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Police in Uganda Investigate Front Page Micro Finance and Three Other Microfinance Firms

Guest post by: David Satterthwaite

Article Overview: Ugandan Police are investigating four savings and co-operative credit organisations (SACCOs) suspected of fraud. They are alleged to be cheating their clients and making withdrawal of deposit money very difficult. The organisations are Front Page Micro Finance, Faster Micro Finance, Savings and Credit Cooperative Society Support Uganda Finance Limited and Stade Rugando Finance, all based in Kampala. According to the police up to 50 people have made complaints against the firms, accusing them of refusing to fulfill withdrawal requests completely and offering high-value loans against low-value collateral.

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Police in Uganda Investigate Front Page Micro Finance and Three Other Microfinance Firms

Ugandan Police are investigating four savings and co-operative credit organisations (SACCOs) suspected of fraud. They are alleged to be cheating their clients and making withdrawal of deposit money very difficult. The organisations are Front Page Micro Finance, Faster Micro Finance, Savings and Credit Cooperative Society Support Uganda Finance Limited and Stade Rugando Finance, all based in Kampala. According to the police up to 50 people have made complaints against the firms, accusing them of refusing to fulfill withdrawal requests completely and offering high-value loans against low-value collateral. Kampala Extra Region Police Spokesman Simeo Nsubuga said, “We have summoned the bosses of these institutions and they have recorded statements at CPS (Central Police Station) in Kampala. We are investigating them and their institutions. So far no charges have been preferred against them because the cases are still under investigation.” As a result there are reports that hundreds of clients of the largest firm under investigation, Front Page, flocked to their offices to withdraw their money.

Uganda’s SACCOs are a rapidly expanding network of credit unions that have developed to provide finance to low-income households. There are now approximately 2,000, 40% more than in 2000. Of these, 1,400 are fully registered while 600 are on probation. However, a report by the Consultative Group to Assist the Poor (CGAP) in 2005 reported that overall access to financial services is still very low in the country, with only 4% of the population saving with SACCOs.

The World Council of Credit Unions (WOCCU), a worldwide development agency supporting credit unions, claims that one of the biggest challenges facing Ugandan SACCOs today is the lack of a legal framework and supervisory system that can help protect member savings and generate confidence. They are working with the Ugandan government to prepare all Ugandan SACCOs for government supervision to develop the credit union legislation and regulation that are currently lacking.

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Home > African-Accounts > David Satterthwaite > Police in Uganda Investigate Front Page Micro Finance and Three Other Microfinance Firms
Article Tags: central police station, cgap, consultative group, cooperative society, credit union legislation, deposit money, expanding network, government supervision, income households, legal framework, member savings, micro finance, police spokesman, supervisory system, ugandan government, ugandan police, value loans, withdrawal requests, world council of credit unions, worldwide development

About the Author: David Satterthwaite
RSS for David's articles - 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.

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