MICROCAPITAL BRIEF: Plan for New Law to Regulate Microfinance Sector in Uganda Announced

A new law to regulate the microfinance sector in Uganda is expected before the reading of the 2010/2011 budget in June [1]. The plan was announced by Ruth Nankabirwa, the microfinance state minister at the third Financial Inclusion Advisors Conference recently hosted in the capital, Kampala. According to Ms. Nankabirwa, membership in the microfinance sector has grown from 644,318 in 2008 to 1,154,715 in 2009. A large proportion of funds within the sector are unregulated – there are over 1,340 microfinance institutions (MFIs) in Uganda that are not regulated. Ms. Nankabirwa argues that regulating the microfinance sector will increase consumer confidence and encourage more people to use its services.

As of 2008, there were 28 MFIs that reported Ugandan operations to the Microfinance Information Exchange (MIX Market), with USD 293 million in total assets, an aggregate gross loan portfolio of USD 193 million, 252,458 active borrowers and 1 million depositors with USD 196 million in deposits [2].

By Conner Brannen, Research Assistant

Sources and Additional Resources:

[1] The New Vision: “Law Key for Microfinance Growth” by Sylvia Juuko, May 10, 2010: http://www.newvision.co.ug/D/8/220/719098

[2] MIX Market: Microfinance in Uganda: http://www.mixmarket.org/mfi/country/Uganda

[3] MICROCAPITAL BRIEF: Bypassing Microfinance Institutions, Uganda Savings and Credit Cooperatives (SACCOs) to Get Funds Directly From Government-Run Microfinance Support Centre (MSC), January 5, 2010: https://www.microcapital.org/microcapital-brief-bypassing-microfinance-institutions-uganda-savings-and-credit-cooperatives-saccos-to-get-funds-directly-from-government-run-microfinance-support-centre-msc/#more-4253

[4] MICROCAPITAL BRIEF: Regulation Restructuring by Central Bank of Nigeria (CBN) May Harm Microfinance Banks, April 20, 2010: https://www.microcapital.org/microcapital-brief-regulation-restructuring-by-central-bank-of-nigeria-cbn-may-harm-microfinance-banks/

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