June 18, 2024

Redefining Uganda’s microfinance sector

2 min read

Unifi, a pioneer in Africa’s personal lending landscape, recently opened its 10th branch in Uganda and has, over two years in the country, made significant strides in its burgeoning financial sector.

The lending group, which was founded in Zambia in 2013 and also operates in South Africa and Kenya, has distinguished itself through its groundbreaking approach to lending.

In a crowded market of microlenders, Unifi is transforming traditional microfinance models, and setting new benchmarks for innovation and trust in the industry. With a dedication to both technology and a personal, human touch, the company has been adept at navigating Uganda’s economic landscape.

Unifi Uganda opened for business in 2021, while the country was still under a particularly stringent COVID-19 lockdown, and has over the past two years confronted both legislative hurdles and operational challenges including infrastructure limitations and a lack of readily available data.

While not the sole force behind recent legislative changes, Unifi has helped champion recent progressive revisions to finance regulations in the country, including updates concerning Tier 4 microfinance institutions in Uganda. These changes are seen as vital steps toward a more inclusive financial ecosystem in the country.

CEO Michiel Le Roux says the Ugandan market, while less competitive than its counterparts in the likes of Kenya and South Africa, presents its own set of hurdles such as mitigating reputational risks in a sector beleaguered by public distrust.

To address these challenges, Unifi offers Ugandans an easier alternative to the payroll- and collateral-based loans they are accustomed to: unsecured credit for clients with a regular income and a bank account, available in as little as 20 minutes. Repayments are done directly by the clients in cash or via mobile money. These innovative unsecured loans eliminate the need for a guarantor or collateral, thus reducing the risk for borrowers and making life easier for everyone, and have been well-received by Ugandans seeking a measure of liquidity.

A Unifi client only has to visit a branch once, to have their identity verified and fingerprints captured for Unifi’s security, and can thereafter fully transact on the Uniapp (a USSD-based app), if they choose. 

Le Roux articulates that mobile money has been a game-changer in the sector, and a key enabler behind Unifi’s promise of more favourable terms and swifter turnaround times than traditional banks. Utilising sophisticated data architecture that allows for unprecedented agility and real-time monitoring of trends, Unifi is well-poised to adapt and thrive in Uganda’s dynamic, mobile-enabled financial environment where existing data infrastructure is lacking. 

The future looks brighter than ever for Unifi in Uganda and beyond. “Africa is the place to be,” says Le Roux, recognising the continent’s abundant potential and foreseeing a prosperous economic future.

Unifi’s outstanding performance and steadfast commitment to genuine impact and innovation are ushering in a new era in which clients across Africa can easily and quickly access highly affordable, simple personal credit.

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