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Population (millions) |
23.4 |
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Gross domestic savings (% of GDP) |
6.4% |
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% Population under $2/day (PPP) |
96% |
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Regulated microfinance institutions |
Commercial banks; Micro Finance Deposit-taking Institutions (MDIs) |
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Non-regulated sources of microfinance |
Credit-only microfinance institutions will not be regulated |
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Predominant informal finance mechanisms (ROSCAs, tontines, etc.) |
Member-based institutions (village banks, etc.) |
» More country data from the Microfinance Information Exchange Market
General Approach to Regulating
Based on the Comparative Database on Microfinance Regulation by the IRIS Center of the University of Maryland|
Banks and Credit Institutions |
MDIs | |
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Definition or description of institution |
Financial institutions, i.e. companies carrying on financial institutions business; excluded are co-operative societies registered under the Co-operative Societies Statute, 1991, unless they accept deposits from the public, and micro deposit-taking institutions, i.e. companies carrying on microfinance business. Banks accept demand and time deposits; lend; and provide payment services. |
Micro Deposit-Taking Institutions (MDIs), are defined as companies carrying on microfinance business including deposit-taking, lending, including short-term loans to small or micro- enterprises and low-income households, usually characterized by the use of collateral substitutes, such as group guarantees or compulsory savings. |
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Guidelines & restrictions on financial services |
Permitted: all financial activities except the following: Prohibited activities: Lending using financial institution's own shares or capital as security (Section 30); engaging in trade, commerce, industry, insurance or agriculture, make capital investments in excess of 25% of core capital (Section 37); investments in immovable property only up to 100% of core capital and only for the purpose of conducting the financial business (Section 38); underwriting of shares and securities brokerage (Section 39); restrictions on foreign exchange business as prescribed in rules published by BoU (Section 40), the same applies to net open positions in any foreign currency (Section 42) |
Permitted: all financial activities except the following: Prohibited activities: Prohibited without approval of BoU are the following activities: Cheque accounts; other businesses such as trade, commerce, industry, insurance or agriculture; making certain equity investments in other companies; underwriting and placing of securities; e-commerce; taking deposits and lending in foreign exchange; intermediating loan insurance funds (defined as collateral for group loans); derivatives dealing; purchasing non-performing insider loans; lending when liquid assets are insufficient (Section 19)
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Financial Systems in Remote Uganda (916 KB, PDF)
Where There is no Banker - Financial Systems in Remote Uganda, 2002
By Grace Sebageni, Steven Kaggwa and Leonard Mutesasira
The study examines two areas in rural Uganda where formal financial institutions are absent, or have recently been introduced, and looks at both the savings and credit mechanisms that the communities have developed and used in the absence of formal institutions, over many generations. The study examines how the mechanisms affect and impact each other, especially how this inter-relationship has affected the usage levels of each mechanism over time. The impact on households of the use of these mechanisms is also examined. It is evident that the mechanisms in use are quite effective coping strategies and the people in the communities have mastered the art of using them. Although deficiencies still exist that a more formalised environment could perhaps address, the critical factor is that the people have developed systems that depend on social relationships and that have stood the test of time. Perhaps the answer for more effective impact lies in working with these mechanisms or around them, rather then attempting to replace them altogether. As one scholar wrote:
"...the various financial market segments may in fact be representing an efficient specialisation for different niches, suggesting that selective integration is the appropriate policy vehicle, rather than simply extending the formal sector's frontier ..."
A Case Study of Kibaale District
An analysis of the factors affecting the demand for savings services by rural savers in Uganda: A Case Study of Kibaale District, 2001
By Amos S. N. Bakeine
This paper, on savings mobilization in Uganda, is based on a research carried out in the Kibaale district of the country. The paper examines:
- Savings products demanded by rural savers;
- Strength of the relationship between the rate of return (interest) offered on savings and the demand for savings services by rural savers;
- Distance to a savings service delivery point in order for a rural saver to use it satisfactorily.
The paper finds that:
- Rural savers prefer illiquid products;
- 99% of the rural savers surveyed prefer a proximate Service Delivery Point (SDP);
- If affordable public transport is available, the influence of physical proximity on demand for savings services diminishes;
- 10% rate of return (as against 5% currently) would attract 75% of those who would otherwise decline to use an SDP for the reason that the rate on offer is too low.
The author concludes that there is a further need to investigate how institutions should be structured in order to adequately meet the needs of rural savers on a sustainable basis.
From the paper: Banking the Underserved: New Opportunities for Commercial Banks, Financial Sector Team, London, 2005
In February 2002, Stanbic Bank, which had only one branch in
Stanbic’s outreach in nonurban areas of
Despite its origins as an up market financial institution, Stanbic now profitably serves a large segment of the bankable population in
See also:
Savings in the Context of Microfinance - Lessons Learned from Six Deposit-Taking Institutions. 1998, Sylvia Wisniwski
Where are they now? (CERUDEB, Uganda). 2006, Ruth Goodwin-Groen
Use and Impact of Savings Services Among the Poor in Uganda L. Mutesasira, H. Sempangi, D.Hulme, S. Rutherford,G. and A.N. Wright
Saving and borrowing in rural Uganda, 2000, Musinguzi, P. & Smith, P.
Country Level Effectiveness and Accountability Review (CLEAR), CGAP
Savings Habits, Needs and Priorities in Rural Uganda. 2005, Pelrine and Kabatalya.