The Microfinance Regulatory Authority-UMRA has asked financial institutions to provide fast and unsecured loans to individuals affected by the Covid-19 lockdown.
The outbreak of the pandemic and the ensuing lockdown of movement and operations led to a drop in both the demand and supply of goods and services. In turn, this has negatively affected the revenues of businesses and individuals and their ability to service their loans.
Rachel Vanesa N. Muhwezi the Manager Microfinance Institutions, Uganda Microfinance Regulatory Authority says that several businesses were hit hard by the lockdown caused by the pandemic and are yet to recover.
Muhwezi was speaking at the launch of UNIFI, a new South African microfinance company.
She says that small lenders play a big role in bringing numerous benefits and access to business opportunities and services especially instant loans without security.
Unifi currently operates in South Africa, Zambia and Tanzania. So far there are 950 institutions giving loans to Ugandans. The institution has introduced instant and online unsecured loans to the Ugandan market to support individuals affected by COVID-19.
The unsecured loans focus on salaried employed in both Government and private sector and the key aims are to rid the rigorous process of the loan application.
The facility has unveiled its online loan access platform where clients complete the loan application process online and these are for emergencies like sudden illness and when an appliance or vehicle breaks down and needs to be fixed at a cost.
Michael Boden, the Country Manager Unifi, says that they intend to have a fast, and easy application online and physically in as quick as 20 minutes and flexible repayment with an affordable interest rate of 16 per cent for first-time borrowers and as low as 8 per cent for clients with good credit history per year.
He says they hope to change the future of credit in Uganda, by cutting down on the long process and queues associated with getting loans.
The loan facility is intended to help Ugandans struggling during the COVID-19 access credit, but also for workers to get advances and complete businesses.
Several Ugandans have been affected by the COVID-19 lockdown measures and have relied on support from microfinance institutions and banks among others to rescue their business.
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