UNDP Microfinance Assessment Report: Uganda

The paper states that microfinance, especially credit, will solve a great many of Uganda's difficulties in extending poverty eradication efforts to under-served populations. It discusses:

• Financial sector;
• Microfinance and current policy debates like privatisation, restructuring, regionalisation, open borders, infrastructural challenges and the exclusion of whole parts of the country from development efforts;
• The microfinance marketplace (donors, themes, short term prospects);
• Entrepreneurs, microenterprises, and lending groups;
• Existing and potential MFIs and attempts to analyse the short and medium term capacity to deliver financial services in the MFI sector in Uganda;
• Primary co-operative societies in Uganda.

Case studies were also presented. Says small signs of some distortions in the new market for microfinance are now visible (clients dealing with more than one MFI at a time, staff salaries going up and hence raising intermediation costs).

Concludes that:

• The legal and regulatory framework that eventually could put new MFIs on solid footing and back-up voluntary standards of operation and conduct, is very much in process;
• All the bank and non bank financial institutions in the country, those conducting best-practice based microfinance are very few and very new, and as a result credit outreach is quite limited.