The Rural Financial Services Programme

1. The Rural Financial Services Programme Overview Interventions Achievements LESSONS LEARNT Way forward

2. Background –RFSP I Phase 1: - 2003 – 2007 Support 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 MFIs Results of BCF • 39,591 individuals trained in Business Skills and Attitudes • 1,162 Enterprise Groups Formed

3. 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

4. Components of RFSP II

5. Implementing Arrangements Phase 2: 2008 - to - 2013 RFSP is Managed by a Programme Administrative Unit (PAU) along with Private & Public Sector Implementing Agencies: - • Uganda Cooperative Savings & Credit Union (UCSCU) • Association of Microfinance Institutions of Uganda (AMFIU) • Uganda Cooperative Alliance (UCA) • Uganda Cooperative College Kigumba (UCCK) • Ministry of Trade Industry and Cooperatives (MTIC) • Department of Microfinance (MFPED) NB. Each of the above was Providing Specialized Services to SACCOs as Detailed in the Table in the next slide

6. Implementing Agencies – Key Roles

7. Achievements We Look at Achievements in 3 Aspects: - • 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) • SACCO Apexes • SACCO Overall Industry

8. Achievements – SACCOsPhysical Items & Knowledge Provided to SACCOs

9. Achievements – SACCOsPerformance – Outreach, Savings & Loans

10. Achievements – SACCOs Sustainability Prospects

11. 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)

12. Achievements - Industry • Computerization of SACCO Registry at MTIC • Update of SACCO Registry • SACCO Census 2011 • SACCO Census 2012 • National SACCO Mapping Exercise • SACCO Maps Showing Overall Coverage • SACCO Maps Showing Regulation • Support to Regulation & Supervision • Principles for Tier IV Regulation Passed by Cabinet • Draft Law being initiated by First Parliamentary Council

13. Lessons from RFSP • Stakeholder Involvement - There is need for sustained involvement of stakeholders in development of Microfinance sector generally and SACCOs specifically • 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 • SACCOs Appropriate Mechanism - Banks and MFI have limited outreach. Thus need to strengthen networks and consolidate SACCOs for Expansion

14. Lessons from RFSP • Microfinance Beyond SACCOs – Some Regions may have more appropriate mechanisms for financial inclusion rather than SACCOs. • Manageable Numbers – Focus on a few SACCOs but with Potential for Sustainability and increased Outreach • Regulation and Supervision – Is a very critical factor in preventing the numerous fraud in SACCOs. • Incremental Investments – Institutional Capacity Building takes time, there is need for future interventions to build on the current project

15. Lessons from RFSP • Grant Support to Apexes –Performance Based Grants tied to specific activities would yield better results • Beneficiary Contribution – In Kind Grants (Actual Goods) and Cash Grants (Such as Cost Subsidies) without beneficiary contribution promote dependency syndrome among beneficiaries

16. Innovations from RFSP The field level Financial Extension System (FEWs). The mentoring approach of imparting technical skills to leaders and staff of SACCOs.

17. 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 Attachment • Data 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

18. 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

19. Preparatory Activities for PROFIRA • Approved Principles for Tier IV Regulation • Progress with PROFIRA Approvals • Ministry Development Committee Approval • Cabinet Approval • Parliament Approval GUIDANCE REQUIRED FROM MFPED • Proposals for formulation of Project Sub-Component on Regulation • Specific Roles – DMF • Specific Roles - MRA • Specific Roles - MTIC

20. Rationale for PROFIRA Goal Increase Income, Improve Food Security & Reduce Vulnerability in Rural Areas Development Objective Sustainable Access to and Use of Rural Financial Services

21. Underlying focus of future Support • Sustainability • Lessons Learnt from the Past • Client Protection • New Technologies • Linkages with Agriculture • Donor Coordination

22. Underlying Principle s - PROFIRA • Savings-First for Community Based Financial Institutions • Member-Based Nature of Grass Roots Financial Institutions • No trade-Offs between Outreach & Sustainability • Financial Inclusion through diversified supply of Financial Services • Multiple Implementing partners for Better Quality Services

23. Components of PROFIRA The 3 Components Include: - • SACCO Strengthening & Sustainability • Community Based Financial Services • Project Management

24. Component 1 1.0 SACCO Strengthening & Sustainability The Component focuses on Support to Savings & Credit Cooperative Societies (SACCOs) Sub Components Include: - 1.1 SACCO Strengthening 1.2 Developing a Sustainable SACCO Apex 1.3 Innovations & Technologies 1.4 Policy Regulatory & Institutional Environment

25. Component 2 2.0Community Based Financial Services The Component focuses on Support to Community Savings & Credit Groups (CSCGs) Sub Components Include: - 2.1 Establishment of New CSCGs 2.2 Graduation and Linkage of CSCGs 2.3 Establishment of MIS for CSCGs

26. Component 3 3.0 Project Management Unit This Component involves staffing and operations of the Project Management Unit (PMU) under MFPED Sub Components Include 3.1 Knowledge Management 3.2 Monitoring & Evaluation

27. 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

28. IMPACT Short Documentary showing SACCO beneficiaries tell their story!

29. =THANK YOU=