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UGANDA FINANCE TRUST LIMITED

UGANDA FINANCE TRUST LIMITED. Key issues in Microfinance Service Provision- Challenges of Stakeholder collaboration The case of Uganda A presentation at the AFRACA Microfinance and Rural Finance Workshop held on 6th-to 8th June 2005, in Kampala, Uganda. By Okaulo Peter.

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UGANDA FINANCE TRUST LIMITED

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  1. UGANDA FINANCE TRUST LIMITED Key issues in Microfinance Service Provision- Challenges of Stakeholder collaboration The case of Uganda A presentation at the AFRACA Microfinance and Rural Finance Workshop held on 6th-to 8th June 2005, in Kampala, Uganda. By Okaulo Peter

  2. Key issues in Microfinance Service Provision- Challenges of Stakeholder collaboration MENU • Appetizers: a couple words of wisdom as jump starters. • Main course: • Background to microfinance in Uganda • Profile of finance sector • Role of stakeholers • Response of MFIs • Building collaborative relations and its challenges • Desert: • The way forward and conclusion

  3. Key issues in Microfinance Service Provision- Challenges of Stakeholder collaboration Words of wisdom: “…Thinking alone is no longer adequate. The problems are too complex, interdependencies to intricate and the consequences of isolation and fragmentation too devastating…”, William Isaacs, 1996.

  4. Key issues in Microfinance Service Provision- Challenges of Stakeholder collaboration Words of wisdom: “…The nut and the screw form a perfect combination not because they are different, but because they exactly fit into each other and together they can perform a function which neither could perform half or alone or any part of alone…”, Mary Parker Follett, 1940.

  5. Key issues in Microfinance Service Provision- Challenges of Stakeholder collaboration Words of wisdom: “…Two are better than one, because they have a good return for their work…if one falls down his friend can help him up… if two lie down together, they keep warm, but how can one keep warm alone?...two can defend themselves…a cord of three strands is not quickly broken..” Ecclesiastes 4: 9-12. (over 20 centuries ago)

  6. suppliers Microfinance institutions: CONVERTERS goods and services for CONSUMERS employees investors Key issues in Microfinance Service Provision- Challenges of Stakeholder collaboration • Input-output model

  7. Key issues in Microfinance Service Provision- Challenges of Stakeholder collaboration • Stakeholder model Employees government Dev. agencies MFI customers suppliers Donors communities investors

  8. Evolution of stakeholder theories

  9. Summarized microfinance statistics as at December 2003

  10. Sample of stakeholders

  11. Impact of global powers on development paradigms

  12. Paradigm shifts

  13. Impact on Governments • Government should not intervene, rather it should create an enabling environment for development • New global policy trends: globalization, internationalization, liberalization, deregulation, good governance, privatization, regional trade blocks • A radical move from Socialist to Market Oriented approach to business and development

  14. Impact on microfinance industry • Old strategies do not work • Old boundaries are gone • Old customer loyalty is dead • Old ‘snail pace’ can not work in a Swift world • new actors think globally but act locally • Best practices are no longer best • The regulators are itching to bite • The market is but a big jungle, who will survive?

  15. The Impact On MFIs • High turbulence and acute uncertainty • Increased Competition from the least expected quarters • Cultural re- orientation • New skills, new workers and wholly unprecedented socio-economic conditions • Bigger pressure for Knowledge, finance and other resources to be able to adapt • Corporate survival requires a form of glasnost- openness to imagination, tolerance for deviance and individuality • Thinking alone and doing it alone can not work any more

  16. Is Collaboration-a bed of roses? What are the challenges?

  17. Way forward: strengthen collaborative stakeholder relations

  18. Conclusion “…Thinking alone is no longer adequate. The problems are too complex, interdependencies to intricate and the consequences of isolation and fragmentation too devastating…”, “…Two are better than one, because they have a good return for their work…if one falls down his friend can help him up… if two lie down together, they keep warm, but how can one keep warm alone?...two can defend themselves…a cord of three strands is not quickly broken..” Therefore we must collaborate to fight poverty

  19. Thank you for listening

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