The design of micro credit contracts and micro enterprise access to finance in Uganda / Winifred Tarinyeba Kiryabwire.

"September 2010."

Includes bibliographical references (pages 155-166) and index.

Print version record.

Studies have shown that the negative effects of credit market inefficiencies are most felt by smaller firms. Therefore, in countries such as Uganda, where micro enterprises are at the bottom of the economic pyramid, moral hazard and adverse selection severely affect their ability to access formal credit hence limiting their growth potential. Microfinance has been heralded for its use of innovative lending methods to improve access to credit. The last decade has witnessed an unprecedented increase in the outreach of micro lending institutions and the development of financial products suited to the needs of the economically active poor, who often, are unable to obtain credit from mainstream financial institutions. This book analyzes the law and economics theories on access to credit and enterprise finance and based on case studies in Uganda, presents empirical findings of the promise and limits of contractual innovations in micro credit.

Cover; Title page; Copyright page; Contents; PREFACE; DEDICATION; ACKNOWLEDGMENTS; LIST OF TABLES; LIST OF FIGURES; LIST OF ABBREVIATIONS; CHAPTER ONE; 1.0 ACCESS TO MICRO CREDIT IN UGANDA.; 1.1 INTRODUCTION; 1.2 RESEARCH PROBLEM AND RESEARCH QUESTIONS; 1.2.1 Research Questions; 1.3 MOTIVATION FOR THE STUDY; 1.4 RESEARCH METHODOLOGY; 1.4.1 Empirical Work; 1.5 THE RESEARCH POPULATION; 1.5.1 Micro Credit Institutions; 1.5.2 Micro Enterprises; 1.6 SELECTION CRITERIA; 1.6.1 Micro Credit Institutions; 1.6.2 Micro Enterprises; 1.6.3 Case Studies; 1.7 LIMITATIONS; 1.8 DATA ANALYSIS; CHAPTER TWO.

2.0 CREDIT, FINANCIAL DEVELOPMENT, AND ECONOMIC GROWTH:CONTEXTUALIZING THE THEORIES 2.1 FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH: IS THERE A NEXUS?; 2.2 MISSING CREDIT MARKETS IN LOW INCOME COUNTRIES AND THE IMPLICATIONS FOR THE FINANCE-GROWTH TRAJECTORY; 2.2.1 The Preconditions for Efficient Credit Markets: Creditor Protection; 2.2.2 The Importance of Functional and Efficient Contract Enforcement Institutions; 2.3 CREDIT MARKETS IN LOW INCOME COUNTRIES; 2.3.1 Enterprise Finance in Africa: Demand for and Access to Credit; 2.3.2 Contracting Practices of Firms in Africa.

2.4 "INNOVATIVE LENDING" AND THE ROLE OF MICRO CREDIT IN BRIDGING THE ACCESS GAP Conclusion; CHAPTER THREE; 3.0 CREDIT MARKETS IN UGANDA; 3.1 A PROFILE OF THE FINANCIAL SECTOR IN UGANDA: DUALISMIN THE FINANCIAL MARKET; 3.2 COMMERCIAL BANKS AND MICRO ENTERPRISE ACCESS TO CREDIT; 3.2.1 Stanbic Bank (U) Ltd -- "Inspired, Motivated, Involved"; 3.2.2 Centenary Bank -- "Our Bank ... "; 3.3 CREDIT INSTITUTIONS AND MICRO ENTERPRISE ACCESS TO CREDIT; 3.3.1 Commercial Microfi nance (U) Ltd -- "Secure Savings, Easy Loans"; 3.4 MICRO FINANCE DEPOSIT TAKING INSTITUTIONS AND MICRO ENTERPRISE ACCESS TO CREDIT.

3.4.1 PRIDE (Microfinance Deposit-Taking Institution) Ltd-"Your Growth is our Pride"3.4.2 FINCA (U) Ltd (MDI) -- "Small Loans Big Changes"; 3.5 MICROFINANCE INSTITUTIONS (NON-DEPOSIT TAKING) AND MICRO ENTERPRISES ACCESS TO CREDIT; 3.5.1 FAULU (U) Ltd -- Non-Deposit Taking Microfinance Institution; 3.5.2 Success Microfinance Services Ltd -- Non-Deposit Taking Microfinance Institution Serving Clientele of a Related Entity; 3.5.3 Uganda Gatsby Microfinance Ltd -- a Member Organization Microfinance Institution; 3.5.4 Masaka Microfinance Development Co-operative -HYBRIDMFI/SACCO.

3.5.5 Panyimur Savings and Credit Cooperative-SACCO 3.5.6 Kakuuto Small Business Development Cooperative Savings and Credit Society -- Rural- Based SACCO; 3.5.7 Naguru Savings and Credit Cooperative -- Urban Based SACCO; 3.6 INFORMAL FINANCIAL INSTITUTIONS; 3.7 FACTORS CONTRIBUTING TO THE COSTS OF PROVIDING CREDIT; 3.7.1 Lack of creditor information; 3.7.2 Problems with property registration and verification of ownership; 3.7.3 A Weak Environment for Contract Enforcement; 3.7.4 Lack of Regulation; 3.7.5 Nature of Business Enterprises; CHAPTER FOUR.

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