An In-Depth Assessment Of The Ugandan Microfinance Market: Qualitative Side Study Report

This study analyzes the reasons dictating the choice of financial service providers by the Ugandan public. It also seeks to understand:

• Why and how do the clients make the various choices of using different financial service providers in the main markets in Uganda?
• How do the clients use the several options available to them (including simultaneous access of financial services from multiple sources)?
• What are the implications for the microfinance institutions (MFIs) operating in these areas?

The research design and method of the study were as follows:

• Collection of information from different socio-economic groups to ensure reasonable representation;
• Choosing of four districts based on their high MFI concentration;
• Employment of qualitative methods in soliciting information from the respondents;
• Use of focus group discussions and participatory rapid appraisal tools.

The research findings are divided into two broad sections:

• Discussion of the explanations given by respondents as to why and how clients make choices to use different service providers;
• Examination of reasons given by clients for the concurrent usage of multiple financial institutions.

The paper concludes with recommendations from clients for MFIs operating in these markets:

• Increase grace period;
• Improve staff attitude;
• Raise speed of service;
• Encourage flexibility;
• Upgrade communication;
• Reduce the number of different fees and charges;
• Decrease collateral requirements.