The AfriCap Microfinance Fund (AfriCap) completed an investment on December 19, 2003 of 2 billion Ugandan Shillings, about US$1 million, in PRIDE UGANDA. The investment was in the form of a convertible debenture, structured to support PRIDE’s transformation into a regulated financial intermediary under the recently launched microfinance regulatory regime in Uganda.
Microfinance, the provision of a range of financial services to low income entrepreneurs, makes a critical contribution to the fight against poverty by providing them with the small scale financing they need to start and grow income-generating businesses. African MFIs are realizing that only by accessing the capital markets will they be able to raise the funds required to finance growth and ensure their long-term sustainability.
PRIDE UGANDA is the dominant MFI in the country, with the largest client base and branch network. At December 31, 2003, its total loan portfolio was equivalent to US$ 8,858,130 with a total of 60,940 clients and $4,103,917 in savings.
Started in 1995 as a donor project, PRIDE UGANDA became an independent institution in 1999 and it is presently embarked on a transformation process to become a micro-deposit taking institution (MDI) licensed by the Bank of Uganda. Grace Musoke, PRIDE UGANDA’s Chair, said, “I am extremely pleased to note that AfriCap has decided to make a significant Ug. Shs. 2 billion Convertible Debt Investment in PRIDE UGANDA, the leading Micro Finance Institution in the country. This strategic business decision, on the part of AfriCap, will definitely send a very clear signal to other potential Commercial and Social Investors, who are currently considering making similar investments in PRIDE. Africap’s investment, the first of its type in our institution has definitely strengthened PRIDE’s transformation plans to achieve MDI status within the Micro Finance Industry in Uganda.”