Microfinance institutions tipped on averting defaulters

Kampala – Microfinance institutions have been advised to always conduct a deep analysis and understanding of their clients before they issue them with loans to avoid defaulters.

According to Ezra Barihamwe an official from Uganda Microfinance Regulatory Authority, the biggest challenge that the financial institutions are facing today is the over-indebtedness of their clients.

He says due to the absence of a Credit Reference Bureau (CRB) for Tier IV microfinance institutions in Uganda, many people tend to take multiple loans from them and end up defaulting.

Barihamwe says the institutions always need to first ascertain whether a particular individual applying for a loan qualifies for it by looking at their cash flows rather than relying on the collateral.

“…defaulters don’t default at the point of paying a loan but from the point of taking it, so you must sieve these clients very well so that you understand them better before you give out the loans,” Barihamwe said on Wednesday evening while representing the Director Supervision, Uganda Microfinance Regulatory Authority at the grand opening of a new branch for Goldmine Finance Limited in Ntinda.

Goldmine Finance Managing Director and founder Allan Tayebwa said the new branch will be offering a wide range of financial services including personal loans, business loans and mobile loans.

“We are excited to expand our presence to Ntinda and provide our customers and the general public with greater accessibility to our financial products and services,” said Tayebwa.

He added, “Our new branch reflects our commitment to delivering innovative financial solutions and personalized services to meet the evolving needs of our customers.”

While officiating at the function, the state minister for foreign affairs Henry Okello Oryem urged Ugandans to be innovative and start up their own projects that can generate them income.

“What is important in life is identifying an idea which you can transform to become a successful project for your life and also for others. This young man Allan here when he finished university his idea was to start a financial institution, as basic as it was, it started in a very simple form from just 2 million shillings. That small institution that he started when he had his dream which he put into action has today become a billion shillings institution. So what I’m encouraging young people is that there are a lot of opportunities outside just seeking jobs,” said Minister Oryem.

About Goldmine Finance

Goldmine Finance is a Tier IV Microfinance Institution that started in 2011 as a money lending institution. It provides innovative financial solutions and exceptional customer service to individuals, businesses, and communities. Now with two branches and 25 employees, they offer a wide range of financial products and services, including personal and business loans, mobile banking mortgages, and agency banking.

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