Semi-Formal Finance in Uganda: The Use of Non-Bank Financial Institution

The study focused on the use of financial markets by male and female entrepreneurs of small-scale enterprises. Business women and men who had received or applied for loans from non-bank financial institutions were interviewed. The non-bank financial institutions surveyed were the Uganda Cooperative Savings and Credit Union (UCSCU) and the Uganda Women’s Finance and Credit Trust (UWFCT). Respondents provided information on the financial services they used in the formal, semi-formal, and informal financial markets. They were also asked their perceptions on the delivery, accessibility, and use of financial services. Both gender groups indicated increased accessibility to credit as the main advantage of the semi-formal financial market. Most respondents only obtained loans from either UCSCU or UWFCT. Both UCSCU and UWFCT had flexible collateral requirements typical of semi-formal financial institutions. In addition to having savings accounts with UCSCU and UWFCT, most respondents had similar accounts in other banks. Few respondents kept savings with friends, relatives, or were members of an informal savings group. Women were more likely than men to have used informal markets to deposit savings or to borrow money. Gender differences in attitudes towards financial markets were insignificant and sometimes contrary to what is expected in the literature. Most women reported decision-making in financial matters. On the other hand, men were more likely to make joint decisions with spouses.