Transparent Pricing In Uganda

Due to a strong market enabling environment, macroeconomic stability and sound international donor commitment  the microfinance sector in Uganda has seen growth and stability. The industry was initiated in the early 1980s when a number of socially oriented NGOs piloted microfinance projects to create access to financial services. During the following decades the sector evolved to into an industry with a growing outreach and commitment to sustainability. The main providers of microfinance in Uganda are commercial banks, credit institutions, microfinance deposit-taking institutions (MDI’s), savings and credit cooperative organizations (SACCOs), and non-governmental organizations (NGOs). These institutions serve an estimated half a million active borrowers and manage a gross loan portfolio of around UGX 7.9 billion (USD 300 million).

For the purposes of data collection, microloans in Uganda are defined as products with loan amounts less than UGX 15,000,000 (USD5,700).  MFTransparency presents data for microloan products that have over 50 active borrowers and that have had more than 10 loan disbursements over the past 9 months

The regulatory landscape of Uganda’s microfinance sector is shaped by the diverse  range of institutions providing microfinance services and the regulatory authorities overseeing them. Commercial banks, credit institutions, and MDIs fall under the Bank of Uganda regulatory framework. Categorised in to a four tier supervisory and regulatory framework, these institutions are governed by various laws and guidelines. SACCOs are supervised by the Department of Cooperatives within the Ministry of Tourism, Trade and Industry and NGOs are monitored by the National Board of Non-governmental Organizations housed at the Ministry of Internal Affairs.

Laws establishing a consumer protection policy and regulatory guidelines addressing truth in lending do not yet exist. However, there are a handful of independent organizations addressing this field in Uganda. Chief amongst these are the Uganda Consumer Protection Association (UCPA) and the Consumer Education Trust (CONSENT). AMFIU presents guidance in terms of financial consumer protection with its Consumer Education and Transparency Program, the Consumer Code of Practice and the Consumer Financial Education Handbook.