RTS Financial Analysis: Evaluation of Three Business Models Tested in Uganda Pilot

This paper attempts to answer the question "What changes in operating philosophy, methods and infrastructure" are needed to allow scaling of microfinance services orders of magnitude more rapidly. It examines the Micro-development Finance Team's (MFT) pilot program in Uganda.

The paper presents the following features of the MFT pilot program:

• Objective - to champion a breakthrough in effectiveness, relevance and scale of financial services to the world's urban and rural poor;
• Focus - to positively impact four key levers to scale: operational costs, financial costs, capital flow and industry dynamics;
• Attempt - to understand how revenue and expense drivers can be captured for ongoing analysis of how the pilot and participating MFIs are achieving the goals set forth by the MFT.

The paper examines the following for Uganda:

• Favourable factors;
• Microfinance sector;
• MFT affiliates;
• The financial model - its features, objectives and activities;
• The RTS financial analysis.

The study finds that:

• Solutions need to enable MFIs to serve the needs of their customers, while co-effectively improving business operations;
• MFIs must grow their client base, allowing them the economic advantages associated with size;
• MFIs can expand their operations geographically, in order to reach a larger client population;
• MFIs must reach un-served clients in rural areas in developing countries.

The paper concludes by listing areas that pose potential risks for the success of the RTS pilot project and the future viability of the RTS.