It is my distinct pleasure and honor to be part of this great milestone when AMFIU is hitting 25 years in operation. I wish to take this opportunity to highlight a few developments, observations and challenges in the sector.

Looking back 25 years ago, we celebrate the strides that AMFIU has taken as an association. It is the coming together of the very few existing microfinance institutions then that led to the government recognition of microfinance as a key enabler of economic development among the low income earners. Infact, it is AMFIU’s lobby efforts that led to the enactments of the MDI Act 2003, the establishment of the Financial Servces Department under the Ministry of Finance, whose original name was the “Department for Microfinance” and the appointment of a State Minister for Microfinance among many other things. Thus the Lord has brought us and we are grateful.

AMFIU has continued to promote responsible finance because we believe that it is key to increasing consumer confidence in the sector. Increasing access to finance without creating consumer confidence will still leave financial services un-utilized. Therefore, the need for stakeholders in the sector to boost compliance to consumer protection, coupled with ESG, will help in building resilient institutions with a focus on customer centricity.

While financial institutions can be credited for leveraging on the technological Innovations to help in reducing transaction costs and ultimately the cost of borrowing, the majority of the micro-entrepreneurs still require attitude change to embrace digital financial services. AMFIU, with support from some development partners have embarked on the digital financial literacy education for customers of their members but the scope needs to be widened if we are to effectively ensure that technology is used to reduce the barriers to access to finance.

The low and volatile income levels of micro-entrepreneurs, inflationary environments, high illiteracy rates, inadequate infrastructure, governance challenges, and high costs of transactions are some of the barriers to access to finance on the demand side. On the supply side, the MFIs and SACCOs are constrained by limited sources of capital, and the high cost of funds which makes their funds relatively expensive and other financing sources such as equity markets remain underdeveloped in Uganda.

Bringing financial services to the rural customers has still remained a major challenge on the financial inclusion agenda. We hope that government support in building conducive infrastructure to lower the cost of acquiring technology equipment and working with various stakeholders to reduce operational costs of running digital platforms will help ease the challenge of access to financial services in rural areas.

As the covid pandemic seems to be getting behind us, we are hopeful for a rejuvenated sector although we are cognizant of the fact that its effect will linger around for some time. Some of the lessons that we learnt through this challenge is that technology can no longer be avoided and that customer focus and stakeholder relationships are key to survival of any business. In this regard, we are hoping to place more emphasis on supporting our members’ digital journeys through training for both the MFIs and their customers, providing information on appropriate and affordable solutions on the market and linking them to potential funders to support their digitization process. We will also place emphasis on ESG (Environment, Social and Governance) as this is a global trend and if our members are to compete for the limited resources on the market from development partners, they will need adopt this.