The Support Organisation for Micro Enterprises Development (SOMED), a microfinance firm in the Kibaale District of Uganda was shut down in December last year while police claim they are investigating allegations of extortion, embezzlement and fraud. The company had been offering low-interest loans since 2004.
This event comes less than a month after the central bank in Uganda, the Bank of Uganda (BOU), issued a statement warning that customers in the country’s Savings and Credit Cooperatives (SACCOs) - a type of microfinance institution (MFI) not regulated by the bank - may lose their savings without the BOU being able to intervene or provide compensation for those clients that suffer. As a result, violence erupted at the headquarters of one of the SACCOs under investigation.
This is the latest twist in an on-going story highlighting the dysfunctional microfinance system in Uganda, which has been reported by MicroCapital. So far a number of SACCOs have been investigated by the police and shut down, with public worry about the system leading to satirical skits in the national theater.
However, it is unclear whether SOMED has been registered as a SACCO or is operating as a standard MFI, which means that Uganda’s problems may be expanding beyond the SACCO sector. SOMED is not one of the four MFIs that are currently regulated by the BOU.
In 2003 SOMED reached the shortlist of MFIs applying for the Rural Pro-Poor Innovation Challenge (RRPIC), with its plan to use RPPIC funds to help provide financial services to women in rural areas of Uganda. The RRPIC is sponsored by the International Fund for Agricultural Development (IFAD) in its effort to help the rural poor.
To learn more about this author, visit David Satterthwaite's Website.
Like this article? Share it with your friends
 |
Related Articles |
|
 Another Microfinance Institution (MFI) Closes in Uganda as Chaos Continues in the Sector
|
| |
The Support Organisation for Micro Enterprises Development (SOMED), a microfinance firm in the Kibaale District of Uganda was shut down in December last year while police claim they are investigating allegations of ...
|
|
Ugandan Government to Set up Laws for Regulating its Microfinance Sector
|
| |
During the 2007 Citigroup Micro-entrepreneurship awards ceremony in Kampala on January 10, 2008, State Minister for Microfinance, Caleb Akandwanaho announced that a new law regulating the activities of microfinance ...
|
|
Compassion International Invests USD 5 Million in Opportunity International to Develop Microfinance in Africa
|
| |
Compassion International, one of the world’s largest Christian child development organizations, will invest USD 5 million over the next five years in fellow Christian microfinance institution (MFI) Opportunity Inter...
|
|
International Year of Microcredit Advisors Visit Kenya and Uganda: Princess Maxima, Diederik Laman Trip and Marilou van Golstein Brouwers Promote Microfinance on the Continent
|
| |
In the third week of February 2005, The Netherlands' Princess Maxima, ING Netherlands Chairman Diederik Laman Trip and Triodos Bank Senior Fund Manager Marilou van Golstein Brouwers visited Africa to promote the Int...
|
|
What is a Microfinance Institution (MFI)?
|
| |
Quite simply, a microfinance institution is an organization that offers financial services to low income populations. Almost all of these offer microcredit and only take back small amounts of savings from their own ...
|
 |
Related Businesses - Evan Elite Authors |
|
The Evan Elite Authors program is currently in beta phase. For details please contact us.
|
|
|
David Satterthwaite
(Visit David's Website)
David brings 10 years of experience in
microfinance management, social
entrepreneurship, non-profit
management/fund-raising and microfinance
investment research.
David is the Chairman and President of
Prisma Microfinance, Inc., a retail
“microbank” operating in Central America.
He is also Chief Editor of
MicroCapital.org, a news and information
service for the microfinance community and
its investors. Each month,
MicroCapital.org publishes the
MicroCapital Monitor, the leading industry
newspaper.
David writes and speaks frequently on
microfinance. He has been a quest speaker
at many events, including: Microcredit
Summit 5+: Panel on Private Investment,
Milken Institute Global Conference, United
Nations Year of Microcredit Symposium for
Wall Street, Chicago Conference on
Microfinance, Harvard Social Enterprise
Conference, Dartmouth’s Business
Sustainability Conference, Wharton’s
Conference on Social Entrepreneurship,
Stanford’s Social Enterprise Club,
Columbia’s Social Enterprise Program and
the Net Impact Annual Conference. Through
his work with Prisma and MicroCapital, he
has been featured or quoted in The Wall
Street Journal, the Boston Globe, “All
Things Considered,” Reuters and
SocialFunds.com. David has been
recognized with the Compaq Computer
Corporation Leadership Award, the City
Year Inspiring Leader Award and the
National Social Venture Business Plan
Competition award for Best Social Impact
Analysis.
David has supported many non-profit and
for-profit social enterprises in different
capacities, including Access Technology
Learning Center, Agora Partnerships,
Bridges to Business, City Year, Fonkoze,
Kiva and National Social Venture
Competition.
David holds a B.A. with Honors in
Political Science from Haverford College.
|
|
 |
|
David Satterthwaite's
Complete
List Of
African-Accounts
Articles
|
|
If you enjoyed this article, get David Satterthwaite's Complete List of African-Accounts Articles For FREE!
|
|
|
|
![[Get Copyright Permissions]](http://license.icopyright.net/images/icopy-w.gif){kind=small}
