Microfinance Associations: The case of the Association of Microfinance Institutions in Uganda (AMFIU)

This paper is a GTZ-commissioned (now the GiZ) study on microfinance associations (MFAs) in Uganda (AMFIU) to identify the best practices and success criteria of MFAs. In addition, it:

• Reviews potential areas of cooperation for donors;
• Analyzes whether networks are appropriate partners for donor agencies.

The study outlines Uganda's macroeconomic development in the last decade, followed by a brief overview of the Ugandan financial and microfinance sectors. It also analyzes the history and overall objectives, organizational and membership structure, services offered and financial performance of AMFIU.

AMFIU was established to consolidate and stabilize the microfinance industry in Uganda, specifically by taking up the issues of:

• Regulation and supervision;
• Lobbying and advocacy;
• Information dissemination;
• Performance monitoring of MFIs;
• Capacity building and training.

The paper concludes by summarizing the learnings of the study and highlighting the challenges that lie ahead of AMFIU:

• AMFIU is seen as the most suitable institution for solving an essential part of the problems related to the microfinance industry;
• It needs to increase its rate of self-funding in order to become independent from external funds;
• Parameters for measuring the network's performance should include satisfaction levels of MFIs, outreach, improved policy environment due to the networks advocacy, efficiency and effectiveness with respect to the costs incurred and benefits accrues to the MFIs;
• AMFIU should seek to grow organically and not become overloaded.