The Microfinance Support Center, the government owned limited liability company set up to aid in managing rural microfinance, has given a USD 1,117,318 re-capitalization grant to Post Bank Uganda, a government owned limited liability bank.
The grant is expected to benefit 316 sub counties, as the grant’s aim is to enable the bank to perform its new role as a district link bank, through which funds for the Bonna Bagaggawale (Prosperity-for-All) program, a Shs35 billion (USD 22 million) project aimed to address key areas that encompass production, micro-finance, marketing, and processing, would be channeled to Savings and Credit Cooperative Societies (SACCOS) complying with Post Bank’s requirements. (For further details on Bonna Bagaggawale and Post Bank Uganda’s role, refer to a previous MicroCapital article.)
“The bank will loan SACCOs money at an interest rate of 9% for agriculture and 13% for commercial activities. SACCOs will in turn charge interests of 13% and 17% to their members in order to pay off the loan.” Salim Saleh, the microfinance state minister said.
–Monica Sharma, Research Assistant
Additional Resources:
AllAfrica.com: Post Bank Gets Sh2b for Poverty Projects.
Microcapital Website: www.microcapital.org. Boston, Massachusetts, USA
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