The Transparent Pricing Initiative in Uganda has published standardized pricing data from 23 institutions, representing an estimated 85% of Uganda’s microloan borrowers. Launched in 2011 the Initiative is delivered in partnership with Planet Rating and AMFIU (Association of Microfinance Institutions in Uganda), and is funded by the MasterCard Foundation.Microfinance in Uganda
For the purposes of data collection, microloans in Uganda are defined as products with loan amounts less than UGX 15,000,000 (USD5,700). MFTransparency presents data for microloan products that have over 50 active borrowers and that have had more than 10 loan disbursements over the past 9 months
The regulatory landscape of Uganda’s microfinance sector is shaped by the diverse range of institutions providing microfinance services and the regulatory authorities overseeing them. Commercial banks, credit institutions, and MDIs fall under the Bank of Uganda regulatory framework. Categorised in to a four tier supervisory and regulatory framework, these institutions are governed by various laws and guidelines. SACCOs are supervised by the Department of Cooperatives within the Ministry of Tourism, Trade and Industry and NGOs are monitored by the National Board of Non-governmental Organizations housed at the Ministry of Internal Affairs.
Laws establishing a consumer protection policy and regulatory guidelines addressing truth in lending do not yet exist. However, there are a handful of independent organizations addressing this field in Uganda. Chief amongst these are the Uganda Consumer Protection Association (UCPA) and the Consumer Education Trust (CONSENT). AMFIU presents guidance in terms of financial consumer protection with its Consumer Education and Transparency Program, the Consumer Code of Practice and the Consumer Financial Education Handbook.
The price graph presented below shows the prices of all the microloan products in the Uganda dataset. Each data-point represents a real loan given to a real borrower, calculated using original loan documentation from the institution. The size of the data-point correlates with the number of borrowers that have a loan of that product at that loan amount. The color of the data-point correlates with the Transparency Index of the sample – the lighter the colour the more transparently priced the loan product. The interactive legend beneath the graph can be used to change the graph axis and labels. Try the custom feature to see price correlations with attributes such as loan purpose, institution type, loan term and percent of gross national income.
The dataset for Uganda comprises of 67 microloan products offered by 23 microfinance service providers. A classic curve in the market average APR is seen, showing that loans of a smaller size rise dramatically in price. The data indicates a strong correlation of loan products with lower prices being advertised with a more transparent price.
In this graph, the y-axis indicates the “Full APR”, defined by MFTransparency as the price including interest and all required fees, insurance, taxes and security deposits. This full price is then annualized with a nominal compounding procedure. For additional price calculations, refer to the “product sheets” for each loan product.
|Institution||# Borrowers||Portfolio (US$)||Products||Transp. Index||Participating Since||Age of Data|
|Centenary Bank||133,802||221,144,231||4||69||2011-Jun||70 mos.|
|EBO SACCO||1,500||1,240,382||2||71||2011-Jun||70 mos.|
|Equity Bank||13,069||57,252,004||0||NA||2011-Jun||70 mos.|
|Finance Trust||22,555||17,520,424||5||34||2011-Jun||70 mos.|
|Five Talents||5,365||368,057||2||33||2011-Jun||70 mos.|
|Habitat Uganda||858||265,508||1||47||2011-Jun||70 mos.|
|Madfa SACCO||4,832||288,674||5||45||2011-Jun||70 mos.|
|Rushere SACCO||983||574,549||2||91||2011-Apr||70 mos.|
|Silver Upholders||2,111||189,189||4||42||2011-Jun||70 mos.|
|VF Uganda||13,072||3,221,675||5||47||2011-Jun||70 mos.|