BRAC, the world’s largest development organisation, is transforming its microfinance operation in Uganda into BRAC Uganda Bank.
With 163 branches and 1,800 employees, BRAC Uganda provides loans to more than 200,000 customers. Its current customers are primarily women from poorer sections of the population in rural areas.
As a result, current average loans are modest, only about $335 and mostly granted as group loans.
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BRAC Uganda Bank aims to provide far wider financial access and support to customers particularly in rural communities.
In Uganda, only about one third of the population currently has a bank account. The launch of BRAC Uganda Bank aims to increase that figure significantly.
The new bank will offer savings and deposits products. Future product plans include micro-insurance, financing for small and medium-sized enterprises and digital banking services as mobile payment.
The NGO BRAC has diluted its 100% shareholding in BRAC Uganda Bank to meet regulatory requirements.
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By GlobalDataThree equity partners – DEG, Equator Capital Partners, and Triple Jump – have each acquired 17% stakes in the bank.
“Becoming a bank is not the end in itself, but a means to an end. We are now in a stronger position to provide far greater value to the clients that we already serve. And to achieve greater financial inclusion in Uganda. We will serve hundreds of thousands more who are outside of the formal financial system,” says Shameran Abed, the Senior Director of BRAC’s Microfinance and Ultra-Poor Graduation programme.
Uganda banks’ digital drive
Incumbent banks in Uganda include Stanbic, Centenary and Standard Chartered.
All three are accelerating their efforts to digitise and innovate the market. Centenary serves more than 1.4 million customers via a network of around 60 branches and 172 ATMs.
Stanbic is the largest bank in Uganda by assets. It currently operates 69 branches and 173 ATMs.
Standard Chartered Uganda is the oldest commercial bank in the country. Its branch network comprises 9 outlets at 29 ATMs. And last June Standard Chartered teamed up with mobile money provider MTN Uganda. As a result of the partnership, the bank launched the Straight2Bank Wallet.
