Microfinance centre seeks to manage anti-poverty funds
A teller attends to a customer in a bank. The Microfinance centre is charged with the responsibility of providing micro credit and business development services to cooperatives, microfinance institutions and small and medium enterprises. FILE PHOTO
What you need to know:
Their view. The institution says it has the capacity since it has managed funds since 2001.
Kampala. The Microfinance Support Centre (MSC) is seeking government’s permission to manage government anti-poverty funds.
Ms Justine Bagyenda, the chairperson of MSC, said while meeting the Speaker of Parliament Rebecca Kadaga yesterday at their offices in Kololo, a Kampala suburb, that government was wasting a lot of money to manage the many Funds it has established.
“So many Funds have been duplicated and scattered [across the country], we are of the view that we manage them,” Ms Bagyenda, who doubles as an employee of Bank of Uganda (BoU), said.
To avail cheap credit access that would enhance entrepreneurship, government has launched different funds, including the Shs45.4b per year Northern Uganda Social Action Fund (NUSAF) II, which has been running since 2010; Skilling Uganda, which in the 2012/13 financial year, it received Shs54.17 billion.
Also, in partnership with different banks, government launched the Youth Venture Capital Fund in the financial year 2011/12 to lend money to viable enterprises.
The Youth Livelihood Programme (YLP) that was flagged off last year is another allocation of Shs19.25 billion and operating in 27 districts.
MSC, a government-owned company incorporated in 2001, is mandated to provide affordable Micro Credit and Business Development Services to cooperatives, microfinance institutions and small and medium enterprises and their lending rates range from 9 to 17 per cent depending on the nature of the loan.
Ms Kadaga was non-committal on MSC’s request but promised to expedite the amendments on Micro Deposit Talking Institutions [MDI] Act, 2003, that would regulate Saccos and Microfinance services, which are not regulated by BoU, one of the many issues raised by state minister for Microfinance, Ms Caroline Okao.
MSC is currently managing the contested Shs10b teachers Fund and the beneficiaries have been requested to apply for it.
MSC also implements a Rural Microfinance Support Project 2001- 2008 funded by African Development Bank and Uganda where loans totaling to Sh21b were given to 200 partner organisations, among other projects.
Ms Bagyenda said they have rolled out different programmes to strengthen the capacity of Saccos they lend to prevent them from folding in a months.
Mr Godfrey Mangeni, the MSC regional credit manager, said: “We have the capacity since we have managed funds since 2001 and we are spread across the country.”
MSC has zonal offices in Hoima, Gulu, Jinja, Masaka, Kampala, Kabale, Kabarole, Soroti, Mbarara, Mbale, Moroto districts.
Challenges in the microfinance ministry
Ms Okao said the biggest challenge facing her ministry was failure by people to repay the loans on time. She also said many Saccos were collapsing countrywide due to poor management but the ministry is going to address it by skilling the Saccos leaders.
