OVERVIEWINTERVENTIONS

ACHIEVEMENTSLESSONS LEARNTWAY FORWARD

The Rural Financial Services Programme

1

Background –RFSP I

Phase 1: - 2003 – 2007Support to Microfinance (MDIs, MFIs, SACCOs, Etc)

through: - Matching Grant Facility for Capacity Building - MCAP Business Culture Fund - BCF Results of MCAP 55 New Branches (MDIs & MFIs) Opened 86 SACCOs Supported 150,000 Clients Served by MCAP assisted MFIsResults of BCF 39,591 individuals trained in Business Skills and Attitudes 1,162 Enterprise Groups Formed

2

Policy Shift – Focus on SACCOs

In 2006 government developed the Rural Financial Services Strategy (RFSS) as Pillar IV of Prosperity for All (PFA)

Strategy Aimed at supporting the establishment, strengthening and outreach of 1,085 SACCOs in as many sub-counties through out the country

IFAD committed to support not more than 160 – 200 SACCOs, however with additional GOU funding, RFSP is currently targeting 735 SACCOs

RFSP was thus restructured to support the strategy – Documented in the 2008 - Way Forward Document, leading to Phase II of RFSP

3

Components of RFSP IINo Component(s) Nature of SupportComponent 1

SACCO Establishment, Strengthening and Outreach

• Equipment, • Training & Mentoring• Operational Cost

SubsidiesComponent 2

Strengthening Apex Institutions, Regional Networks & Financial Linkages

• Staffing, Equipment, & Regional Infrastructure at UCSCU

• Promotion of Regional Networks

Component 3

Strengthening Regulation & Supervision

• Independent Regulatory Agency ,

• Regulatory Compliance• Performance

MonitoringComponent 4

Programme Administration • Oversight and M&E• Financial Management • Procurement• Communication

4

Implementing Arrangements

Phase 2: 2008 - to - 2013 RFSP is Managed by a Programme Administrative Unit (PAU)

along with Private & Public Sector Implementing Agencies: -

1. Uganda Cooperative Savings & Credit Union (UCSCU)2. Association of Microfinance Institutions of Uganda

(AMFIU)3. Uganda Cooperative Alliance (UCA)4. Uganda Cooperative College Kigumba (UCCK)5. Ministry of Trade Industry and Cooperatives (MTIC)6. Department of Microfinance (MFPED)

NB. Each of the above was Providing Specialized Services to SACCOs as Detailed in the Table in the next slide

5

Implementing Agencies – Key Roles

No Institution Key Roles Performed Under RFSP1 UCSCU • Training & Mentoring of 735 SACCOs

• Delivery of Equipment to 735 SACCOs 2 AMFIU • Performance Monitoring Tool (PMT) – 116

SACCOs• Product Development & Strategic Planning • Financial Literacy & Consumer Education

3 UCA • Promote & Strengthen 2 Regional SACCO Unions

• Promote & Strengthen 2 Regional SACCO Networks

4 MTIC • District SACCO Forums• Computerization & Update of SACCO Registry

5 UCCK • Training of UCSCU Field Staff in Cooperatives• Training & Certification of SACCO Managers

& Staff6 DMF • Overall Policy oversight

• Regulation & Supervision

6

Achievements

We Look at Achievements in 3 Aspects: -1.SACCOs

Deliverables (Physical Items & Knowledge Provided to SACCOs) Growth & Outreach (No of People Reached & Savings Mobilized/Loans

Disbursed) Sustainability Prospects of SACCOs (RFSP Undertakes Periodic Reality Check on SACCOs)

2.SACCO Apexes3.SACCO Overall Industry

7

Achievements – SACCOsPhysical Items & Knowledge Provided to SACCOs

8

Physical Support Provided

Summary Details

1. Operational Cost Subsidies 5.7 Billion Provided to SACCOs for Rent and Salaries for 3 Staff (Over 3 Years)

2. Equipment for Office Use 474 Safes, 619 Filing Cabinets, 1110 Bicycles, 1048 Calculators, 12 Photocopiers, 212 Computers, 176 Printers, 200 Generators, 192 Motorcycles, 1 Engine Boat, 44 MIS

3. Knowledge & Skill Enhancement 735 SACCOs Provided Short Term Modular & Customized Training

4. Other Services External Audit Fees, Mentoring, Accounting Stationary for 441 SACCOs

Achievements – SACCOsPerformance – Outreach, Savings & Loans

9

Parameter 2008 2012 % Growth

1. No. of SACCOs 347 735 112%

2. Membership 249,365 545,687* 119%

3. Share Capital 2 Bn 33Bn Exponential

4. Loans 11.1Bn 96.1bn 766%

5. Women Participation

49%

* NB. 545,687 includes 59,813 Group Members with Average Membership of 24 Members Per Group. Thus, number of Households Reached is Estimated at 1.9 Million. With Average HH size of 5 People; the actual number of rural people reached is 9.6 Million.

Achievements – SACCOs Sustainability Prospects

Category 2009 2010 2011 2012

No % No % No % No %

Sustainable 68 12% 96 17% 253 45% 214 39%

Potentially Sustainable 176 30% 174 30% 184 33% 160 30%

Not Yet Sustainable 325 58% 309 53% 122 22% 169 31%

Total Reporting 569 100% 579 100% 559 100% 543 100% Not Reporting 166 23% 156 21% 176 24% 192 26%

TOTALS 735 735 735 735

10

Achievements - APEXES

Strengthening a National Apex (UCSCU Supported with HQs and 15 Regional Offices) Administration & Operational Cost (Salaries, Motor Vehicles, Computers, Generator and

Others) Capacity Building for UCSCU & Unions

(Training for Board, Management & Staff of Unions)

11

Achievements - Industry

1. Computerization of SACCO Registry at MTIC2. Update of SACCO Registry

SACCO Census 2011 SACCO Census 2012

3. National SACCO Mapping Exercise SACCO Maps Showing Overall Coverage SACCO Maps Showing Regulation

4. Support to Regulation & Supervision Principles for Tier IV Regulation Passed by Cabinet Draft Law being initiated by First Parliamentary

Council

12

Lessons from RFSP

1. Stakeholder Involvement - There is need for sustained involvement of stakeholders in development of Microfinance sector generally and SACCOs specifically

2. Role of Intermediary Agencies – These are key industry drivers thus the need to build future interventions on the same institutions with specific roles for them

3. SACCOs Appropriate Mechanism - Banks and MFI have limited outreach. Thus need to strengthen networks and consolidate SACCOs for Expansion

13

Lessons from RFSP

4. Microfinance Beyond SACCOs – Some Regions may have more appropriate mechanisms for financial inclusion rather than SACCOs.

5. Manageable Numbers – Focus on a few SACCOs but with Potential for Sustainability and increased Outreach

6. Regulation and Supervision – Is a very critical factor in preventing the numerous fraud in SACCOs.

7. Incremental Investments – Institutional Capacity Building takes time, there is need for future interventions to build on the current project

14

Lessons from RFSP

7. Grant Support to Apexes –Performance Based Grants tied to specific activities would yield better results

8. Beneficiary Contribution – In Kind Grants (Actual Goods) and Cash Grants (Such as Cost Subsidies) without beneficiary contribution promote dependency syndrome among beneficiaries

15

Innovations from RFSP

The field level Financial Extension System (FEWs).

The mentoring approach of imparting technical skills to leaders and staff of SACCOs.

Critical Activities for RFSP Closure

COUNTRY SACCO INVENTORY

Survey of ALL SACCOs i.e. Update MTIC Database

Preliminary Map is Out (Name, Date, Pictures)RFSP Specific Maps to be Generated Shortly

See AttachmentData Entry and Analysis will follow: -

Reality Check: RFSP Contribution Vis-à-vis SACCO Registry Reality Check: RFSP Supported SACCOs Vis-à-vis Rest of the SACCOs Reality Check: SACCOs Vis-à-vis Principles of Regulation (Preliminary Analysis Completed for RFSP Supported SACCOs )

Preparation of Long List for PROFIRA SACCOs

05/03/23

17

Activities for RFSP Closure Cont’d

Accountability Submission by Implementing Agencies

Statutory Audit Exercises

Project Impact Study (Evaluation Underway)

Project Completion Report (Evaluation Underway)

Critical Communication Activities (Underway)

Conclusion of Outstanding/Outgoing Contracts

05/03/23

18

Preparatory Activities for PROFIRAApproved Principles for Tier IV Regulation

Progress with PROFIRA Approvals Ministry Development Committee Approval Cabinet Approval Parliament ApprovalGUIDANCE REQUIRED FROM MFPED

Proposals for formulation of Project Sub-Component on Regulation Specific Roles – DMF Specific Roles - MRA Specific Roles - MTIC

05/03/23

19

Rationale for PROFIRA

Goal Increase Income, Improve Food

Security & Reduce Vulnerability in Rural Areas

Development ObjectiveSustainable Access to and Use of Rural

Financial Services05/03/23

20

Underlying focus of future Support

Sustainability Lessons Learnt from the Past Client Protection New Technologies Linkages with Agriculture Donor Coordination

05/03/23

21

Underlying Principle s - PROFIRA

1. Savings-First for Community Based Financial Institutions

2. Member-Based Nature of Grass Roots Financial Institutions

3. No trade-Offs between Outreach & Sustainability4. Financial Inclusion through diversified supply of

Financial Services5. Multiple Implementing partners for Better

Quality Services

05/03/23

22

Components of PROFIRA

The 3 Components Include: -

1. SACCO Strengthening & Sustainability

2. Community Based Financial Services

3. Project Management05/03/23

23

Component 1

1.0 SACCO Strengthening & Sustainability The Component focuses on Support to Savings

& Credit Cooperative Societies (SACCOs)

Sub Components Include: -1.1 SACCO Strengthening1.2 Developing a Sustainable SACCO Apex1.3 Innovations & Technologies1.4 Policy Regulatory & Institutional Environment

05/03/23

24

Component 2

2.0 Community Based Financial Services The Component focuses on Support to

Community Savings & Credit Groups (CSCGs)

Sub Components Include: -2.1 Establishment of New CSCGs2.2 Graduation and Linkage of CSCGs2.3 Establishment of MIS for CSCGs

05/03/23

25

Component 3

3.0 Project Management Unit This Component involves staffing and

operations of the Project Management Unit (PMU) under MFPED

Sub Components Include3.1 Knowledge Management3.2 Monitoring & Evaluation

05/03/23

26

PROFIRA Design Time Table

November 2012 – Project Design Document

December 2012 – IFAD/GOU Technical Review

Feb-March 2013 – Final Design Mission

July 2013 – Loan Negotiations

Aug 2013 – Cabinet & Parliament Approvals

Sept 2013 – Presentation to IFAD Board

Jan 2014 – Start of Project Implementation

05/03/23

27

IMPACT

Short Documentary showing SACCO beneficiaries tell their story!

=THANK YOU= 

29