The Association of Microfinance Institutions of Uganda (AMFIU), the umbrella body for microfinance institutions, convened recently for its 28th Annual General Meeting (AGM) as part of its continued commitment to share information and foster partnerships within the microfinance sector.
Dedicated to promoting professionalism and best practices across the sector, membership currently stands at 204 institutions and these include SACCOS, non-deposit-taking MFI’s, MDI’s, commercial banks in the microfinance space, and associate members such as development partners, wholesale lenders, consultants, and academic institutions with microfinance departments.
AMFIU was founded in November 1996, through the collaboration of several organisations with interest in microfinance. The main reasons for its establishment were the needs for MFIs to have a common voice; to lobby government for favorable policies; to share information and experiences; and to link up and network with both local and international actors.
Speaking about financial inclusion of women and smallholder farmers, Stephen Segujja Head, Economic Enterprise Restart Fund at Stanbic Bank said, “We believe that financial inclusion is not simply about opening accounts or providing loans, it’s about creating opportunities, it is about enabling a farmer to increase productivity, a woman entrepreneur to expand her business, a young person to pursue their ambitions and families to build resilience and prosperity. This is why our partnership with AMFIU remains so important. Together we share a common vision of building an inclusive financial system that leaves no Ugandan behind.”
Stanbic’s commitment to women and farmers is driven by its Women, Youth, and Farmers (WYF) agenda, anchored by a massive Ugx 1 trillion investment pledge. The bank provides targeted financial solutions, capacity building, and strategic partnerships to increase yields, boost incomes and formalize businesses across Uganda.
Segujja said, “At the start of 2021 as a bank we barely had any business to talk to regarding SACCOs and VSL’s, but with a lot of partnership from the members here we worked together and there’s been a very significant shift in the way we look at SACCOs and VSL’s. Also, in the way that we look at the Women, Farmers and Youth and that impact has been demonstrated not only in the bank right now, but in the whole association as bankers.”
“Since 2021 more than UGX362 billion has been extended through those SACCOs and VSLs reaching nearly 4 million Ugandans the majority of whom have been smallholder farmers and these are majorly community-based institutions of which 780,000 members have been able to access credits,” he said.
James Onyutta, the AMFIU Board President said, “The microfinance sector continues to play a pivotal role in advancing financial inclusion, supporting enterprise growth and improving livelihoods across Uganda.”
Over the years AMFIU’s collaboration has focused on strengthening SACCOs and VSLs which continue to play a critical role in expanding the financial services of the underserved communities. Through these institutions affordable finance is reaching people who would otherwise remain excluded from the financial sector. The impact has been very significant.
Onyutta said, “Despite the evolving economic environment, our member institutions continue to demonstrate remarkable resilience and commitment to serving millions of Ugandans, particularly low income households, microenterprises, vulnerable groups that could have been excluded from the formal financial sector and rural communities.”
Moses Ogwapus, Commissioner for the Financial Services Department at MoFPED, who also was the Chief Guest thanked AMFIU for its continued leadership in strengthening Uganda’s microfinance sector and advancing financial inclusion across the country.
“Your work has enabled millions of Ugandans particularly women, farmers and entrepreneurs to access opportunities that were once beyond their reach,” he said.
Stanbic’s objective is to strengthen the capacity of the MFI’s to extend affordable credit deeper into communities where access to formal financial services still remain limited. This represents a significant opportunity for the sector.
Segujja said, “We understand that SACCOs need affordable capital to serve the members effectively and that’s why we’ve dropped our lending rates to specifically agriculture-based SACCOs to 10% per annum. We believe that is the lowest in the market and not only do we lend to only SACCOs and VSLs, we are also now lending to microfinance institutions”.
He said, “We’ve opened up our taps and we’ll be able to lend to you at those rates. We also lend to general economic activity SACCOs at 12.5%, so the data point is that if you’re agri-based you are 10% and if you’re multi-purpose you are 12.5%. These funds can go up to seven billion shillings per SACCO and these investments are generating a lot of productivity. The
impact has been on a national world scale and it speaks to the power of targeting financing combined with strategic partnerships.”
He said, “Digitization is becoming increasingly important and Stanbic bank is working with SACCOs to adopt digital solutions that improve efficiency, transparency and customer experience. We’ve been working with partners like aBi Finance, one of our first financial partners to provide grants to SACCOs to digitize them, additionally we are also using our FlexiPay platform to digitalize their members to ensure that we reach as many people as possible.”
Stanbic Bank’s partnership has focused on building institutional capacity for more than 35,000 women leaders and farmer representatives who have been trained in governance, financial management and leadership.
