ABOUT FSDU

Project Profile
OBJECTIVE: Strengthening the capacity of financial institutions in order to expand the provision of appropriate financial services, particularly to the rural poor.
DURATION: 5 years
BUDGET: GBP 7.1 million
FUNDER: DFID

Strengthening the Capacity of the Microfinance Sector in Uganda

The micro-finance industry in Uganda continues to grow rapidly in terms of increasing professionalism and outreach, as well as a changing regulatory environment. The desired outcome is a transition from an NGO dominated, unsupervised sector to a regulated and supervised one. This will improve the quality of financial services in rural areas, particularly by providing safer savings opportunities to poor and vulnerable people.

In order to improve the capacity of Uganda’s financial sector to meet the financial needs of poor rural and urban households, micro, small and medium enterprise on a sustainable basis, the UK government’s Department for International Development (DFID) established the Financial Sector Deepening Uganda (FSDU) programme and contracted ECIAfrica Consulting (Pty) Ltd. to manage it. 

The five year, £7.1m FSDU programme officially started in August 2001. The project was due to finish in July 2006 but was extended to 15th September 2007. FSDU’s goal is to generate sustainable improvements in the livelihoods of poor households through reduced vulnerability to shocks, increased incomes and employment creation. Its purpose is to deepen the capacity of Uganda’s financial sector to meet the financial needs of poor rural and urban households, micro, small and medium enterprises on a sustainable basis.

FSDU’s activities in the years 2004 to 2007 can be found in the respective Annual Reports following the links below.

The objectives and design of the project have evolved along with the evolution of the microfinance sector in Uganda. These changes reflect a better understanding of what is wanted and needed to bring a full range of financial services to more Ugandans, and also to complement and fill in gaps in the wide range of support already being offered by other actors.

In July 2004, DFID and FSDU (ECIAfrica) drafted a new logical framework, under which the project has five outputs, namely

 

1) Better Informed and Protected Consumers;

2) Improved Monitoring, Supervision and Regulation of Tier 4 MFIs

3) Improved Product Delivery and Development;

4) Development of a “Top end” sector characterized by a smaller number of large regulated financial institutions serving the needs of poor clients;

5) Increased dissemination of relevant information to Micro-finance Policymakers and Practitioners

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