VZCZCXRO8078
RR RUEHROV
DE RUEHKM #0411 0781325
ZNR UUUUU ZZH
R 181325Z MAR 08
FM AMEMBASSY KAMPALA
TO RUEHC/SECSTATE WASHDC 0136
INFO RUCNIAD/IGAD COLLECTIVE
RUEHSA/AMEMBASSY PRETORIA 3438
UNCLAS KAMPALA 000411
SIPDIS
SIPDIS
PLEASE PASS TO OPIC (R. GREENBERG)
E.O. 12958: N/A
TAGS: EINV EFIN EAID UG
SUBJECT: UGANDA: RESPONSE TO PROPOSED OPIC FINANCING
REF: STATE 21967
1. Per reftel request, Uganda's microfinance sector has grown
dramatically over the past ten years. This sector is now considered
well advanced, in terms of size and coverage, by sub-Saharan African
and broader developing country standards. Recently, a staff member
of the Bill and Melinda Gates Foundation visiting Uganda called
Uganda "one of the Silicon Valleys of microfinance in Africa."
2. Uganda's regulated micro-finance sector consists of four
Microfinance Deposit Taking Institutions (MDIs) and one commercial
bank (Centenary) that specializes in Micro, Small, and Medium Scale
(MSME) finance. In addition, there are more than 1,000
non-regulated, mostly urban or semi-urban, Microfinance Institutions
(MFIs), and at least 1,000 rural and community based Savings and
Credit Cooperative Organizations (SACCOS). The Association of
Microfinance Institutions of Uganda (AMFIU) represents the MFI and
SACCOS organizations.
3. Through two projects, the Savings Promotion and Enhancement of
Enterprise Development (SPEED) and Rural SPEED, the Ugandan
microfinance and microenterprise sectors have benefited from USD 42
million in USG funding from 1997 to 2007. USAID is working to
design another project, Livelihoods and Enterprises for Agricultural
Development (LEAD), which should be implemented in the final quarter
of 2008. LEAD will focus on raising rural productivity and incomes
through selected support for agricultural value chains. It will
consolidate USAID's past efforts to promote rural finance and
agricultural development. Of the USD 35 million estimated cost of
the five-year LEAD project, USD five million will support
microfinance and microenterprise value chain linkages in the coffee,
cotton, livestock (including fresh and processed fish), and staple
foods (e.g., cereals and oilseeds) sectors.
BROWNING