MICROCAPITAL BRIEF: Ugandan Government Orders Release of $26m to Aid Rural Poor through Microfinance

The government of Uganda has ordered the release of UGX 60 billion (USD 26 million) to meet more of the demand by poor people in rural areas for financial services. The African Development Bank (AfDB), a development finance institution that provides loans and grants to governments and private companies in Africa, and the Islamic Development Bank (ISDB), an international financial institution in Saudi Arabia that seeks to support economic development in Islamic communities worldwide, have reportedly partnered to launch a Rural Income and Employment Enhancement Project targeting 1.4 million people in rural areas through the provision of loans and skills training. To access these financial services, potential clients must be a member of a registered Savings and Credit Cooperative Society (SACCOs). Funds will then be channeled to them through the Ugandan government’s Rural Financial Services Programme, federally-owned Microfinance Support Center Limited (MSC) and the Uganda Cooperative Savings and Credit Union (UCSCU) [1].

About the African Development Bank (AfDB): Established in 1964, the African Development Bank (AfDB) is a development finance insitution that provides loans and grants to governments and private companies in Africa. AfDB commits approximately USD 3 billion annually to African countries. Owned and funded by member governments, the bank has a public-interest mandate to reduce poverty and promote sustainable development. AfDB shareholders consist of 77 member countries, which include 53 African countries. The AfDB is controlled by a Board of Executive Directors, made up of representatives of its member countries. As of 2010, the president of AfDB is Donald Kaberuka.

About the Islamic Development Bank (ISDB): The Islamic Development Bank (ISDB) is an international financial institution founded in 1973 in Saudi Arabia. It aims to support economic development and social progress of its 56 member countries and of Islamic communities around the world. ISDB participates in equity capital investments and loans to support projects and enterprises that are compatible with its own mission. As of 2009, ISDB has a loan portfolio worth USD 4.9 billion. ISDB does not report financial information the Microfinance Information Exchange (MIX), the microfinance information clearinghouse.

About the Microfinance Support Centre Limited (MSC): The Microfinance Support Centre Limited (MSC) is a federally-owned organization founded in Uganda in 2001. It is tasked with managing the Rural Microfinance Support Project, which is funded by both the government of Uganda and the African Development Bank (AfDB), and the funds that support Savings and Credit Cooperative Societies (SACCOs). It also offers loan products and skills training to clients in the agricultural sector. MSC does not report financial information the Microfinance Information Exchange (MIX), the microfinance information clearinghouse.

About Uganda Cooperative Savings and Credit Union (UCSCU): The Uganda Cooperative Savings and Credit Union (UCSCU) is an organization established in 1972 in Uganda that is financed and managed by Savings and Credit Cooperative Societies (SACCOs). It aims to maintain the organization of SACCOs, educate and advocate for SACCOs’ members, promote microloans and savings and network with like-minded organizations.

By Diana Baide, Research Assistant

[1] AllAfrica. “Government Releases Sh60 Billion for Saccos” by May Karugaba an David Ssempijja, 11 October 2010

http://allafrica.com/stories/201010120068.html ?

MicroCapital’s Microfinance Universe profile: African Development Bank

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=African+Development+Bank++(AfDB) ?

MicroCapital’s Microfinance Universe profile: Islamic Development Bank

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Islamic+Development+Bank+(ISDB) ?

MicroCapital’s Microfinance Universe profile: Microfinance Support Centre Limited

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+Support+Centre+Limited+(MSC) ?

MicroCapital’s Microfinance Universe profile: Uganda Cooperative Savings and Credit Union

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Uganda+Cooperative+Savings+and+Credit+Union+(UCSCU)