MICROCAPITAL BRIEF: Bypassing Microfinance Institutions, Uganda Savings and Credit Cooperatives (SACCOs) to Get Funds Directly From Government-Run Microfinance Support Centre (MSC)

Bypassing microfinance institutions (MFIs), the Microfinance Support Centre (MSC), a government institution, will channel funds directly to Savings and Credit Cooperatives (SACCOs) which will in turn provide affordable credit through loan products to support agricultural production. 

Uganda has thousands of SACCOs, which are cooperative societies that enable members access to savings and loans in poor communities.  Former Vice President of Uganda and the Chairman of Microfinance Support Centre, Dr Specioza Wandera Kazibwe states, “Money has not been reaching the poor, it has been stopping in the hands of technocrats in [microfinance] institutions.”  Farmers will be encouraged to form SACCOs in order to access the money, thereby bypassing MFIs. The microfinance loans provided by SACCOs will require no collateral security apart from the person’s own business and will set annual interest rates between 9 percent and 17 percent. MSC will also provide supervisory assistance and skill building to the rural poor. Chairman Kazibwe states, “We want to transform the rural poor by providing funds to commercially modernise agriculture.”

 
About Microfinance Support Centre (MSC):
Microfinance Support Centre (MSC) is a government institution established to supervise the disbursement of government funds into Savings and Credit Cooperatives (SACCOs).  Dr Specioza Wandera Kazibwe is the current MSC chairman. MSC website unavailable.
 
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