How To Send Money To Uganda?

send money to Uganda

The world is increasingly becoming interconnected and as a result, you now have a lot of options when transferring funds internationally. All these options can overwhelm you when deciding how to send money to Uganda.

According to actual World Bank data the main corridors are from United Kingdom, United States and South Africa to Uganda.

This guide will look at the popular options available to help you find the right solution.

Money transfer to and from Uganda: Who needs the service?

Obviously, it is impossible to individually list all the reasons why someone might need to send money to or from Uganda. Based on research, there are three main groups of individuals who account for most of the money transfer transactions between Uganda and the rest of the world, they are:

i. Ugandans abroad sending money to their families

Estimates show that there are almost two million Ugandan citizens who currently reside in other countries. Most of these members of Uganda's diaspora are working in North America (the U.S. and Canada) and European countries. These numbers don't include people of Ugandan origin who have become naturalized citizens in their host countries.

The Ugandan diaspora sends over $1 billion in remittances every year. They send money to Uganda to support their families back home as well as to invest in the Ugandan economy. The Ugandan diaspora accounts for most of the cash remittance in Uganda.


ii. Freelancers with international clients

Thanks to widespread internet availability and rapid globalization, there are thousands of Ugandans who work as internet freelancers. Most either work as programmers/developers, writers or as virtual assistance.

These writers face a challenge when it comes to receiving payment from their international clients, and with the sector rapidly expanding, they significantly contribute to the demand for money transfer to Uganda.


iii. Ugandan studying abroad

Every year, thousands of Ugandan students choose to further their studies in other countries, mostly in the U.S., Canada, the UK and Australia. Their families are often frustrated when trying to determine how to send money from Uganda to USA and other international destinations.

The frustration comes mostly from most money transfer options focusing on how to send money to Uganda rather than sending money from Uganda.

Comparing money transfer services: The metrics

As already stated, the purpose of this guide is to highlights the international money transfer methods currently serving the Ugandan market. To determine which method(s) might suit your needs, we will use three measurement metrics: charges, accessibility (in Uganda) as well as the waiting period.


i. Charges

There is no free international money transfer platform. Each of them earns an income either by directly adding a fee for the sender, getting a 'cut' from the recipient or from setting their own currency conversion rate. This is one of the main factors that differentiate international money transfer services.


ii. Accessibility

We will also factor in the ease of accessibility offered by the different methods. This will be determined by the coverage in Uganda (which areas are covered) and the participation barriers (what does the sender/receiver on the Ugandan side need to access the service)


iii. Wait times

Basically, how long does the recipient have to wait to access the transferred funds once the sender has completed the transaction on their end? Some needs are more urgent which makes this an important factor to consider.

How to send money to Uganda?

How to send money to Uganda: Available services

This guide shall focus on the four main types of services that facilitate international money transfer in Uganda. These are: bank wire transfer, cash pickup transfer services, and mobile money transfer.

Each of these methods will be analyzed, with the analysis covering the main pros and cons for using the services.


i. Bank wire transfer

This is the traditional method of international money transfer that has supported international trade for decades. It works as a bank to bank transaction where the sender directs their bank to send funds directly to the recipient's bank account.

The Ugandan banking industry is well established with numerous international banking organizations (such as Barclays) operating in the country. This is what makes it possible for international wire transfers to be transacted.


Bank wire transfer: Pros

The main advantages of using bank wire transfers are:

  • You can send or receive money between Uganda and any international jurisdiction. This is due to the fact that there is no third party involved in the transaction, just the sending and receiving bank; and banks are present in every country.
  • It is also one of the safest money transfer to Uganda methods. Since the funds are going directly to the recipient's bank account, the receiving bank's security measures should ensure that only the recipient can access these funds.
  • Bank transfers work both ways. They are an ideal solution when you are considering how to send money from Uganda to USA and other international locations.


Bank wire transfer: Cons

The main disadvantage of using bank wire transfers are:

  • This is possibly the most expensive international money transfer method due to the numerous costly fees attached to each transaction. The sending bank will charge the sender an outgoing international fee to initiate the transfer. While specific fees differ between different banks and jurisdiction, the international average is around $30. The receiving bank will also charge the recipient an international receiving charge, which in Uganda costs around $10. This is without factoring in currency exchange charges.
  • While international wire transfers have a wait time of 1-2 days, for Ugandan recipients, this usually takes 4 working days. Weekends and holidays in both Uganda and the sending country do not count as working days, which means wait times can be much longer than4 days. This is not the ideal transfer method when urgency is required.
  • In terms of accessibility when sending money to Uganda, the recipient needs a bank account to receive funds. Most Ugandans who reside in rural areas or those not in formal employment are unbanked, which limits their access to the transfer method.


ii. Cash pick-up transfer services

The two main services under this category are western union and Moneygram, as both offer wide coverage in Uganda, North America and Europe. Both Western Union Uganda and Moneygram Uganda have partnered with banks to provide cash pickup and drop-off points.


Cash pickup services: Pros

The main advantages of using cash pick-up services are:

  • Most urban areas in Uganda are covered due to the partnerships that Western Union and Moneygram Uganda have made with local banks
  • Both services do not charge the recipient which means that the money sent is the money that will be received


Cash pickup services: Cons

The main disadvantages of using cash pick-up services are:

  • The recipient needs to physically visit a bank that partners with either Western Union Uganda and Moneygram which can be inconvenient for those in rural Uganda who don't have banks nearby
  • The sending charges vary greatly depending on your method of payment (bank, cash or online) and the method the recipient will access the cash. The charges for sending $200 from the US to Uganda vary between $7 and $20 for both services
  • Wait times also vary depending on how you are paying for the transfer. This can either be instant or last between 1-2 days
  • Both services charge a 'hidden' cost by charging unfavorable currency conversion costs between the Ugandan currency and the international currency used.


iii. Mobile money Uganda international transfer

Technology has changed how we do business, and international money transfer has been one of the industries that have been revolutionized by this progress. More than 90% of all Ugandan adults have a mobile phone, and Ugandan mobile providers support both international and local money transfer.

Services such as Worldremit, Xoom and Azimo allow for the transfer of funds from the senders online account to the recipient's Ugandan phone number.


Mobile money transfer: Pros

The advantages of using mobile money transfer include:

  • It is the cheapest transfer method in terms of sending charges. The average cost of sending $200 to Uganda from these services rarely exceeds $5. Most of them, such as Worldremit Uganda transfer don't unfairly manipulate the exchange rate as an additional hidden cost.
  • In terms of coverage, even rural areas are covered by mobile money kiosks which can be used to withdraw the sent funds in Ugandan currency.
  • The transactions wait times range from instantaneous to two hours, not days. This makes them ideal for sending emergency funds.
  • You get to send money to Uganda online, day or night.


Mobile money transfer: Cons

There is only one main disadvantage of using mobile money Uganda transfer; transaction limits. Most of these services have a daily transaction limit ranging from $500 -$1000. This can be frustrating when you want to send a sizeable amount of money to Uganda

How to send money to Uganda: Our Verdict

To better compare these three methods, lets imagine someone has exactly $200, and wants to send it all to her family in Uganda. If she used wire transfer, not only should the recipient have a bank account, the outgoing international fee of $30 and the incoming international fee of $10 means that her family will receive $160.

If she were to use Moneygram or Western Union, the sending fee will range between $7 and $20 which means that maximum amount received will be $193. The unfavorable exchange rate will further reduce the received value in Ugandan currency.

With mobile money transfer, the minimum received value would be $195 (with a maximum $5 fee) and the longest wait times will be measured in hours, not days. Even if the recipient is in a rural area, they can easily access the funds in their mobile phone at a nearby kiosk.

It is also convenient for you to send money to Uganda online from the comfort of your home or office. Unless you want to send more than $1000 in a single transaction, our verdict is that mobile money transfer services such as Worldremit Uganda are the way to go.

This article offers a more in-depth guide on these services and how you can use them when making a remittance in Uganda.