Microfinance encourages the culture of saving and investment by the most impoverished people. Secondly, microfinance is designed to make loans more accessible to these people since they are usually turned away by commercial banks.
These banks demand that people provide valuable collateral like land, titles, and permanent structures before they can be given loans. Yet, impoverished people often do not have these things even though they desperately need loans.
Ever since the mid-1990s, the Ugandan government has been encouraging the development of microfinance in the country because a properly run microfinance institution can offer many distinct benefits to a poor community. Microfinance institutions are often located in rural areas which give people the opportunity to save the little they have. They also charge lower interest rates than commercial banks because they use different methods to establish credit worthiness. But these things are not all that microfinance has to offer.
The development challenges that KIDA’s communities have are not unique compared to the rest of the country. KIDA’s approach to these problems, on the other hand, has been unique and sets us apart from other microfinance institutions. We provide intensive training for those who wish to become members of the SACCO in order to ensure that people know how to use their loans optimally and also to ensure that they are able to effectively plan for the repayment of that loan.
We also educate and sensitize people on the microfinance process over the radio, on an individual basis and at the group level.
On the administrative side, we have conducted several marketing campaigns that have contributed to a dramatic increase of membership which is currently at 504. We anticipate increasing the maximum loan amount as our membership and thus our capacity to lend increases.
Finally, we have broadened our membership base to include any person who is able to save with us regardless of his or her HIV status.
For more information about Kitojo AIDS Care SACCO, please contact:
Mugisa B. Deogratius
Tel:+256 777 828 280.
Mails to KIDA, P. O. Box 128,
Fort Portal, Uganda