The State of Microfinance in Uganda 2012/13

This report assesses the performance of MFIs in Uganda and aims to inform MFIs, policymakers, and stakeholders about performance trends of individual institutions and peer groups as well as their strengths and weaknesses. It gives an overview of the overall financial sector and portrays the state of financial inclusion in Uganda. The report defines and reviews service delivery of the individual actors of the industry on the basis of data collected from 95 institutions over a year. The report highlights include:

• Microfinance industry served 1,381,532 depositors and 553,326 borrowers in 2012;
• Smaller Saving and Credit Cooperative Organizations (SACCOs) reported an average PAR of 16.3%, while other SACCOs reported a PAR of 8.5%;
• About 86% of the institutions reported positive returns (after taxes and grants). The profitability is lowest among regulated institutions;
• SACCOs reported an average operational self sufficiency of 125% and unregulated MFIs of 148%;
• SACCOs with a loan portfolio above Shillings 250 million were able to have a return on assets above 5%;
• Operational expense ratio of unregulated institutions was on average above the recommended maximum of 20%;
• MFIs kept their costs of funds low, but operational are relatively high;
• Only 56% of the SACCOs increased their loan portfolio size in 2012.