In a bid to facilitate robust financial inclusion and boosting livelihoods for vulnerable groups in western Uganda, the Financial Sector Deepening Uganda offered a sh 6.23billion onward lending grant to Mushanga Sacco to be lent to women between the age of 18-35, PWDs and Refugees at an interest rate of 15% per annum.
"Boosting livelihoods for our local women, people living with disabilities and refugees is now our aim since these havent been largely involved in the money economy," Golden Nankunda the general manager for Mushanga Sacco noted.
Unlike other borrowers, borrowers from the target groups will access this money even when they don't collateral however co-guaranting will be a must to avoid defaults since this is a revolving fund.
"We understand that lending to a refugee is the most challenging thing and this being a new product we have several strategies in place to ensure we don't register defaulting."
Lack of collateral and substantive sureties have always been key hindering blocks for women, refugees and PDWs to borrow money for their business growth.
"Traditionally, women don't own property and that means you don't have collateral because most of the banks want you to put there something for you to get money," Kibaaju Naome, the MP for Sheema North asserted.
Even those who have collateral are normally restricted by their spouses to independently mortgage them in banks.
"Some women their husbands are not allowing them to independently monies from the bank and run their own business. They want to work with them which sometimes retards business growth" Kibaaju further noted.
Financial Sector Deepending Uganda has now come in crack this deadlock and according to the sector players, the target groups will now start accessing money without any hurdle.
"Currently we're undergoing training to equip us with skills on how to deal with them because majority of them don't have securities but they need money,"Nankunda noted adding in this situation, they will adopt to co-guaranting one another so that if one defaults, another one can pay back.
The grant is inform of a revolving fund meaning that beneficiaries must pay back in time to enable others to also borrow.
Relatedly, Financial Sector Deepening Uganda has moved to fight multiple borrowing through their credit scoring project which is intended to aid data driven credit decisions.
Savings and credit cooperative organizations which are yet to have financial cards as a loan tracking tool are required to adopt to this mechanism to access loan information for their clients through mobile phones.