The Government of Uganda in its continued efforts to reduce poverty identified the lack access to financial services to rural/ poor people as a key constraint in the fight against poverty. The provision of suitable financial services to the low income and rural people thus features in the Poverty Eradication Action Plan (PEAP), the government planning framework. Government therefore sought to develop a mechanism through which the capacity of the existing micro-finance institutions would be developed to increase their rural outreach.
FCL was contracted by Government of Uganda in February 2004 to design the Matching grant facility for Capacity Building (MCAP). The fund aimed at supporting micro-finance institutions to access quality capacity building services to help them to broaden and deepen outreach.
FCL, after extensive interviews, market research and document review, designed the Fund focusing on three major areas of activity that directly responded to the core needs of capacity building for micro-finance institutions. The three areas are;
- Expanding remote rural outreach
- Technical assistance to achieve greater stability, efficiency and sustainability
- Product development and innovation with a preference for rural suitability.
The Fund design was highly appreciated by Government and its development partners, who all rated it “excellent” when FCL presented to them the design in a workshop.