growth agenda,” she said.
Government welcomes proposed expansion
Musasizi welcomed the Fund’s growth and its efforts to expand deposit protection.
He said a stronger deposit insurance system would increase public confidence in banks and other licensed financial institutions.
According to the minister, improved confidence could also encourage investment and support wider economic growth.
He said the government would continue supporting initiatives that promote financial stability, job creation and long-term development.
The proposed increase to Shs20 million would require further engagement between DPF and the Finance ministry before implementation.