THE MICROFINANCE SUPPORT CENTRE LIMITED (MSC) – ACHIEVEMENTS MAY 01, 2008 – APRIL 30, 2011.

The Microfinance Support Centre Limited (MSC) is a Government owned incorporated in August 2001 as a company limited by guarantee with support f r o m the Government of Uganda (GOU) and the African Development Bank [AfDB] through the Rural Microfinance Support Project (RMSP). MSC was set up to provide credit and institutional capacity building services to the economically active and productive Ugandans.

The Annual General Meeting (AGM) of the company is composed of 3 members represented by; 1) the Minister of Finance Planning and Economic Development, 2) the Minister for General Duties , Office of the Prime Minister and, 3) the Minister of State for Microfinance, Ministry of Finance Planning and Economic Development.

The Company has an 8 member Board, with an Executive Director and Deputies—all Ex Officio members of the Board.

The company reports to the Ministry of Finance Planning and Economic Development and in particular to the Department of Microfinance for Policy Guidance.

Under its first Strategic Plan (SP) that run from 2003 to 2008, the company championed the Vision “To become a leading facilitator of access to sustainable Financial Services by all economically active and productive Ugandans”. The Mission was “To provide sustainable Financial Services to the economically active poor in Uganda through viable Partner Organisations and build their capacity”.The Company Motto was “Financial Services for all”.

In February 2009, the company launched its second Strategic Plan covering the period2009 to 2014. The Company’s vision under the new SP is “AN ECONOMICALLY TRANSFORMED SOCIETY”. The Mission is “To facilitate access to affordable, sustainable and convenient financialand business development services to active and productive Ugandans”.

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MSC is the linchpin of GOU micro credit programs under the Rural Financial Services Strategy (RFS) which is the 4th Pillar under the Prosperity For All Program (PFA). It offers affordable credit through loan products that support the Agricultural production value chain namely; production, value addition and marketing. MSC also offers Business Development Services to her clients.

2.0 HIGHLIGHTS OF THE MSC STRATEGIC PLAN 2009-2014.

The first Strategic Plan (SP) of the company covered the period 2003 to 2008. The second SP covers the period 2009 to 2014. It was developed through a thorough collaborative and consultative process that involved the Board, Members of Parliament, Ministry of Finance, Planning and Economic Development, key stake holders and members of the staff of MSC.

The SP spells out a shared Vision, Mission, and Strategic Objectives of MSC for the five and half years. It also identifies key areas to be addressed in both functional and cross cutting areas in order to achieve the set objectives. It a s w e l l outlines strategies, activities and gives indicative costs of implementing the SP.

The SP and Business Plan were both approved by both the Board and the AGM and also got a buy-in from the MFPED. The major high lights of the SP are summarized by 4 Pillars, their respective Strategic Goals and Objectives. The 4 Pillars are; 1) Institutional Development, 2) Market and Product Development, 3 ) Collaboration and Synergy and, 4) Business Development Services.

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No. Pillar Strategic Goal Strategic Objectives ACHIEVEMENTS1 Institutional

DevelopmentTo enhance the capacity of MSC to deliver rural financial services

1.1 To mobilize sufficient financial resources so as to be able to effectively deliver rural financial development services

1) Government of Uganda finances credit and operational activities2) Secured additional GoU, AfDB & IsDB facility of $ 27m of which 24.07 is for Credit & 3.3 for Business Development Services

1.2 TO enhance the capacity of the human resources for effective and efficient services delivery

1)New Human Resource Manual2)Man power more than doubled from 50 to 102.3. Staff training instituted for better credit delivery and customer relations.

1.3 To strengthen the effectiveness of management and operating systems and processes

Systems have been put in place & streamlined – Manuals have been developed and approved by the Board:1) Operational Manual aligned to client requirements 2) Audit manual –there was none before3) Business Development /Collaboration Manual – there was none before4) Board Charter to guide the Board in its oversight role – there was none before 5. Human Resource Manual -aligned to new MSC focus

1.4 To enhance the image and identity of MSC as a rural financial services organization.

MSC was hardly known in the country. A mobilization drive was carried out targeting leaders and communities of all types and levels. This was done through workshops/seminars, radio, TV etc

2 Market and Product Development

To maximise outreach and deliver demand driven credit

2.1 To effectively and efficiently deliver services to all qualified clients

1) Client mix has been reversed – 80 % were Commercial MFIs and only 20% SACCOs. Now 80% of clients are SACCOs benefiting from 80% of the available credit. 2) SACCO clientele were only 300. This has risen to over 1000 SACCOs. 3) We now lend directly to Cooperative Unions like Lango, Kigezi, Nyakatonzi in Kasese etc.4) Loan disbursement by year has increased from 3.9 b (2008) to 16.1 b (2009), 22.3 b(2010) and 26.5 b (2011). Cumulatively adding up to 65 billion UGX since the implementation of the New SP

2.2 To develop at least one product for each client segment over the next five years

2) Environmental loan – climate mitigation, power, soil & water conservation etc3) Vulnerable groups loan – women, youth, PWDs, Older persons 4) Business Development Support

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– MIS, Audit support etc5) Microenterprise loan 6) SME loan - includes leasing options for SMEs that have working capital and asset acquisition needs

2.3 To increase loan portfolio by 75% per annum

Has been surpassed! Achievement is over 500% over the 3 year period

2.4 To maintain portfolio at risk (P.A.R) past 90 days at 5%

Has been achieved.

3 Collaboration and Synergy

To expand and deepen financial outreach through increased collaboration & synergy between key players in rural development

3.1 To establish and operationalize a formal and fully functional collaboration framework with key stake holders in rural development

Framework in place and operating with institutions implementing PFA but not functional at policy level. Local governments, NGOs and private agencies have been brought on board.

4 Business Development Services

To assist MSC clients upgrade their capacity to manage their business profitability

4.1 To identify and fill capacity building gaps of clients

Resource constraints a big handicap. Being overcome through Collaboration and Synergy arrangements with NGO’s and private agencies.

4.2 To strengthen MSC capacity to effectively deliver business development services to its clients

RIEEP has come on board to support this objective. Implementation models handicapped by AfDB procurement guidelines and internal procurement capacity.

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