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The following is part of a blog series spotlighting the perspectives and experiences of CEOs and board members of financial institutions, as well as industry experts, who have participated in CFI’s Africa Board Fellowship program.

ABF Fellows discussion at table

ABF Fellows group discussion. November 2016.

> Posted by Danielle Piskadlo, Director, CFI

Few countries have escaped socio-political unrest, conflict or periods of crisis. As the consequences of such events can be severe for both financial service providers and their customers, it behooves every board and CEO to consider how they might prepare themselves to respond when the political environment around them deteriorates.

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What if your employer told you that your next paycheck would come in the form of  Bitcoin. How would you react?

Woman using mobile phone in olive farm

> Posted by By Chrissy Martin, U.S. Global Development Lab, USAID
Note: This post originally appeared on ICTworks and is re-posted here with permission.

Do farmers really want to be paid in mobile money? To answer this question, I’ll ask you to first entertain a brief thought experiment.

Imagine that your employer told you that next pay period, your company will start paying you in Bitcoin.  How would you react?  Sure you’ve heard about Bitcoin, but you have lots of questions as to what it will mean to receive your salary this way, such as:

  • Am I getting swindled?!
  • Where can I use bitcoin?
  • Can I spend it like dollars, or will I have to convert into dollars first?
  • Where can I convert?
  • How much is the conversion fee?
  • Will I be paid into my same bank account?

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BRAC Uganda shares strategy and sustainability insights from its transition from an MFI to a bank.

By Emily Coppel and Isabel Whisson, BRAC

Woman holds carton of eggs

©BRAC/Alison Wright

BRAC Uganda Microfinance is pursuing a shift in its regulatory status that will allow it to broaden the landscape of financial services it provides to Uganda’s rural poor.

BRAC, the largest microfinance provider in Uganda, currently serves more than 200,000 predominantly rural, female clients, through more than 150 branches across nearly every district in the country. In the nine years since the microfinance company was established, BRAC has provided microloans to poor women (a basic loan ranges from US $55 – $1,400), and small enterprise loans for male and female business owners (from US $1,400 – $10,000). Its current portfolio is around US $45 million. This year, BRAC submitted its application to transform into a bank. In Uganda, it was a Tier 4 institution, a category for unregulated credit-only NGOs, and money lenders. After the transformation, BRAC will become a regulated Credit Institution, under Tier 2, allowing it to expand its suite of services for clients – most notably, to savings accounts.

The process of transitioning to a regulated institution in Uganda is a lengthy one, and requires the organization to strategically analyze its goals and pro-poor model. Much can be learned from this process that can inform others considering a similar transformation to expand services for clients. As with any significant change, the organization is already facing new challenges that must be carefully and creatively navigated so as not to alienate its customer base.
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For Financial Inclusion Week 2017, WSBI highlights the ways that new partnerships and new products are helping its members make progress toward financial inclusion.


Posted by Mina Zhang, Senior Advisor, WSBI

The World Savings and Retail Banking Institute (WSBI) and its members are committed to Universal Financial Access (UFA), doing their part to help realize the “account for everyone” goal. Our data from the end of 2016 shows that we’re making progress, with 136 million new clients and 236 million new transaction accounts, since the UFA benchmarks were set at the end of 2014.

For Financial Inclusion Week 2017, we are highlighting the ways that new partnerships and new products are helping us achieve this goal.
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> Posted by Hannah McCandless, Program Support Associate, Village Enterprise

Through its one-year graduation program, Village Enterprise provides business and savings training, access to savings groups, seed capital, and mentoring to rural East Africans living in extreme poverty. The program combines these grassroots interventions with linkages to financial institutions, increasing the financial capability of the extreme poor. In the second part of this series, Village Enterprise reflects on some of the learning gained through these interventions, focusing on amplifying progress made at the grassroots level through linkages to formal institutions.

The adoption of attitudes, habits, and behaviors needed for healthy financial decision-making is an essential first step in preparing individuals to be consumers of financial services. But just because households regularly save money or understand the risks of microloans does not necessarily mean that they are ready to evaluate and take-up formal financial services on their own. To be effective, financial inclusion interventions for those living in extreme poverty, at the base of the pyramid, need to both foster financial capability and facilitate healthy linkages to financial institutions.

Recognizing this need, Village Enterprise is working to establish linkages between our Business Savings Groups (BSGs, our version of VSLAs) and formal financial institutions. However, as we have learned, linking our BSGs to the right financial institution is easier said than done. We have found that creating healthy linkages is a multi-step process, rather than a one-time event.

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> Posted by Carmen Paraison, Senior Program Associate, Africa, the Smart Campaign

Smart Campaign Uganda convening participants

Smart Campaign Uganda convening participants

Earlier this year, the Smart Campaign co-hosted a financial inclusion and consumer protection event in collaboration with the Microfinance CEO Working Group and the Association of Microfinance Institutions of Uganda in Kampala, Uganda. With more than 100 people in attendance representing diverse stakeholder groups, the event served as a platform to exchange ideas and commit to greater partnership to progress financial inclusion policies and practices, and consumer protection in Uganda.

The goal of the event was to provide an opportunity to obtain clear commitments in support of the key themes and objectives of Uganda’s developing national financial inclusion strategy, and to place consumer protection at the heart of its roll out. The convening brought a variety of stakeholders together, including financial service providers, donors, researchers, government ministries, and the Bank of Uganda, to support the country’s consumer protection goals and facilitate better collaboration.

After hearing the perspectives and inputs of the key sector stakeholders in attendance, we took stock of our three-year strategy for the country. Going forward, the Campaign’s approach will focus on the following:
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> Posted by Jeffrey Riecke, Communications Specialist, CFI

If you had to embark on a journey similar to that of the 65 million people who are currently forcibly displaced, what would you bring? Most likely among your provisions would be a smartphone. Phones are the contemporary map and compass, a gateway to critical information, a means for keeping in touch with loved ones, and a financial toolkit. More and more, aid workers are witnessing refugees arriving at camps with smartphones. For both the refugee journey and the post-journey settlement process, a phone can be vital. With this in mind, you might not be surprised to learn that mobile money usage among refugees, including for cash transfers from governments and NGOs, is on the rise.

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> Posted by Center Staff

Embed from Getty Images

A schoolboy looks at an electric light bulb powered by M-KOPA solar technology, as it illuminates his home in Ndela village, Machakos, Kenya.

2016 was the hottest year on Earth since records began in 1880. For those of us who work in financial inclusion but are fearful about our lack of progress in combating climate change, the following is a spot of good news: at the recent World Economic Forum Annual Meeting in Davos, Ant Financial and the United Nations Environment Program launched the Green Digital Finance Alliance.

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> Posted by Mark Napier, Director, FSD Africa

The following post was originally published on the FSD Africa blog.

Yesterday, Zambia’s central bank announced it had taken over a commercial bank, Intermarket, after the latter failed to come up with the capital it needed to satisfy new minimum capital requirements. Three weeks ago, a Mozambican bank – Nosso Banco – had its licence cancelled, less than two months after another Mozambican bank, Moza Banco, was placed under emergency administration.

At the end of October, the Bank of Tanzania stepped in to replace the management at Twiga Bancorp, a government-owned financial institution which was reported to have negative capital of TSh21 billion. A week before that, just over the border in Uganda, Crane Bank, with its estimated 500,000 customers, was taken over by the central bank, having become “seriously undercapitalised”. In DR Congo, the long-running saga of BIAC, the country’s third-largest bank, continued in 2016, forced to limit cash withdrawals after the termination of a credit line from the central bank. And in Kenya, Chase Bank collapsed in April, barely six months after the failure of Imperial.

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> Posted by Ellen Metzger, CFI

Community savings groups are at the heart of successful rural banking

Before joining the Center for Financial Inclusion at Accion, I spent four years in rural East Africa managing an ultra-poor graduation program. At Village Enterprise, we focused on savings group creation and distributed conditional cash transfers rather than livestock (as is customary with graduation programs) in order to empower choice and facilitate ownership among our participants. Over years of traveling the bumpy back roads of Uganda and Western Kenya meeting with hundreds of savings group members, I met very few participants who went beyond their local savings groups to take loans from financial institutions such as MFIs. Those few who did created great success stories. In light of the recent article “Your Inflexible Friend” in The Economist, which offers a review of microlending’s history, I reflect on why we don’t see microlending in the rural areas of Uganda and Western Kenya and how that can change.

A good reputation is critical. In these areas, tragic stories of delinquencies and defaults travel faster and are remembered longer than stories of success. In Kenya especially, where there is more competition in rural areas among financial institutions than in Uganda, reputation precedes the products and services. These reputations can vary dramatically every 5 kilometers you travel. When groups are asked about being linked to a particular financial institution, one community will trust the organization, the next community a few kilometers away will cringe at the name. Microfinance institutions are extremely sensitive to fluctuations in trust, so it’s imperative for them to design trustworthy products and ensure adequate follow-through on their services every time.

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The views and opinions expressed on this blog, except where otherwise noted, are those of the authors and guest bloggers and do not necessarily reflect the views of the Center for Financial Inclusion or its affiliates.