Source: Daily Monitor (Uganda).
Original article available here.
KAMPALA, January 15 – Following recent public outcry over exploitation by unlicensed microfinance institutions, the government is in advanced stages to set up a regulatory framework to bring order in the industry.
Addressing MFIs and guests during the 2007 Citigroup Micro-entrepreneurship award ceremony in Kampala on January 10, State Minister for Micro Finance, Caleb Akandwanaho, said the law, which will be in place by June 2008, will soon be tabled in parliament for deliberation and passage.
The law is expected to bring to an end the outcry from the public who have accused unlicensed microfinance institutions of fleecing them of their funds.
Several microfinance institutions have recently come under the spotlight after borrowers and their members complained of being cheated by the institutions.
“Beginning June, there will be a law controlling and regulating the activities of these institutions from exploiting poor but entrepreneurial Ugandans who want to access credit. By June, this confusion will be finished. We need to sit down and solve this problem and open up space for borrowers,” he said.
Mr Akandwanaho said the government is committed to seeing every Ugandan access financial services primarily through SACCOs.
He said provision of steady sources of investment funds through microfinance has brought about development and most of the success stories.
“We are going to clean up the mess existing in the SACCOs. We can’t leave these people in the middle. They must fall under a specific apex organisation and see which law can deal with them,” he said.
SACCOs are expected to play a pivotal role in disbursing money for the Prosperity for All Programme to borrowers and in monitoring the performance of each borrower.
By Joseph Olanyo, Daily Monitor (Uganda)
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