Association promotes performance of MFIs

 

David Baguma, the AMFIU executive director

 

 

By Godwin Ayesiga

Uganda’s financial sector has developed faster and more dynamically in the last decade than in previous years.

Licensing and regulation of the four leading Microfinance Institutions (MFIs) and Deposit-taking Institutions (MDIs) by the Bank of Uganda and the active promotion of a rural financial infrastructure through Savings and Credit Cooperatives (SACCOs), are among the new developments in the sector.

The steady growth of the sector prompted the formation of a coordination organisation for micro finance institutions. The Association of Microfinance Institutions of Uganda (AMFIU) has improved information dissemination, and promoted sound practices.

According to the Uganda microfinance industry assessment report (2008), AMFIU spearheaded the first ever comprehensive documentation of microfinance sound practices. The association builds the capacity of its members, runs a performance monitoring system, promotes research and information dissemination, supports microfinance consumer education and protection and leads active lobby and advocacy.

It has also strengthened the secretariat for more effective service delivery. The association uses the code of conduct and the consumer code of practice to ensure members adhere to the minimum standards of ethics, integrity and professionalism while doing their business.

The report further says today, AMFIU is reputed to be the most developed and mature microfinance national network organisation in Sub-Saharan Africa.

Poverty is mainly prevalent in the rural areas and much more in the northern part of the country. However, people in the region will access improved financial services since AMFIU has inaugurated its northern Uganda Regional office in Gulu.

David Baguma, the AMFIU executive director, says the Northern Uganda Regional office has been established to bring professional and sound practices in the microfinance industry closer to the people in the region.

“Microfinance helps people who would have otherwise not accessed financial services. It is important that the services are closer to them” says Baguma.

He adds that AMFIU also promotes and supports formation of District Microfinance Committees. The programme works to create replicas of the National Microfinance Forum (MFF). The committees are supposed to meet and discuss issues that are affecting their district or region and through AMFIU such issues are looked into by MFF.

“We base on researched data to lobby the Government and other policy makers at various levels to influence the development of an appropriate policy framework for microfinance practitioners,” says Baguma.

 

Who is eligible to join AMFIU?
Baguma says ordinary membership comprises any legally constituted organisation, whose activities focus on the direct provision of financial services to the informal, micro or small-scale enterprise sector.
The list includes formal sector banks, credit institutions, MDIs, Non deposit taking MFIs and SACCOs.

“We also have associate membership that comprises of institutions that promote microfinance like other apex institutions, wholesalers of funds, regional network organisations, capacity building suppliers such as consultants and private sector development centres,” he adds.
He, however, says there is also a provision for individual associate membership for people carrying out activities directly and indirectly related to microfinance.

Among the new projects being implemented by AMFIU is the special project to create equal opportunities for people with disabilities to access financial services. Some of the activities under the project include sensitisation of MFIs to be attend to the financial needs of people with disabilities and therefore tap their market potential.

 

Why join AMFIU?
Caroline Kumwesiga, AMFIU information officer says you need to become part of the growing movement that is aimed at bringing the best microfinance services to the people.

She adds that members are entitled to take part in and get discounts on workshops, access information on microfinance best practices, the members database, the microfinance industry surveys and be linked to regional MFIs and international networks, institutions and donors.

“Being a member of AMFIU not only shows your commitment to improving and professionalising the microfinance sector but also avails you an opportunity to share your challenges and successes with other MFIs and have a voice in the policy discussions with the government, donors and other stakeholders” Kumwesiga notes.

AMFIU works in collaboration with other organisations like the Bank of Uganda, European Union, Ministry of Finance, Planning and Economic Development, World Bank and the German Development services. Others are the African Microfinance Network, Private Sector Foundation Uganda, Rural Financial Service Programme, Women’s World Banking and Microfinance Competence Centre and Uganda Institute of Bankers.