Following up on the International Year of Microfinance (2005), UNDP Uganda supports the integration of microfinance in the financial sectors mainly through advocacy and technical assistance.
Microfinance institutions (MFIs) in most districts focus on traditional voluntary savings and loans initiatives which have failed to adequately address the needs of the poor. These are mostly Village Savings and Credit Institutions (VSCIs) and Savings and Credit Cooperatives (SACCOs) that are user managed and user owned and which mostly provide financial services to the economically active poor. Most of their services are more suited to urban populations and have limited value to the low income market. Most rural MFIs have a very low capital base and therefore offer a limited amount of credit. The existing institutions often have managerial and governance weaknesses that deter effective service delivery and inhibit access to loanable funds from national institutions.
Development objectives
The main objective of these projects is to enhance capacity of the MFIs to ensure they can meet the demand for financial services. An additional objective is to train the MFIs in sound microfinance practices such as governance, business planning and credit management for efficiency and business growth.
Key activities & expected results
Results will be the development of customer oriented (demand driven) innovative savings and credit services through capacity development of the financial service providers, and management capacity of targeted MFIs built to access loans from wholesale financial service providers.
Implementation phase
Each project has successfully developed client friendly and demand driven microfinance services and the VSCIs, originally 17, have greatly grown in number.
