Community-managed mcro-minance and tackling extreme poverty in Uganda

Oribcing Women's Savings and Credit Society Limited is rural community based, members owned and demand driven Micro-Finance Institution with Head Quarters in Lira municipality serving the districts of Lira, Apac, Amolatar and Oyam district. It was founded Village Savings and Credit Institution (VSCI) in 1999 promoted by Mid-North Private Sector Development Company Limited on the concept of village banking model to provide financial services to active poor members. The study tries to determine the impact of Micro-finance loans on poverty eradication to rural poor community in Uganda. It focuses on access, utilization and pay-back mode of the loan. The loan was found to be easily accessible because it is based on 25% savings; it's great in expanding businesses and improving living standards of poor people. However, interest rate seems unfavorable and some members would direct the loans not for the right purpose for which they have acquired. The study recommended more training for the borrowers and Credit officers and monitoring utilizing funds and performance of business. The government should put a limit on interest rate policy beyond which all registered MFIs should not exceed.