How do I start a microfinance in Uganda?

Uganda – Apply for a Microfinance Bank License

  1. Apply in Person. Stage 1: Approval of Name.
  2. Stage 2: Application for Licence.
  3. Stage 3: Letter of Intent.
  4. Stage 4: Issuance of Licence.

How many microfinance are there in Uganda?

Currently, there is one commercial bank providing microfi- nance services (CERUDEB), one recently established pri- vately owned credit institution (CML), about 15 larger MFIs and around 80 CBOs and NGOs providing savings and credit services on a smaller scale.

Why is microfinance growing in Uganda?

Microfinancing has been used for development purposes in Uganda since 2000s. The alternative system of funding was pursued as a way to avoid flawed top-down development strategies and to empower people in a country not yet able to compete in international markets.

What are the requirements for starting a microfinance bank?

National microfinance banks.

  • An application fee in an e-payment or draft payment.
  • A capital requirement deposit to the microfinance bank share capital escrow account at the CBN.
  • Evidence that the capital you paid had been acquired with lawful means (no laundered money or illicit trade).
  • A feasibility report in detail.

How do I register a microfinance institution?

Microfinance Company Registration as an NBFC

  1. Memorandum of Association and Articles of Association.
  2. Incorporation certificate of the company.
  3. Board resolution copy.
  4. Copy of Auditor’s report of receipt of fixed deposit receipt.
  5. Banker’s Certificate of No Lien stating the net owned fund.
  6. Banker’s report about the company.

What are the challenges faced by microfinance?

Here are Challenges faced by Microfinance Institutions

  • Over-Indebtedness.
  • Higher Interest Rates in Comparison to Mainstream Banks.
  • Widespread Dependence on Indian Banking System.
  • Inadequate Investment Validation.
  • Lack of Enough Awareness of Financial Services in the Economy.
  • Regulatory Issues.
  • Choice of Appropriate Model.

How can I start a small microfinance business?

How do microfinance companies make money?

Microfinance Institutions get funding from several sources, such as: Member and customer deposits – This is applicable to MFIs that are organised as mutual funds, cooperatives, and microfinance banks offering savings products. Subsidies and grants – Grants are more prominent when the MFI is just being set up.

How much does it cost to start a microfinance bank?

National MFBs are required to have an authorised share capital of not less than ₦5,000,000,000 (Five Billion Naira).

What are Tier 4 financial institutions Uganda?

The financial sector in Uganda is divided into Four Tiers: Tier 1 – Commercial banks; Tier 2 – Credit Institutions and Finance Companies; Tier 3 – MDIs; and Tier 4 –SACCOS, financial NGOs and all other non-deposit taking financial institutions.