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Last modified on Sunday, 28 April 2019 06:23

BRAC Microfinance transforms into regulated bank in Uganda Featured

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BRAC, the largest microfinance provider in Uganda, is transforming as a Tier 2 Credit Institution (CI) to broaden the range of financial services it provides to Uganda’s low-income communities. On behalf of the president, First Deputy Prime Minister General Moses Ali formally inaugurated the newly licensed institution - BRAC Uganda Bank Ltd (BUBL) at a ceremony held at the bank’s Kabuusu branch on April 25th 2019. Evelyn Anite, the State Minister of Finance for Investment and Privatization was also present at the ceremony.

BRAC started its microfinance programme in Uganda in 2006, growing its footprint to 163 branches across 84 districts with more than 200,000 clients. As part of its commitment to ensuring greater financial inclusion, especially for marginalised women in rural and low-income communities, BRAC has been pursuing a change in its regulatory status that would allow it to expand the scope of its financial services. The transformation will enable BRAC Uganda Bank Ltd to offer savings accounts, money transfer, insurance and other financial services in addition to its existing credit products to the people of Uganda.

In his remarks, First Deputy Prime Minister General Moses Ali said, “BRAC has a specific focus on women, youth and rural population. I am very much pleased that these are also the three priority areas of the comprehensive strategy that the Ugandan Government developed for financial inclusion”

“We are honoured and excited to have this opportunity to strengthen our ties with Uganda and contribute further in improving access to safe, reliable and fit-for-purpose financial services through our new banking operation. BRAC believes that given the right opportunities and tools, people living in poverty can turnaround their own lives. BRAC Uganda Bank will remain true to our core mission of enabling communities, particularly women living in poverty in rural, urban and hard to reach areas so that they can realise their potential,” said Shameran Abed, Senior Director of BRAC’s Microfinance and Ultra-Poor Graduation programme. “Our increased range of financial services will enhance self-employment opportunities, build financial resilience, and better harness our clients’ entrepreneurial spirit,” he added.

The transition from a Tier 4 credit only NGO to a Tier 2 CI will allow BRAC to drive more impactful financial inclusion at an even greater scale. "Our clients can now have the confidence and trust of saving at a formal institution, a critical component that ensures resilience for low-income households in times of social or economic shocks", said Jimmy Adiga, the CEO of BUBL.

As a part of the transformation process, BRAC has partnered with three mission-aligned investors - DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH, the German development finance institution, Equator Capital Partners, the experienced fund manager investing in financial inclusion, and Triple Jump, the Dutch impact-focused investment-manager advising the ASN Microkredietpool fund. The equity partners each bring unique value and expertise to BUBL and are excited to join BRAC in providing affordable and responsible financial services to the people of Uganda.

BRAC has hosted day-long events with its staff, partners, clients, regulators and other stakeholders to celebrate this hallmark achievement. Following the ceremonial opening in the morning by the First Deputy Prime Minister of Uganda, General Moses Ali at the head office branch of the bank, a launch event with the broader community of stakeholders took place at the Victoria Hall of The Kampala Serena Hotel later in the evening. Mr Mackay Aumo, Director of National Payments System, of Bank of Ugada delivered speech on behalf of the Deputy Governor of the Bank of Uganda.

About BRAC and BRAC Uganda Bank Ltd

BRAC started as a limited relief operation in 1972 in a remote village in Bangladesh and has grown to become the largest development organisation in the world impacting the lives of 1 in every 55 people on the planet. BRAC uses a holistic approach to development engaging a wide range of tools to promote inclusion such as microfinance, health and nutrition, education, youth, agriculture and food security, research, community empowerment, disaster management and climate change, targeting ultra-poor, social enterprises, water, sanitation and hygiene, poultry and livestock. BRAC was ranked the number 1 NGO in the world in 2019, for the fourth year in a row, by the Geneva-based organization, NGO Advisor.

BRAC’s first international expansion was into Afghanistan in 2002 and it currently has affiliates in 13 countries with a focus on Asia and Africa. In Uganda, BRAC has been working since 2006 to advance women’s empowerment, provide education for children and adolescent girls, address gender-based violence issues, improve livelihoods and skills for smallholder farmers, and support people to lift themselves out of ultra-poverty through its NGO entity. BRAC’s microfinance activities in Uganda have been carried out under a separate entity, BRAC Uganda Microfinance Ltd (“BUML”). From 2008 to 2018 BUML increased borrower numbers from approximately 60,000 to over 200,000, and its branch network from 61 to 163. In 2016 the decision was taken to transform into a Tier 2 Credit Institution, and after completing all the regulatory requirements, BRAC received the licence as “BRAC Uganda Bank Ltd” in March 2019.

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