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Stakeholders gather to discuss RFSP impact and completion reports

In Kampala, Uganda, Friday 4 April was a very brightly sunny morning. IFAD and Government of Uganda, together with key partners and stakeholders have gathered for a workshop to discuss the closure reports of RFSP. The invitations said 8:15 am and the chief guest, the Deputy Secretary to the Treasury in the Ministry of Finance, Mr Patrick Ocailap was at the venue, ready to open the workshop at 8:30am! Invited participants quickly took their seats as they walked in one by one to the rare surprise of a chief guest already in his seat!

The stakeholder workshop is a significant milestone as it is the event where the impact of the years of RFSP implementation, as well as a project completion report, are shared and stakeholders invited  to provide feedback. The firm hired to carry out the impact studies and write the completion report made a presentation in which they highlighted the achievements of the project in enhancing the outreach of financial services, usage of financial institutions, and sustainability of the supported Savings and Credit Cooperatives (SACCOs).
RFSP’s goal was to increase income, improve food security and reduce vulnerability in rural areas. The development objective was to increase the outreach and sustainability of the rural finance industry in Uganda and to improve poor rural household’s access to and utilisation of financial services. The key words are outreach, sustainability and usage of financial services.

The first phase of RFSP (2003-2007) focused on providing support to microfinance institutions through a matching grant facility for capacity building and business culture fund. In 2006, the government introduced the Rural Financial Services Strategy (RFSS) as the fourth pillar of the Prosperity for All Vision. In 2008, RFSP was refocused to solely support SACCOs. RFSP supported 735 SACCOs with operational kits and subsidies, as well as capacity building. The outreach of SACCOs has
 increased by 119% from 245,365 to 545,687 individual and group SACCO members, reaching an estimated 1.9 million households. The Share Capital in the SACCOs has increased exponentially from UGX 2billion to UGX33billion (more than 13 million dollars), while the loans given have reached UGX 96.1billion (almost 40 million USD).
One of the major challenges of the microfinance industry in Uganda, according to one of the participants, Mr Wilson Wamatsembe (Director, Business Development Services, Microfinance Support Centre), is the weak governance structures that have led to disintegration of many SACCOS as member’s funds were mismanaged. Sustainability remains a challenge, with about a third of the supported SACCOs not on the path to sustainability. A SACCO manager at the workshop  further pointed out the need for government to speed up the ‘SACCO Law’ to ensure that culprits of mismanagement of SACCO funds can be brought to book. Fortunately, one of the key results of the RFSP is the fact that with evidence based communication strategies, the project has influenced the tabling of the Tier IV regulation, which is soon to be signed into law.