How FCL Helped ENCOT Microfinance to Grow Financial Inclusion
At FRIENDS Consult Ltd (FCL), we deliver tailored consulting solutions to financial and business entities just like ENCOT Microfinance Limited (ENCOT) to enhance sustainable growth, regulatory compliance, and operational excellence. ENCOT’s Finance and Accounting Policies and Procedures Manuals, developed in July 2023 with FCL expertise, is an example of FCL work in boosting operational excellence. Proper financial management, based on sound principles and the right digital tools, is key microfinance growth and impact.
Value to ENCOT
Policy Development and Compliance Support: The FCL work enabled ENCOT to align more with microfinance sound practices, good financial controls, IFRS reporting requirements, and compliance with Ugandan laws like the Tier 4 Microfinance Institutions and Money Lenders Act 2016. For ENCOT, this involved structuring detailed sections on accounting policies, loan impairment, revenue recognition and de-recognition, accounting for assets and liabilities (in line with per UMRA[1] guidelines), chart of accounts, authority levels and similar aspects. These become a guiding light for the institution.
Operational Efficiency and Training Tools: Whenever we undertake such an assignment, we also assist clients to create comprehensive manuals which serve as training references and promote consistency in processes like cash management, bank reconciliations, payroll activities, and zero-based budgeting. ENCOT’s manuals, with the annexed forms like LPOs, Invoices, bank reconciliation and cash count templates, added to refinement of internal control.
Strategic Growth: Starting with the vision, mission and strategic direction of the institution, we worked with ENCOT to improve and grow in the direction of its strategic intent. This is our common approach with all MFIs.
In the context of FCL’s journey
Through such engagements, FCL has built a legacy, since 1997, of transforming MFIs into resilient entities. When the MDI Act was passed, we helped mature MFIs to transform into MDIs. When SACCOs wanted to adopt better governance, management or operations, we helped them to. When Government wanted projects to operationalize its rural finance strategies, we participated in designing projects like PROFIRA and when Government wanted technical assistance to improve rural financial institutions, we did a fine job of capacity building 180 of them. We are dedicated to doing more now and in the future.
Written by Dr. Keren Obara.
Digital Marketing Associate.
[1] Uganda Microfinance Regulatory Authority (Now department of Microfinance Regulation)