1. business and industrial

www.pwc.nl
SYPO Uganda Ltd.
Business plan
Accessible microfinance
in rural Uganda
Secondary
copy
Version 1.0
07 January
2013
Table of contents
Executive Summary
3
1.
From our Vision to Objectives
5
2.
The people we will help to become independent
7
3.
The product we provide
9
4.
The way in which we deliver our product
11
5.
Fundraising – www.microbankieren.nl
19
6.
Who we are
21
7.
A sound financial plan to realize our vision
24
A.
Appendix Overview Uganda
30
B.
Appendix Strategy map
32
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Executive Summary
SYPO Uganda Ltd. is the Ugandan microfinance company of the Dutch NGO Stichting SYPO. The impact of our
microcredits is immense: women get the chance to start or expand their own business to increase the income of
their households significantly. Through professional, innovative and low-cost operations in a network of small
field offices, we can serve women in rural areas where essential financial services were previously not available.
Today, the company has issued over 800 loans to women in the Mukono and Buikwe districts, at a repayment
rate of 99.9%. We will continue to carefully track economic and social impact of the project in the coming years,
to ensure that we keep learning and continue to maximize the beneficial effects of the project.
The microfinance sector has shown (market data from www.cgap.com; www.kiva.org; www.mixmarket.org)
that a portfolio of at least 3,000 loans is necessary for a microfinance company to reach sustainable levels. To
grow to a solid portfolio of 3,000 microcredits, another € 400,000 is needed on top of the € 100,000 already
invested in the initial year of this project. A large part of that amount will be collected as donations, through the
innovative website www.microbankieren.nl, on which sponsors can donate money for individual business plans,
and can track the progress of their portfolio. Of the total requirement of € 400,000 in donations, € 250,000
will be attracted through www.microbankieren.nl (from both private individuals and companies), and
€150,000 will be drawn from institutional donors. On top of its donation requirements, SYPO has attracted
€125,000 in debt (at 0-2% interest), provided by a small group of individuals that are sympathetic to SYPO and
its goals. The loans, each of € 25,000, will be repaid at the end of the project period of three years. The objective
of this debt is to maintain the current growth momentum and create predictable funding.
SYPO Uganda Ltd. has over 9 years of experience with economic projects in the Mukono and Buikwe districts
and over 2.5 years of experience with microfinance. SYPO started working with microfinance in 2009, through
the support of a local NGO in the setup of a microfinance programme. The partner organization has successfully
given out several hundreds of loans, and still maintains a portfolio of 100 loans. This first project was
completed (i.e. continued independently) in 2011, upon which SYPO decided to start its own microfinance
company in Uganda. Because of its success in microfinance, SYPO will continue to grow, improving more lives
in Central Uganda. It is SYPO’s objective to:
“Grow the microfinance company SYPO Uganda Ltd. to a portfolio of 3000 loans by the end of 2015.’’
Uganda today is the 27th poorest country in the world with approximately 80% of the people earning less than
$2.50 per day. However, with 7% annual economic growth until 2020 predicted by the IMF, and relative
political stability for over 25 years, there is a strong base for substantial improvements in the near future. Rural
areas do however not always benefit from this nationwide economic growth, because basic financial services are
often not available in these more remote parts of the country. SYPO believes that by providing microcredits, the
people of the Mukono and Buikwe districts will have the possibility to improve their lives and leverage the
growth possibilities currently available in Uganda.
SYPO Uganda Ltd. focuses on groups of women in the Mukono and Buikwe districts in Uganda. Most women in
rural Uganda – no matter how poor – have a plan to start or expand a simple business. The capital
requirements of the women relatively small (on average ~€150,-), and the women are not registered or offer any
collateral. It is for these reasons that conventional banks have chosen no to serve this segment. Microfinance
around the world however has shown that, in spite of the complications associated with providing microloans to
unregistered women, one can achieve cost-covering interest percentages and repayment rates by offering the
right product and by maintaining solid operations.
To provide our clients with low-threshold, transparently low cost loans, SYPO Uganda Ltd. will have:
A. The right product – loans that are catered for the needs and growth of poor rural women
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B. Lean operations – a professional flat organization with zero waste, supported by innovative IT
solutions
C. The right people – great recruiting and HR processes to attract and maintain strong and
independent loan officers
D. Repayment discipline – by having regular interaction with all clients, and diligent screening
processes for all loans
E. Solid management and transparent reporting – adhering to international standards, and
keeping full visibility on operational and financial key performance indicators
F. Learning based growth – close contact with the clients and social impact measurement to ensure
continuous improvement and optimal products to achieve poverty reduction
The objective of this business plan is to inform investors and sponsors of SYPO Uganda Ltd.’s growth ambitions
in the period 2013-2015. By providing full transparency and insight into implications of business plan, we
intend to raise €400,000 in donations and inform the people and institutions that collectively lent SYPO
Uganda Ltd. €125,000. Investors and sponsors can choose several tangible ways of supporting our
microfinance efforts:
1.
Donate any amount of your choice to the Dutch NGO SYPO, which will then use it to give out loans in Uganda;
2.
Donate €200 for one microcredit, and support an individual woman to set up or expand her business;
3.
Donate €1000 for a group of women, each with individual business plans and responsible for each other’s
repayments;
4.
Donate €25.000 for a ‘mobile centre’, a small village in which our loan officers meet clients weekly to extend and
collect loans, usually in a very remote rural village. With this donation we can give out 125 loans;
5.
Donate €65.000 for a full zone – a village plus mobile centre, under the responsibility of one loan officer working
from a simple field office in the middle of the zone. With this donation we can extend 325 loans.
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1.
From our Vision to Objectives
Vision
We believe that access to microfinance services such as business loans will improve the economic resilience,
independence and freedom of choice of Ugandan women and their households.
Mission
To realize our vision we founded the organization SYPO Uganda Ltd., a 100% subsidiary of Stichting SYPO in
the Netherlands that started operations in the summer of 2011. SYPO Uganda Ltd. provides structural aid in
Uganda by initiating and supporting projects with a sustainable, entrepreneurial character. In the nine years
that SYPO has operated economic projects in Central Uganda, microfinance has proven to be an effective
approach for poverty elevation – and one that matches the expertise of SYPO’s volunteers. It is therefore our
mission to:
“Contribute to economic resilience, independence and the freedom of choice of households in the Mukono and
Buikwe districts in Uganda through the provision of small and fair loans to poor, female entrepreneurs that
do not have access to conventional financing.”
Objectives
To realize our vision and mission, we have formulated a long-term strategic objective for SYPO Uganda Ltd.
stated as following:
“To build, before the end of 2015, a portfolio of 3000 small and fair loans to poor, female entrepreneurs that
do not have access to normal financing in the Mukono and Buikwe districts.”
This short-term objective is accompanied and enforced by the following growth targets for 2015:
•
Proven impact (household income, client well-being, employment, and schooling);
•
Cost-covering of its operations;
•
Great employment possibilities for loan officers;
•
Strong local management;
•
Increased microfinance awareness in NL.
This document constitutes the business plan of SYPO Uganda Ltd. for the years 2013-2015, written with the
guidance of PricewaterhouseCoopers Advisory. It describes in detail how the short-term objectives of 2015 and
how the long-term objective are attained, ultimately realizing our mission and vision for the Mukono and
Buikwe districts in Uganda.
The document starts by describing the target population, in Chapter 2. Chapter 3 describes with what value
proposition (product and services) SYPO wants to help them. In Chapter 4 a description is given of the way
SYPO will deliver the value proposition to the target group. Chapter 5 provides an overview of the people
working in Stichting SYPO and SYPO Uganda Ltd. Chapter 6 is an overview of the financial business model.
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2.
The people we will help to become independent
Poverty – Uganda today is the 27th poorest country in the world with approximately 80% of the people earning
less than $2.50 per day (CIA world fact book). However, with a 7% annual economic growth until 2020 and
relative political stability for over 25 years, there is a good base for economic development (IMF). The Mukono
and Buikwe districts are located East of the capital Kampala, towards Kenya. The economic activity in the
districts is primarily agricultural, including fishery in the bordering Lake Victoria. Investments in basic
infrastructure have risen in the past few years. The agricultural potential, proximity to Kampala and Kenya, and
general economic growth of the country create a sustained opportunity for strong growth in the next ten years.
SYPU Uganda Ltd. extends loans to the poorest of the poor in rural areas of the Mukono and Buikwe districts in
Central Uganda. To avoid a gradual move towards more affluent clients, SYPO will use the Grameen Bank’s
‘Progress out of Poverty Index’ (PPI) to assess each client’s poverty level. In each zone, the average PPI of first
loan clients will not be higher than 50, translating to an 83.7% chance of being below the $2.50 per day poverty
line (2005 purchasing power parity). The PPI include questions about family composition, education levels,
home construction materials, personal possessions, etc, and is with 10 questions not time consuming to
administer. The PPI and other ‘well-being indices’ are also used to assess impact of the loans over time on the
clients’ poverty and well-being levels.
Women – SYPO Uganda Ltd. focuses on groups of women in the Mukono and Buikwe districts in Uganda. The
prime reasons for SYPO to focus its lending activities on women are that microfinance literature shows that
women around the world repay at higher percentages than men (see for more background to this phenomenon
www.cgap.com) and that women are more inclined to invest the profits from their businesses in ways that
benefit the entire family. By providing loans SYPO enables women to start their own (small) businesses or to
expand their already existing businesses. SYPO does not provide such loans as mortgages, consumer loans,
school fee loans, etc. Surveys, literature and SYPO’s experience have shown that most women in Uganda do
engage in some sort of entrepreneurial activity, and can define plans for expansion of existing activities or the
start of new businesses.
There is an enormous demand for microcredit with women in the Mukono and Buikwe districts. The
operational zones today have hundreds of applications waiting, and surveys of zones to be opened have shown
similar demand in the future.
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The map shown above includes currently operational zones (Namaiba zone (ZO) with mobile (satellite) centre
(MC) Nakisunga, and Kisoga with mobile centres Naluwala and Kyandaaza), and future zones Ntenjeru, Katosi,
Kasubi, Lugasa and Ngogwe and their mobile centres. The current zones have ~800 loans in portfolio, and
market research and pending applications suggest a further potential of ~1,200 clients. Market research in the
future zones have shown a potential of ~1,000 clients per zone. This means that there is sufficient potential to
sustain a portfolio of 3,000 clients.
Access to financing – SYPO’s target group (poor women in rural areas) has limited access to conventional
bank financing. Most have no formal registration status (e.g., ID cards), collateral (e.g., land titles), or credit
history, and the costs of transport and distance to the nearest bank branch can be prohibitive. Alternative
financing does exist, but is expensive and limited to small amounts. Examples of alternative financing are local
moneylenders (surveyed interest percentages >500%pa), wholesaler credit (surveyed interest percentages
>500%), and “saving circles” of typically ~10 people who save together and take turns in getting money from
the saved amount to invest (surveyed examples showed that the amounts are small, and the unpredictable
timing makes this form of saving unsuitable for business investments).
Example business plans and returns – The clients that SYPO serves are active in a wide range of very
distinct businesses. Examples drawn from our first year of operations show that some manufacture bricks,
others sell chickens or eggs, dig wells to sell drinking water, run hair salons, set up small food shops, start tree
plantations, buy solar panels to recharge mobile phones as a commercial service, open up small restaurants,
invest in a sewing machine, buy coffee to resell in the city, and so on. Interviews with clients in our portfolio
have indicated that the return on invested capital (ROIC) of the client businesses is typically between 100-400%
for a first cycle loan; not taking into account the client’s time invested in the business.
Summary profile of SYPO’s clients in the period August 2011 to October 2012 (based on client administration
data and interviews):
Women (100% of clients)
Rural (100%)
With child (95%)
Average age 30-35 years
Often illiterate (~50%)
Married (~80%)
Under $2.50 per day poverty line (80%)
Relatively far from nearest bank branch (average 25km, 1hr)
No significant collateral (e.g. land title) (~90%)
No formal registration (e.g. passport, ID, birth certificate) (~60%)
Small business inventory (average ~200 Euros)
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3.
The product we provide
SYPO Uganda Ltd. provides loans to groups of women in the Mukono and Buikwe districts in Uganda. The
women borrow in groups of five, each person with her own business plan and responsible for each other's
repayments. The loans have a one year period of validity and are paid back weekly – which ensures a regular
repayment rhythm and facilitates on-going contact between SYPO and the client groups. SYPO does not require
any physical collateral from its clients, which makes its loans accessible to even the poorest of women. This
value proposition is tailored after the Grameen Bank model as developed in the 1980s.
To optimize the positive social impact, SYPO has tailored the loan product and operations to the clients’
average profile and needs:
•
Providing a low cost product
SYPO provides a low cost product to its clients by keeping the interest rates substantially below Uganda's
MFI sector average. SYPO strives to keep its interest rate within the window of 35% and inflation + 25% on
declining balance per annum.
Interest percentages in microfinance are generally high. It is much more expensive to give out and collect
thousands of small loans than it is to have a portfolio of only several large loans, and the transaction costs
are further increased by the challenging local conditions – high inflation, transport costs, and other costs
associated with the weekly interaction with every client deep down in every village.
The company will charge an interest percentage that is as low as possible, while covering all costs of the
company (e.g. OpEx, inflation, reserves, financing costs). Growth of the company (majority of loan portfolio
growth and major CapEx investments) will not be funded directly with interest collected from the clients.
Our experience, calculations (see business model attached) and examples from other ‘lean’ microfinance
institutions in and outside Uganda have shown that an interest percentage of 35% is sufficient to cover costs
of the company, including financing costs and risk. However, 35% assumes a long-term inflation rate lower
than 10%. If inflation is structurally higher than 10%, interest rates need to be adjusted accordingly in order
to meet growing average loan sizes and increases in variable costs (e.g. employee remuneration and office
rent). The company will therefore apply a 35% interest rate, or if necessary inflation plus 25%.
Market research and information from the branch organization AMFIU (Association of Micro Finance
Institutions in Uganda) have shown that the real interest percentage (annualized costs of loan as percentage
of average loan amount held throughout the year) at different commercially viable microfinance institutions
in Uganda is in the range of 30-200%, with an average of 65%. International examples show a similar
distribution (e.g. Grameen bank ~20%, Compartamos (Mexico) >125%).
•
Providing loans that are suitable for our clients
Some of the poorest clients have very small businesses with relatively small capital demand. In order not to
exclude those clients, SYPU Uganda Ltd. will not have a minimum loan size and will tailor each loan size to
the business needs of the client. The experience from 2011 is that the average loan size is ~150 Euros,
ranging from 50 Euros to 200 Euros.
The clients’ businesses vary widely, both in content and in timing of returns. Some clients operate
businesses with cycles of less than 3 months, while other agricultural loans can take up to one year to
generate full returns. To accommodate both types of businesses, the company will not have a minimum
repayment period or penalties for early repayment. Experience in 2011-2012 has shown that ~25% of clients
choose to repay significantly (>2 months) faster than in the maximum 1 year period.
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•
Providing transparency and a good customer experience
It is a widespread problem in microfinance that clients in many cases do not know what the costs of their
loan are. Microfinance institutions calculate interest in different ways (e.g. per day, week, month or year,
flat or reclining, etc), and charge fees on top of interest percentages (insurance, loan officer transportation,
administration). This lack of cost transparency is a core cause of failing market forces, in which interest
percentages are not driven down by increased competition. SYPO Uganda Ltd. charges a transparently
calculated annualized declining balance interest percentage (interest only over loan amount held at any
point in time), does not charge fees on top of the interest percentage, and is explicit in communicating the
total costs of the loan to the clients repeatedly, both before and during the loan cycle. The total costs of the
loan are explained during the intake with the client, outlined in the contract presented to the client and
provided again in account statements given periodically during the loan cycle. The client pays interest over
the outstanding loan amount only, meaning that a client pays less interest should she choose to repay faster
than the maximum period of one year.
In order to keep the time burden of repayments to a minimum, the loan officers of the company will move
to the clients and make sure a client never has to walk more than 15 minutes to a repayment centre. To
achieve this deep rural penetration, the company is decentralized in ‘zones’; each loan officer is responsible
for one zone and operates a simple field office in that zone. For clients that live outside the 15 min radius of
the field offices the loan officer visits ‘satellite’ repayment centres, which can be as simple as a bench under
a tree. Satellite repayment centres will only be opened if sufficient client can be found in a 15 min walking
radius around the centre. Loan officers will not accept clients that live outside of the radius of either the
office or a repayment centre.
Realizing that a client can be in immediate need of capital, we adhere to a maximum of three weeks
between application intake and loan disbursal.
The loan officers and field offices are all low-threshold and non-threatening in their appearance and
demeanour. The offices are simple and look like local shops, and in their personal interaction with the
clients the loan officers ensure an equal setting.
•
Stimulating cooperative behavior between group members
Loans are given out to groups of five women, responsible for each other’s repayments. The formation of the
groups is voluntary, and is the first line of selection of creditworthy clients. After initial selection, the group
process can exercise peer pressure on clients in danger of default, or practical support and knowledgesharing when a business is in jeopardy. To make full use of these mechanisms (selection, practical support,
knowledge sharing and peer pressure), SYPO will stimulate the group dynamics in two ways: 1) the clients
are required to make payments as a group, physically present each week, 2) clients are encouraged to share
knowledge and practical support during business-specific (e.g. poultry, trade, etc) workshop sessions.
•
Contributing to financial education
Financial education of the clients is beneficial for three reasons: 1) it will improve transparency by ensuring
that clients fully understand the conditions and consequences of the product, 2) it will improve the client’s
compliance to the company rules and avoid defaults, and 3) it will contribute to the efficacy of the loans by
improving the performance of the client’s business. The company will therefore provide a short training in
general bookkeeping and the company rules before disbursement of the loans, and facilitate financial
literacy follow-up trainings by third-party trainers where needed.
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4.
The way in which we deliver our product
The previous chapter describes the loan product that SYPO has tailored to the needs of the poorest of the poor
in rural Uganda. To achieve sustainable social impact, the delivery of the product is just as important as the
product itself. SYPO Uganda Ltd.’s operations need to be low-cost, accessible to the client, and financially
sustainable. This chapter is to outline the innovative and diligent ways in which SYPO achieves these
operations.
Ad B. Lean operations in place to support the value proposition delivery
Different specific activities and processes are in place to make sure that the value proposition is delivered to our
clients and that the loans are provided to the right people in the correct fashion:
•
Simple and fast application procedures
One of the benefits of microfinance is that it provides poor people with a means of insurance against strong
income fluctuations. This insurance works best when a loan can be made available within a limited time
span. For this reason, SYPO Uganda Ltd. aims to have a short and fast application procedure:
•
•
•
The organisation aims to minimise the waiting period between loan application and loan
disbursement to a maximum of three weeks.
In order to make sure that the loan product remains accessible for the organisation’s target group,
the application process is kept relatively simple: loan officers visit each of the prospective clients,
and with them fill out an application form that includes elements of a business plan, such as the
intended investments, calculations of the profits, and background of the clients.
Be mobile and provide offices at the right place
Loan officers all operate within their own geographical zone. Before a new zone is started a market and area
mapping is completed to ensure that there is a large enough target group within the prospective zone, and
to identify optimal locations for all collection centres. Zone offices will be positioned in the zone’s largest
trading centre with the minimum requirements that there are at least 300 potential clients (women
between 18 and 60 years old who engage in any form of business activity) within a 15 minute walk from the
office, and that there are at least 3 repayment centres with at least 200 potential clients within 15 minute
walking distance each within 20 minutes travel for the loan officer.
SYPO Uganda Ltd. currently has three operational zones, combine in one ‘region’. There are two
operational zones in Kisoga (with mobile centres in Naluwala, Banda Kuandaaza, and Kirondo), and one in
Namaiba (with mobile centre in Nakisunga). SYPO has conducted market surveys in other villages, and will
grow to the following zones in the coming three years: Ntenjeru will be added to the currently operational
region (and will include mobile centre Buzungula and Nsanja), the other region will consist of zones
Ngogwe, Lugasa and Kasubi (with mobile centres Nanunga and Matale). Surveys and potential client
interviews have shown that together, these seven zones have the potential to sustain over 5,000 clients.
There is no access to conventional finance (banks) or well-functioning microfinance/moneylenders in any
of these zones.
•
Minimize operational costs and overhead
In order to be able to provide our clients with a low-cost product,
SYPO Uganda Ltd. aims to keep operational and overhead costs to an
absolute minimum. Field offices are kept extremely basic and their
initial set-up costs should not exceed 1500 Euro (corrected for
inflation). Operational costs (including depreciation) for all zone
offices should be kept below 125 Euro per month (inflation corrected).
SYPO Uganda Ltd. will aim to minimise local management staff and
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the organisation will be kept as lean as possible. Transport will continue to be outsourced. Management
will be kept minimized by leveraging Dutch volunteer Directors and other support staff, and by distributing
support functions over the loan officers.
•
Consistently good execution of loan officer protocols
SYPO Uganda Ltd. has financial and operational protocols in place for client recruiting, loan disbursement,
repayment collections, security, and financial reporting. All newly recruited loan officers receive a onemonth training period before they start operating their own zones, focusing on this protocol.
•
Using IT to ensure controlled operations
SYPO Uganda Ltd. has remote management in the Netherlands, and even in Uganda the field offices are
spaced some 30 minutes apart. Communication is a constant challenge, and the monitoring of the >40,000
cash transactions a year is not an easy task. SYPO Uganda Ltd. therefore sees an advanced IT environment
as crucial to achieving its qualitative and quantitative goals. Its IT environment should facilitate:
•
•
•
•
•
•
•
Constant communication amongst loan officers and between loan officers and Directors;
Visibility of all client administration, loan applications and financial transactions to the company’s
management/Directors
Reliable and transparent bookkeeping and reporting
Transparent and reliable loan appraisal with separation of loan submission by the loan officers and
approval by the Directors
Sponsoring of individual loans
Reliable tracking of Key Performance Indicators (KPIs) regarding portfolio heath both per loan
officer and on a consolidated level
Maximum transparency to stakeholders of KPIs / portfolio health and financials
SYPO Uganda Ltd. uses SYMBA, a tailored and proprietary Oracle database in which all client
administrations, loans and repayments are registered, analysed and reported, and through which loans can
be submitted and appraised. SYMBA reports KPIs and facilitates bookkeeping by keeping track of all
transactions in the company. SYMBA was written by volunteer Oracle developers especially for SYPO. For
its financial administration SYPO uses an online syncing programme that allows both the loan officers and
the Directors to always have access to the latest records. All loan officers have a company smart phone,
which facilitates smooth communication between the Netherlands and Uganda through a chat application
and conference call facility.
•
Using IT for growth
SYPO will use www.microbankieren.nl to finance the largest part of its growth plans. All the organisation’s
new loan applications will be posted on this websites for donors to make a direct donation in support of one
of the micro credits. After his donation the ‘microbanker’ receives access to an account that allows him to
track the repayments of ‘his’ client. The collected repayments can subsequently be re-invested into a new
loan application. In this way, SYPO micro banking shows donors exactly how their money is spend while at
the same time making the impact of microfinance visible. The website is linked to client administration
database SYMBA and all information exchange has been fully automated, so that it hardly demands any
time commitment from the loan officers. SYPO micro banking will be marketed extensively through the
social media.
Ad C. The right people management to deliver the job
Key to the success of SYPU Uganda Ltd. is to be a good employer and offer a small team of local employees a
good place to work. This working environment allows us to attract local people with the right set of skills
required to manage, support and execute our local operations. Our view on HR includes a recruitment and
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development approach to attract the right people and develop them in a way that equips them with the right
skills, and nurture a low cost culture to maximize the development impact of our operations:
•
Employ great loan officers that enable our vision
Loan officers are responsible for all operations in their zone; they recruit and train clients, disburse loans,
monitor client activity and collect repayments. Their weekly schedule includes three full days of
repayments, one day of and taking applications, training new groups and visits to businesses, and one day
of administration and meetings with other loan officers. The job of a loan officer is one that requires a lot of
ownership and responsibility. We therefore require our loan officers to have a university degree and be
ambitious, young people with a maximum of five years work experience. Loan officers have to be able to
identify with the mission of our organization, work independently, have an on-the-ground mentality, solid
IT knowledge and strong communications skills. We often hire loan officers that have one or two years’
experience with a conventional microfinance institution and are ready to move into a comparable role with
relatively more responsibility. Recruitment is done through an advertisement in the largest national
newspaper, followed by a round of CV selection and one or two competency-based interviews.
•
Be a good employer
Being a good employer entails offering employees an environment that is safe, trusted and inspiring.
SYPO offers its loan officers a safe work environment. On Monday morning, an outsourced trusted car
service picks up the loan officers from the local bank branch where they take out the money to be disbursed
as loans, and transports the money and the loan officers to their field offices. The car service uses different
cars every couple of weeks, and takes different routes and at different times to decrease predictability of the
operations. The cash money is kept for a maximum of three days in the field offices, in built-in vaults in the
field offices.
The Directors visit the local SYPO Uganda Ltd. organisation on a regular basis to remain a feel for local
working conditions. Our employees are remunerated in line with market standards. At ~175 Euros per
month, the loan officers are rewarded in the ~66th percentile of the microfinance industry in Uganda, but
substantially lower than in the conventional Ugandan banking industry.
SYPO Uganda Ltd. invests heavily in the development of its employees, and all personnel have a substantial
budget for schooling and training. Examples of training requested/received in the first year of operation are
an advanced microfinance diploma, and computer training. The organisation performs semi-annual
reviews of all employees to closely monitor their personal growth and job satisfaction. Approximately 20%
of the loan officer’s remuneration is performance-dependent (assessed on three dimensions:
downward/peer feedback, portfolio health and reporting).
Being a good employer does not just follow from our mission, but also benefits local development, counters
corruption, increases our company effectiveness, and leads to innovation and improved well-being.
•
Provide sufficient expertise for support functions
Support or umbrella functions of the company are distributed between the loan officers, the volunteer
Directors, and volunteers in the Netherlands. Most loan officers have one or two tasks to support the
operations of the company, next to the responsibility for the operations in their zone. To this end, SYPO
employs loan officers with experience in support functions as well. Below is an overview of some of the
main support tasks and their owners:
•
•
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Management – The Managing Director (volunteer), Finance Director (volunteer) and in the future
the Operations Director (remunerated) in Uganda;
Accounting/ financial records – Loan officers (zone bookkeeping), loan officer with accountancy
experience (company bookkeeping), Financial Director (company bookkeeping, financial
monitoring, reporting to the Board);
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•
•
•
•
•
•
•
IT – Loan officer with IT experience for operational IT in Uganda, and volunteers (at least two at
any moment, Dutch) for SYMBA (online client administration database) and SYPO websites;
Licensing (e.g. money lending license, trading license) – Loan officer and local lawyer;
Employer compliance (e.g. employer taxes, health insurances) – Loan officer with HR experience;
HR (e.g. contracts) – Directors;
Recruitment – Directors;
Training of new loan officers – Loan officers with training experience.
Provide development opportunities to local employees
Key to the success of SYPO Uganda Ltd. is the development of our people. We therefore provide our
employees with substantial schooling and training opportunities: loan officers are offered an annual
training budget of 2 million UGX (~585 Euros) for training in microfinance, IT and other areas that might
complement the loan officer’s skill set and benefit the company.
We nurture a learning culture in which feedback is encouraged, across job levels and functions. We perform
semi-annual reviews with personal feedback to monitor our loan officer’s personal growth and job
satisfactions, and discuss feedback and improvement ideas during weekly conference calls with the
Directors and all employees.
Ad D. Instil repayment discipline
•
Instil good payment discipline with clients
To ensure a healthy loans portfolio, the organisation focuses on instilling good payment discipline with all
its clients. The following policies are therefore put in place:
•
•
•
•
•
All clients receive training in repayment discipline and time keeping before their loan is disbursed.
Tardiness of members at the weekly repayment meeting is punished with a small fine payable by
the entire group.
All clients need to be present at every repayment – to ensure regular contact with the clients and to
keep the clients in a regular repayment rhythm. Absence from a weekly meeting (even if money is
sent through a group member) is not acceptable and more than ten absences during the full period
of the loan will result in not being eligible for a subsequent loan. Loan officers visit clients after
each occurrence of absenteeism and discuss the issue both with the client and her group.
Two or more missed/late payments will result in not being eligible for subsequent loans. In case a
client is unable to make her repayment, her group members are asked to contribute her instalment.
Cases of missed repayments are followed up with a client visit during which the client is reminded
of her payment obligation. This visit is also used to identify and resolve any potential problems that
might be keeping the client from making proper repayments.
Minimise loan losses
The organisation will work to keep its PAR30 (a measure of portfolio quality: loan balance of clients with
payments overdue more than thirty days, but not yet written off) below 5% and the loan loss ratio
(percentage of loans written off) below 2%. To achieve this, the organisation employs the following policies
and procedures:
•
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SYPO Uganda Ltd. lends to self-formed groups that are mutually responsible for repayment of each
other’s loans. The mutual responsibility requirement provides clients with a social stimulus to
repay their loans, and gives the organisation additional means to recover its lent out funds. By
having clients form their own groups, the organisation capitalises on the fact that the village women
are better informed about each other’s creditworthiness than any outside organisation can be in the
absence of proper payment history tracking;
Page 14 of 32
•
•
•
A strict payment discipline is installed in all clients by requiring them to make weekly repayments
on their loans;
Clients are incentivised to repay their microcredits by giving them the prospect of a (larger)
subsequent loan, conditional on successful repayment of the outstanding loan;
Loan officers are incentivised to minimise the PAR30 and loan loss ratio of their zones by including
these statistics as key performance indicators of their performance-based pay.
Ad E. Solid management and transparent reporting
Our governance structure is set up to facilitate maximal local development impact, and at the same time
allow us to monitor our operations in line with our company ethics.
Legal entity – SYPO Uganda Ltd. is a Ugandan registered company, with currently 100% of shares owned
by the Dutch NGO Stichting SYPO. Shares are issued and debt is accepted as majority decision of the
organisation’s two Directors.
Management – The company has two Directors: Duko Hopman as Managing Director (Duko is also
Director of the Dutch NGO SYPO), and Emma Kandelaars as Finance Director. SYPO aims to add an
Operations Director of Ugandan nationality to the team of Directors before 2015. Appointment and removal
of the Directors is by majority decision of the shareholders (currently the Dutch NGO SYPO). The reasons
that SYPO has decided to start with two Dutch Directors that have a longer experience at SYPO, are:
•
•
•
To accommodate full transparency and communication, and allow for diligent monitoring in the
first growth phase of the company;
To ensure that the company starts according to the microfinance philosophy that SYPO has
developed over the years, with a focus on being low threshold and fully transparent towards the
clients;
To keep costs of management low (Directors are currently volunteers) and test the model of having
as little management as possible in the field, with relatively high level of ownership of the loan
officers. We have thoroughly explored the possibility of recruiting a local Director in 2011, but after
several recruitment rounds concluded that the calibre required for the position was to expensive
(>€800/month) to be justified by the company’s management needs at the time.
Employees of the company are appointed and contracts are terminated by majority decision of the
Directors. Changes in the company’s product conditions, geographic focus, client target group, or company
policies are made by majority decision of the Directors. Major decisions are approved or taken by the
shareholders. See the RACI matrix below for more details on all levels of decision making (R= Responsible,
A=Accountable, C=Consulted, I=Informed).
Loan appraisal process – All client loans are selected and subsequently presented by the loan officers to
a loan appraisal committee. This appraisal committee consists of all the loan officers of a ‘region’ (three or
four zones in the same geography). The loan officers have the opportunity to ask questions and probe for
more information regarding the applications during this meeting, and visit clients if need be. If the
committee is satisfied with the applications, they are submitted to the Directors of the company, who then
approve or cancel the loans. A loan is thus appraised at several levels: first by the clients in one group,
responsible for each other’s repayments; then by a loan officers, who takes the applications from the
groups; then by the appraisal committee during a region meeting; and finally by the Directors, as a final
check.
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Financial budgeting and reporting – An annual budget for the next year is presented to the
shareholders for approval in November of each year, and a financial report over the previous year is
presented for approval to the shareholders in April of each year. The Directors are responsible for the
timely and complete reporting to sponsors of the company and its shareholders.
RACI matrix
Mandate
Process
Appointments/ removals and remuneration
Apointment/ removal of Board of Directors
Remuneration of Board of Directors
Appointment/ removal and remuneration of management
Appointment/ removal and remuneration of management
Appointment/ removal and remuneration of other employees
Strategy and planning
Long term objectives / mission setting
Yearly corporate business plan
Long term financial planning (3 years)
Agreement with strategic alliances
Changes in approval procedures and authorities
Annual budget
Approving annual accounts
Acquisitions of other entities and / or major assets / developments
Other contracting
Insurance agreements
Engaging the organisation in contracts that pose current or future obligations to third parties
Signing of agreements with building contractors (< 5 million UGX)
Signing of agreements with building contractors (> 5 million UGX)
Banking & Treasury
Opening and closing main bank accounts
Changes to delegation of authorised representatives for main bank accounts
Opening and closing zone sub-accounts
Changes to delegation of authorised representatives for zone sub-accounts
Transactions main bank accounts (< 500,000 UGX)
Transactions main bank accounts (> 500,000 UGX)
Transactions zone sub-accounts (< 500,000 UGX)
Transactions zone sub-accounts (> 500,000 UGX)
Payroll payments
Access to online banking
Procurement & Expenses
Purchasing OPEX items (<500 Euro equivalent)
Purchasing OPEX items (>500 Euro equivalent)
Purchasing CAPEX items (<500 Euro equivalent)
Purchasing CAPEX items (>500 Euro equivalent)
Expense claim approval UG
Expense claim approval NL
•
Comments
Shareholder vote
Shareholder vote
Reported weekly
Prior notification of
Directors required
Reported weekly
Prior notification of
Directors required
Reported weekly
Stichting SYPO
approves Director
expenses
SYPO UG Ltd
management
(role of
Directors in
absence of
mgt)
Shareholders
(currently
board Stichting
SYPO)
Board of
Directors
SYPO UG
Ltd
R+A
R+A
I
I
I
I
I
A+R
A+R
A
R
A
A
A
A
A
A
A
A
R
R
R
R
R
R
R
R
I+C
R
C
R
I
R
R
I+C
C
C
C
I
C
A
A
A
A+R
R
R
R
I
C
C
C
I
A+R
I
I
A
A
A
A
A
I
A
C
A+R
A+R
R
R
I
I
R
A
R
I
I+C
I+C
R
R
I
I
R
R
A+I
R
C
A
R
C
A+I
R
C
A
R
C
I
A
R
SYPO Uganda SYPO Uganda
Ltd
Ltd loan
accountants
officers
I
I
C
C
C
C
R
R
R
R
A+R
Employ good local management
To achieve minimum costs and interest to the client, SYPO Uganda Ltd. will maintain ‘lean’ operations.
This also includes as little management as possible. The loan officers are currently supervised and
monitored by the volunteer Directors. Umbrella tasks of the company such as licensing, IT, tax and HR
responsibilities, etc are distributed between the loan officers. SYPO expects that it is possible to operate
without local management for the next two years. Before 31 December 2015, SYPO will appoint an
Operations Director of Ugandan nationality, who will be in charge of daily management of the loan officers,
and will have a full vote as Director of the company.
•
Zero tolerance for internal corruption
The organisation will follow a zero tolerance policy regarding corruption. When head office management
identifies that funds have gone missing and the involved loan officer cannot provide a satisfactory
explanation, the loan officer’s contract will be terminated immediately and legal prosecution will follow.
A number of measures have been implemented to minimise the opportunity for corruption. To ensure that
loan officers will not illegitimately charge (prospective) clients with additional fees or charges, contracts,
posters and other communication with the client clearly explain the costs of the loan product in both
English and Luganda. The existence of ghost clients is prevented by a thorough appraisal process and close
monitoring of all financial transactions. Each zone / loan officers is audited by a third party every half a
year, including random visits to clients to verify their existence and compliance of the loan officer with the
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loan product costs. In addition to this, each year includes one month of ‘zone rotation’, in which the loan
officers manage each other’s zones to ensure that if loan officers charge illegitimate costs to their clients or
have created ghost clients, this will be known by other loan officers.
•
Good, transparent finance processes and adequate internal control
As described above, SYPO has developed an online client administration database ‘SYMBA’ which registers
all clients and transactions of the company. By using SYMBA, SYPO Uganda Ltd. can guarantee a
transparent financial process. The financial processes in SYMBA are based on the ‘four eyes’ principle,
which means that financial transactions always need approval by a second person; a second pair of eyes.
Based on the ‘four eyes’ principle, each loan request is reviewed by an appraisal committee, consisting of
peer loan officers and the Directors of SYPO.
The release of the loan and subsequent repayments are monitored in SYMBA and matched to the
transactions on each loan officers’ zone’s bank account on a weekly basis. Loan officers enter their collected
repayments into the administration system, with collections deviating from the client contract amount
flagged by the system. All payments below contract amounts require an explanation and are followed up
with the loan officers. Total weekly collections are matched to repayments banked using online access to
each loan officer’s bank account. A similar procedure is followed for all disbursed loans; the disbursement
of loans is entered into the online administration on a weekly basis, and total weekly amounts are matched
to the funds taken out of the loan officer’s account.
For non-portfolio transactions loan officers use petty cash from their designated bank account. Both petty
cash spending and all portfolio transactions are recorded by each loan officer individually in his / her zone’s
financial administration, following standard book keeping practices. All financial records are accessible to
the organisation’s Directors at all times through an online syncing programme. Loan officers provide head
office management with a monthly profit and loss statement for their zone. Loan officers’ records are
checked internally on a monthly basis, and semi-annually by the organisations’ external auditor.
On a yearly basis, financial statements are published on SYPO’s website. The financial statements are in line
with the guidelines of the Global Reporting Initiative, recognised principles of responsible investing. The
company’s finances are audited externally by a registered Ugandan auditor, both on a per-zone and on a
consolidated level. The mid-year audit is mostly targeted at reviewing processes and controls, and results in
a report with recommendations to improve the control framework (see appendix example audit July 2012).
The end-of-year audit is a standard formal audit.
•
Provide good, interactive insight into results
SYPO Uganda Ltd. provides full transparency of its finances and operational progress to all of its direct and
indirect financiers and sponsors, the Supervisory board/Board of Director and Executive Board of Stichting
SYPO. Reporting will include both the monthly and annual financial reports, semi-annual audit reports,
social and financial impact reports, and continuous access to ‘live’ Key Performance Indicators (KPIs) of
portfolio health, such as PAR30, default rate, and the arrears rate (see example of one loan officer’s KPI
dashboard in SYMBA below).
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•
Ad F. Learning based growth – continuous social impact assessment
SYPO believes that microfinance can be a very strong tool in the fight against poverty. Recent literature,
including the findings of large randomized controlled trials of high methodological quality
(http://www.sciencedirect.com/science/article/pii/S0305750X12000496) have shown that while some
forms of microfinance have significant beneficial financial and social impact, others do not. SYPO has based
the choice of clients, products and method of delivery on these conclusions in literature (e.g. group lending,
individual business plans, flexibility of repayments, rural penetration and avoidance of multiple lending,
targeting of women, etc). However, given the diversity
of findings in empirical research, we feel that it is
necessary to also measure our own impact on a
continuous basis. Our specific client profile, geography,
and other characteristics may produce other outcomes
than can be expected based on literature.
As part of the loan appraisal process of every client, the
client is asked to fill out the Grameen Foundation’s
‘Progress out of Poverty Index’ (PPI) for Uganda. This
index is a statistical tool to estimate the chance of a
client to fall into a specific income group. If for instance
a client has a PPI score of <50, this client has a >80%
likelihood of living under the $2.50/day poverty line.
By taking the PPI with every client at different
moments in time, SYPO is able to assess the movement
out of poverty of this client. We intend to complement this research with assessments of control groups, to
ensure that the measured effect is not just a regional increase of income due to macroeconomic factors. On
top of the PPI, SYPO has designed several qualitative questions to assess each client’s wellbeing, such as
“Looking back at the last year and on a scale from 1 to 10, to what extend have you been able to make the choices in life
that you like to make”. SYPO will share the outcome of its impact assessments on its website.
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5.
•
Fundraising – www.microbankieren.nl
Crowd-funding
Financing of the growth of the company will depend largely on donations.
For this purpose, the Dutch NGO Stichting SYPO is building the website
www.microbankieren.nl, on which all individual client business plans will
be placed for direct sponsoring by individuals and companies. Posting of
the business plans on www.microbankieren.nl is done automatically by our
client administration system SYMBA, and does not increase the burden on
the operations in Uganda. Based on the client’s profile and business plan, a
sponsor can choose to support an individual loan application by donating
money for the micro credit online. After donating, the sponsor receives a
login with access to information regarding the progress of ‘his client’, can
monitor the weekly repayments, and can ask questions to the client. The
sponsor will have the ability to once again sponsor a business plan with the money repaid by their first
client. With its full transparency in the way microfinance works (e.g. visibility of all the transactions and
client profiles), www.microbankieren.nl will serve to increase awareness across society in the Netherlands.
The website www.microbankieren.nl will go online in first quarter of 2013 and will attract the majority of
the financing required for the growth of the company (see appendix business model). To this end, the
website will be promoted extensively to the Dutch public. A promotion plan is being drafted, which outlines
the focus on social media, press releases, event promotions, and direct visits to companies, through which
the business plans on the website will be promoted to sponsors. To maximize donations and awareness,
SYPO aims to have at least 4,000 unique visitors per month on the website.
•
Small and Medium Enterprises
SYPO has long depended on donations from Small and Medium Enterprises (SME), and will continue to
draw support from this segment. The nature of our entrepreneurial operations in Uganda is close to the
heart of many working in the Dutch SME market, and even direct linkages (e.g. a retailer in the Netherlands
supporting microcredits for women in retail in Uganda). SYPO intends to actively approach SME in 2013,
with the proposal to support all microcredits in one or more zones in our microfinance operation in
Uganda. This gives a company in the Netherlands (or elsewhere) the opportunity to choose between small
villages (in which the build-up of a loans portfolio would be ~€10,000) and larger villages (up to
~€80,000). Channelling the donation through www.microbankieren.nl, the company can – with company
login details – follow the progress of its portfolio throughout the year, giving employees the opportunity to
choose which loans they like to support. SYPO intends to raise 50% of its proceeds of
www.microbankieren.nl from the SME segment.
•
Institutional donors
Although the financial crisis has significantly lowered the budgets of many of the Netherlands’ institutional
donors, SYPO will still draw some € 150,000 from Dutch NGOs – some of which have supported SYPO in
the past. Institutional donors include those NGOs that receive government funds to redistribute to smaller
NGOs, but also institutions that manage family or company wealth for charitable purposes.
•
Investors
SYPO realizes that there are commercial funds available for microfinance (e.g. Blue Orchard, Oikocredit,
Triodos funds, Credit Agricole). However, in this early growth phase it is not feasible to grow with these
funds alone. At this stage in SYPO Uganda Ltd.’s growth, we do not yet meet the commercial funds’
requirements, or the cost of funds is prohibitively high. After the initial growth phase of the next three
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years, in which SYPO Uganda Ltd. grows its equity base, we will re-evaluate our options on the fund
markets.
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6.
Who we are
Background
The Dutch NGO Stichting SYPO has over 9 years of experience with economic projects in the Mukono and
Buikwe districts and over 2.5 years experience with microfinance. SYPO was founded in 2003 to finance and
support several social projects with an entrepreneurial character, such as a project to ensure the local adoption
of HIV orphans through the start of a local yoghurt factory and dairy cooperative, and a medical project to
improve primary healthcare throughout the Mukono and Buikwe districts. Other projects included SME
investments and the start of a local guesthouse.
In 2010, SYPO supported a local partner organization to start a microfinance project. The project was a success,
but the partner chose not to grow beyond a 100 loan portfolio. However, because of the obvious impact of
microfinance, SYPO decided to focus its efforts on this form of support to Uganda. Stichting SYPO founded the
company SYPO Uganda Ltd. in the summer of 2011, with the ambition to grow to a portfolio of loans of 3000 in
2015.
Legal structure
The company in Uganda is a ' Limited by shares ' (b.v. equivalent) company, of which all shares are owned by
Stichting SYPO in the Netherlands. The two Directors of the company are the Dutch volunteers Duko Hopman
and Emma Kandelaars. The Directors are supervised by the shareholders, currently represented by Stichting
SYPO’s Board in the Netherlands, which meets at least quarterly.
Stichting SYPO, 100% shareholder of the Ugandan company SYPO Uganda Ltd., is a Dutch foundation/ NGO
with a supervisory board, a Director, and volunteers.
Our people
Below an overview of all the people that help make SYPO Uganda Ltd. a success.
•
Stichting SYPO
Supervisory Board / Board of Directors
•
Ger van der Bruggen, Chairman – HR specialist and entrepreneur
Ger has worked as HR Director at Vredestijn for seven years and has subsequently ran his own HR
consultancy company for ten years. Ger has been chairman of SYPO since its founding in 2003.
•
Nico Hopman, Secretary – HR specialist
Nico has worked as HR consultant for over 15 years, specializing in the healthcare industry.
•
Pieter de Hoop, Board member – Entrepreneur, agricultural specialist and Africa specialist
Pieter has been an agricultural entrepreneur and consultant, with experience working for clients in
Africa.
•
Arjen Laan, Treasurer – Entrepreneur, Africa specialist
Arjen has worked as HR Director for Redevco, is an entrepreneur, and has worked for Medecins Sans
Frontieres, with extensive experience working in Africa.
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Executive Board
•
Duko Hopman, Director – Strategy Consultant, Africa specialist
Duko is 28 years old, and has studied molecular biology and epidemiology in the Netherlands. Duko
has been SYPO’s Director since its founding in 2003, and has worked for SYPO in Uganda for a year
on the start of its microfinance projects and a local guesthouse. Since two years now, Duko has
worked as a strategy consultant with McKinsey & Company.
Volunteers
•
Emma Kandelaars, Financial manager – Econometrist, Master of Public Administration, Africa
specialist
•
Manolito van Ardenne, Financial volunteer – Group controller
Manolito works as group controller at Redevco and advises SYPO Uganda Ltd. with its financial
planning.
•
Toine Teurlings, IT – IT specialist, Oracle specialist
Toine designs and builds data warehouses for such clients as UWV, Delta Lloyd, Schiphol Airport,
Essent and the Public Prosecutor. Toine helps to develop and maintain SYMBA, he also coordinates
the development of www.microbankieren.nl.
•
Ralph Hopman, IT – IT specialist, Oracle specialist
Ralph has worked as Oracle developer for Oracle and Bol.com, and developed the client
administration system SYMBA for SYPO.
•
Dik Smid, SYPO microbankieren construction and maintenance – Website builder, Drupal specialist
Dik works as a freelance Drupal specialist and supports SYPO with the development of
www.microbankieren.nl.
•
Kees Wagemaker, Agrarisch specialist – Farmer
Kees has worked as an agricultural entrepreneur in the Netherlands, is dairy specialist, and has spent
many months in Uganda advising the dairy cooperative in SYPO’s Yoghurt project.
•
Leonie van den Heuvel, Medical volunteer – Doctor / physician
Leonie is physician in the Netherlands, has worked in Uganda for SYPO to give medical trainings in
SYPO’s MediStuctures project, and is still active in the promotion of the NGO in the Netherlands.
•
Sonja Brouwer, Communication / promotion – Communication Consultant
Sonja works as an independent communication consultant (www.brouwerpowerrr.nl). For SYPO
Uganda Ltd. she is writing a communication plan to attract and activate donors to the
website www.microbankieren.nl.
•
SYPO Uganda Ltd.
Executive Board
•
Duko Hopman, Managing Director – Strategy Consultant, Africa specialist
•
Emma Kandelaars, Finance Director – Econometrist, Master of Public Administration, Africa specialist
Emma is 25 years old, has studied econometrics in the Netherlands and holds a professional Master’s
degree in Public Administration from the London School of Economics. Emma has been SYPO’s
financial manager since 2007, and has worked for SYPO in Uganda to start its microfinance project.
She is currently based in South Sudan where she works for the country’s largest microfinance
organisation.
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Employees
•
Andrew Ssozi, local Loan Officer
•
Lydia Ayango, local Loan Officer
•
Milly Naggayi, local Loan Officer
•
Lydia Apio, local Loan Officer
All loan officers have at least a Bachelor’s degree and typically several years work experience, mostly
as loan officer.
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7.
A sound financial plan to realize our vision
Growth plan and financial need
To achieve its objective of growing to a portfolio of 3000 active loans, SYPO requires another € 400,000 euro of
funding. The organization has already been successful in attracting € 125,000 in loans to cover immediate
financial needs. SYPO will take a number of actions to achieve the remainder of its funding target. Most
importantly, it will use the before mentioned website ‘www.microbankieren.nl’ to attract donations from private
individuals. In addition to this, SYPO will aim to attract € 150,000 from institutional donors and where needed,
donations from other sources that have proven successful in the past:
•
•
•
•
Fund applications to Dutch foundations;
Approach small and medium sized companies;
Monthly direct debit donations of individuals;
Themed activities at “service clubs” (e.g. Rotary, Lions Club).
The long term debt that SYPO has attracted for Q4 2012-Q2 2013 has the following characteristics:
•
•
•
•
•
Stichting SYPO in the Netherlands will be the receiving party, which will lend the funds onward to SYPO
Uganda Ltd.;
The total loan value is divided into € 10,000-€ 25,000 individual loans;
The loan period is 3 years;
0-2% Interest;
Exchange rate risk will be carried in full by SYPO Uganda Ltd., and is partially covered by the Rabobank
Foundation
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Financial overview
The following pages show SYPO Uganda Ltd.’s full financial planning and a summary income statement for the
coming 3 years. The organization is projected to become profitable and with that self-sustainable in the last
quarter of 2013.
The planning shows the financing required for the company to be able to sustain its growth path. The attracted
funding of €150,000 in loans from Dutch lenders will cover the financing need of the first part of 2013 and will
allow SYPO microbankieren to get fully operational. It is anticipated that by the end of 2013 SYPO
microbankieren will be able to generate the majority share of the company’s financing requirement. Because
income through www.microbankieren.nl will remain slightly unpredictable, the organization aims to also
attract €150,000 in grants from institutional donors. This income will help smoothen out fluctuations in SYPO
microbankieren revenue and guarantee a stable financing stream for the Ugandan company.
SYPO Uganda Ltd. will receive its €150,000 debt investment spread out over the last quarter of 2012 and the
first six months of 2013. The loans have a loan period of three years and will have to be paid back in full by the
end of 2015 / early 2016. The Dutch lenders will make their investment in Euros and SYPO Uganda Ltd. will
cover the full exchange rate risk. The company will take a reservation for loan repayment topped up with an
additional 10% of the total loan amount to cover currency losses. Bloomberg predictions for the development of
the Ugandan shilling show that it is unlikely that the currency will depreciate by more than 10% over the loan
period.
The income statement shows that with the organization’s efforts to keep costs at a minimum, the company will
be robustly profitable in 2015 – even with an interest rate as low as 35%. It is very promising that while keeping
the costs for clients low and the loan product accessible to the poorest of women, SYPO Uganda Ltd. is still well
on its way to become a sustainable and financially independent organization. As long as Stichting SYPO is the
company’s sole shareholder, all profits will be channelled back into the organization and used for portfolio
expansion.
With an initial debt investment of €150,000, institutional subsidies of €150,000 and SYPO microbankieren
donaties worth €250,000, SYPO Uganda Ltd. will have grown to a loan portfolio of almost half a million Euros
by the end of 2015 that serves 3000 Ugandan women with affordable business loans, while at the same time
being a self-sustainable organization.
Income statement
Interest income
Loan loss
Salary expenses
Overhead expenses
Rent & utilities zone office
Depreciation
Interest expenses
Operating income
Currency
Gifts
Earnings before tax
Tax
Net earnings
Net earning (excl gifts) % of portfolio
2012
11,415
-716
-12,002
-4,367
-1,950
-613
0
-8,233
-566
0
-8,799
2,470
-6,329
-14.5%
2013
36,541
-2,333
-24,117
-4,760
-3,826
-1,202
0
304
-6,794
38,056
31,566
-91
31,475
-4.8%
2014
79,568
-5,351
-45,254
-5,188
-6,024
-2,882
0
14,869
-7,868
209,369
216,370
-4,461
211,910
0.9%
2015
282,852
-20,172
-127,736
-6,225
-14,778
-9,153
0
104,787
-7,606
201,328
298,510
-31,436
267,073
13.5%
N.B. The ‘net earnings’ in this table include ‘gifts’ – donations to the Dutch NGO SYPO. For an
overview of results of the operations themselves, please refer to the row ‘operating income’.
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Financial statements
Income statement
Interest income
Loan loss
Salary expenses
Overhead expenses
Rent & utilities zone office
Depreciation
Interest expenses
Operating income
Currency
Gifts
Earnings before tax
Tax
Net earnings
Net earning (excl gifts) % of portfolio
12Q1
1,616
-88
-2,328
-1,608
-390
-123
0
-2,921
0
0
-2,921
876
-2,044
-7.1%
Cash flow statement
Cash flow from operating activities
Interest income
Salary expenses
Overhead expenses
Rent & utilities zone office
Tax
Total cash flow from operating activities
Cash flow from investment activities
Increase in loans
Decrease in loans
Capital expenditures
Total cash flow from investment activities
Cash flow from financing activities
Proceeds from gifts
Proceeds from issuing debt
Proceeds from issuing equity
Repayment of debt principal
Repayment of equity
Interest expenses
Dividend distributions
Total cash flow from financing activities
Net cash flow
Balance sheet
Assets
Loan portfolio
Fixed tangible assets
Deferred tax asset
Cash
Total assets
Equity and debt
Equity
Debt
Total equity and debt
Check
12Q2
2,454
-149
-2,452
-575
-390
-123
0
-1,235
0
0
-1,235
371
-865
-2.3%
12Q3
3,255
-209
-3,611
-1,608
-585
-184
0
-2,942
0
0
-2,942
883
-2,060
-4.1%
12Q4
4,090
-270
-3,611
-575
-585
-184
0
-1,135
-566
0
-1,701
340
-1,361
-2.3%
13Q1
5,680
-363
-5,278
-1,753
-850
-267
0
-2,831
-1,187
0
-4,018
849
-3,169
-3.4%
13Q2
7,963
-495
-5,379
-627
-850
-267
0
345
-1,815
0
-1,470
-104
-1,573
-1.3%
13Q3
10,289
-648
-6,654
-1,753
-1,063
-334
0
-163
-1,885
4,261
2,214
49
2,263
-1.3%
13Q4
12,608
-827
-6,805
-627
-1,063
-334
0
2,953
-1,908
33,795
34,840
-886
33,954
0.1%
14Q1
15,294
-1,019
-8,808
-1,911
-1,390
-437
0
1,730
-1,931
65,236
65,034
-519
64,515
-0.3%
14Q2
18,534
-1,228
-8,973
-683
-1,390
-437
0
5,824
-1,955
42,087
45,956
-1,747
44,209
0.8%
14Q3
21,480
-1,442
-13,655
-1,911
-1,622
-1,004
0
1,847
-1,979
65,572
65,439
-554
64,885
-0.2%
14Q4
24,260
-1,663
-13,819
-683
-1,622
-1,004
0
5,469
-2,003
36,476
39,941
-1,641
38,301
0.5%
15Q1
27,128
-1,883
-15,063
-745
-1,768
-1,095
0
6,576
-2,028
61,363
65,910
-1,973
63,938
0.7%
15Q2
30,409
-2,102
-15,197
-745
-1,768
-1,095
0
9,502
-2,053
40,689
48,139
-2,851
45,288
1.1%
15Q3
32,914
-2,304
-15,257
-745
-1,768
-1,095
0
11,745
-2,078
39,251
48,919
-3,524
45,395
1.3%
15Q4
34,896
-2,486
-15,257
-745
-1,768
-1,095
0
13,545
-1,448
17,307
29,404
-4,064
25,341
1.7%
16Q1
36,827
-2,652
-16,630
-812
-1,927
-1,193
0
13,612
0
30,793
44,406
-4,084
40,322
1.9%
16Q2
39,104
-2,800
-16,647
-812
-1,927
-1,193
0
15,725
0
11,925
27,650
-4,718
22,932
2.1%
16Q3
40,467
-2,924
-16,842
-812
-1,927
-1,193
0
16,768
0
0
16,768
-5,030
11,738
2.1%
16Q4
41,108
-3,021
-16,842
-812
-1,927
-1,193
0
17,313
0
0
17,313
-5,194
12,119
2.2%
12Q1
12Q2
12Q3
12Q4
13Q1
13Q2
13Q3
13Q4
14Q1
14Q2
14Q3
14Q4
15Q1
15Q2
15Q3
15Q4
16Q1
16Q2
16Q3
16Q4
1,616
-2,328
-1,608
-390
0
-2,710
2,454
-2,452
-575
-390
0
-964
3,255
-3,611
-1,608
-585
0
-2,549
4,090
-3,611
-575
-585
0
-681
5,680
-5,278
-1,753
-850
0
-2,201
7,963
-5,379
-627
-850
0
1,107
10,289
-6,654
-1,753
-1,063
0
819
12,608
-6,805
-627
-1,063
0
4,113
15,294
-8,808
-1,911
-1,390
0
3,185
18,534
-8,973
-683
-1,390
0
7,488
21,480
-13,655
-1,911
-1,622
-441
3,852
24,260
-13,819
-683
-1,622
-1,641
6,495
27,128
-15,063
-745
-1,768
-1,973
7,581
30,409
-15,197
-745
-1,768
-2,851
9,849
32,914
-15,257
-745
-1,768
-3,524
11,621
34,896
-15,257
-745
-1,768
-4,064
13,063
36,827
-16,630
-812
-1,927
-4,084
13,374
39,104
-16,647
-812
-1,927
-4,718
15,001
40,467
-16,842
-812
-1,927
-5,030
15,856
41,108
-16,842
-812
-1,927
-5,194
16,333
-20,833
7,132
-1,225
-14,926
-20,833
12,281
0
-8,553
-31,250
17,465
-1,225
-15,010
-31,250
22,617
0
-8,633
-66,233
30,269
-1,335
-37,299
-66,233
41,031
0
-25,201
-92,726
53,880
-1,335
-40,180
-92,726
69,225
0
-23,501
-138,117
85,583
-1,455
-53,990
-138,117
102,997
0
-35,120
-168,809
121,261
-7,396
-54,944
-168,809
140,342
0
-28,468
-213,680
159,264
0
-54,415
-213,680
177,695
0
-35,985
-231,486
195,192
0
-36,294
-231,486
211,219
0
-20,268
-264,672
225,746
0
-38,925
-264,672
238,120
0
-26,551
-264,672
249,047
0
-15,624
-264,672
257,941
0
-6,730
0
0
17,636
0
0
0
0
17,636
0
0
0
9,516
0
0
0
0
9,516
0
0
0
17,559
0
0
0
0
17,559
0
0
50,000
0
0
0
0
0
50,000
40,685
0
50,000
0
0
0
0
0
50,000
10,500
0
50,000
0
0
0
0
0
50,000
25,905
4,261
0
0
0
0
0
0
4,261
-35,100
33,795
0
0
0
0
0
0
33,795
14,408
65,236
0
0
0
0
0
0
65,236
14,431
42,087
0
0
0
0
0
0
42,087
14,455
65,572
0
0
0
0
0
0
65,572
14,479
36,476
0
0
0
0
0
0
36,476
14,503
61,363
0
0
0
0
0
0
61,363
14,528
40,689
0
0
0
0
0
0
40,689
14,553
39,251
0
0
0
0
0
0
39,251
14,578
17,307
0
0
-57,881
0
0
0
-40,574
-47,779
30,793
0
0
-57,881
0
0
0
-27,088
-52,639
11,925
0
0
-57,881
0
0
0
-45,956
-57,506
0
0
0
0
0
0
0
0
231
0
0
0
0
0
0
0
0
9,603
Opening
12Q1
12Q2
12Q3
12Q4
13Q1
13Q2
13Q3
13Q4
14Q1
14Q2
14Q3
14Q4
15Q1
15Q2
15Q3
15Q4
16Q1
16Q2
16Q3
16Q4
15,000
0
28,613
1,103
876
0
30,591
37,016
980
1,247
0
39,243
50,592
2,021
2,129
0
54,743
58,956
1,838
2,470
40,685
103,948
94,556
2,906
3,319
51,185
151,966
119,262
2,639
3,216
77,091
202,208
157,460
3,640
3,265
41,991
206,355
180,134
3,306
2,379
56,399
242,217
231,649
4,325
1,860
70,830
308,663
265,541
3,888
113
85,285
354,827
311,648
10,280
0
99,763
421,691
338,453
9,275
0
114,267
461,995
390,985
8,181
0
128,794
527,960
424,868
7,086
0
143,347
575,301
458,858
5,991
0
157,925
622,774
476,640
4,896
0
110,145
591,682
512,913
3,703
0
57,506
574,122
536,664
2,509
0
0
539,174
549,364
1,316
0
231
550,911
553,074
123
0
9,834
563,030
30,591
0
30,591
0
39,243
0
39,243
0
54,743
0
54,743
0
53,382
50,566
103,948
0
50,213
101,753
151,966
0
48,640
153,568
202,208
0
50,903
155,452
206,355
0
84,857
157,360
242,217
0
149,372
159,291
308,663
0
193,581
161,246
354,827
0
258,466
163,225
421,691
0
296,767
165,228
461,995
0
360,704
167,256
527,960
0
405,993
169,308
575,301
0
451,388
171,386
622,774
0
476,729
114,953
591,682
0
517,051
57,072
574,122
0
539,983
-810
539,174
0
551,721
-810
550,911
0
563,840
-810
563,030
0
0
15,000
0
Financing
Financing and repayment
Reservation repaym.
Yes
Financing needed
% Gifts
% Equity
% Debt
- Basket 3 year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
Type
Bullet
Linear
Linear
Linear
Linear
Linear
Linear
Linear
Linear
Linear
Proceeds from gifts
Proceeds from issuing equity
PwC
Interest
0.00%
12Q1
12Q2
12Q3
12Q4
13Q1
13Q2
13Q3
13Q4
14Q1
14Q2
14Q3
14Q4
15Q1
15Q2
15Q3
15Q4
16Q1
16Q2
16Q3
16Q4
17,636
0.00%
100.00%
9,516
0.00%
100.00%
17,559
0.00%
100.00%
13,727
0.00%
0.00%
12,426
0.00%
0.00%
515
0.00%
0.00%
4,261
100.00%
0.00%
33,795
100.00%
0.00%
65,236
100.00%
0.00%
42,087
100.00%
0.00%
65,572
100.00%
0.00%
36,476
100.00%
0.00%
61,363
100.00%
0.00%
40,689
100.00%
0.00%
39,251
100.00%
0.00%
17,307
100.00%
0.00%
30,793
100.00%
0.00%
11,925
100.00%
0.00%
0
100.00%
0.00%
0
100.00%
0.00%
50,000
50,000
50,000
0
0
0
0
0
0
4,261
0
33,795
0
65,236
0
42,087
0
65,572
0
36,476
0
61,363
0
40,689
0
39,251
0
17,307
0
30,793
0
11,925
0
0
0
0
0
Duration
3
0
17,636
0
9,516
0
17,559
Page 26 of 32
Proceeds from issuing debt
Total
0
17,636
0
9,516
0
17,559
50,000
50,000
50,000
50,000
50,000
50,000
0
4,261
0
33,795
0
65,236
0
42,087
0
65,572
0
36,476
0
61,363
0
40,689
0
39,251
0
17,307
0
30,793
0
11,925
0
0
0
0
Proceeds from issuing debt
- Basket 3 year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
Proceeds from issuing debt
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
50,000
0
0
0
0
0
0
0
0
0
50,000
50,000
0
0
0
0
0
0
0
0
0
50,000
50,000
0
0
0
0
0
0
0
0
0
50,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
57,881
0
0
0
0
0
0
0
0
0
57,881
57,881
0
0
0
0
0
0
0
0
0
57,881
57,881
0
0
0
0
0
0
0
0
0
57,881
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
12Q1
12Q2
12Q3
12Q4
13Q1
13Q2
13Q3
13Q4
14Q1
14Q2
14Q3
14Q4
15Q1
15Q2
15Q3
15Q4
16Q1
16Q2
16Q3
16Q4
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
17,636
0.00%
0
0
0
27,152
0.00%
0
0
0
44,711
0.00%
0
0
0
44,711
0.00%
0
40,685
0
44,711
0.00%
0
51,185
0
44,711
0.00%
0
77,091
0
44,711
0.00%
0
41,991
0
44,711
0.00%
0
56,399
0
44,711
0.00%
0
70,830
0
44,711
0.00%
0
85,285
0
44,711
0.00%
0
99,763
0
44,711
0.00%
0
114,267
0
44,711
0.00%
0
128,794
0
44,711
0.00%
0
143,347
0
44,711
0.00%
0
157,925
0
44,711
0.00%
0
110,145
0
44,711
0.00%
0
57,506
0
44,711
0.00%
0
0
0
44,711
0.00%
0
231
0
44,711
0.00%
0
9,834
0
Repayment of debt principal
- Basket 3 year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
Repayment of debt principal
Duration
3
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Interest and dividend distributions
Interest
- Basket 3 year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
- Basket year
Interest
Dividend distributions
Share capital
Target dividend yield
Target dividend distributions
Available cash reserves
Dividend distributions
Other
Tax
Tax due
EBT (exc. gifts)
Adjustments (exc. gifts)
Taxable income
Tax loss carry forward
Taxable amount
Tax due
Tax loss carry forward
Opening balance
Losses created
Losses utilised
Closing balance
Other
Loan portfolio
Opening balance
Increase in loans
Decrease in loans
Loan loss
Closing balance
30.00%
12Q1
12Q2
12Q3
12Q4
13Q1
13Q2
13Q3
13Q4
14Q1
14Q2
14Q3
14Q4
15Q1
15Q2
15Q3
15Q4
16Q1
16Q2
16Q3
16Q4
-2,921
0
-2,921
0
0
0
-1,235
0
-1,235
0
0
0
-2,942
0
-2,942
0
0
0
-1,701
566
-1,135
0
0
0
-4,018
1,187
-2,831
0
0
0
-1,470
1,815
345
-345
0
0
-2,047
1,885
-163
0
0
0
1,045
1,908
2,953
-2,953
0
0
-202
1,931
1,730
-1,730
0
0
3,869
1,955
5,824
-5,824
0
0
-132
1,979
1,847
-375
1,471
441
3,466
2,003
5,469
0
5,469
1,641
4,548
2,028
6,576
0
6,576
1,973
7,450
2,053
9,502
0
9,502
2,851
9,667
2,078
11,745
0
11,745
3,524
12,097
1,448
13,545
0
13,545
4,064
13,612
0
13,612
0
13,612
4,084
15,725
0
15,725
0
15,725
4,718
16,768
0
16,768
0
16,768
5,030
17,313
0
17,313
0
17,313
5,194
0
2,921
0
2,921
2,921
1,235
0
4,156
4,156
2,942
0
7,098
7,098
1,135
0
8,233
8,233
2,831
0
11,064
11,064
0
-345
10,719
10,719
163
0
10,882
10,882
0
-2,953
7,929
7,929
0
-1,730
6,199
6,199
0
-5,824
375
375
0
-375
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
12Q1
12Q2
12Q3
12Q4
13Q1
13Q2
13Q3
13Q4
14Q1
14Q2
14Q3
14Q4
15Q1
15Q2
15Q3
15Q4
16Q1
16Q2
16Q3
16Q4
15,000
20,833
-7,132
-88
28,613
28,613
20,833
-12,281
-149
37,016
37,016
31,250
-17,465
-209
50,592
50,592
31,250
-22,617
-270
58,956
58,956
66,233
-30,269
-363
94,556
94,556
66,233
-41,031
-495
119,262
119,262
92,726
-53,880
-648
157,460
157,460
92,726
-69,225
-827
180,134
180,134
138,117
-85,583
-1,019
231,649
231,649
138,117
-102,997
-1,228
265,541
265,541
168,809
-121,261
-1,442
311,648
311,648
168,809
-140,342
-1,663
338,453
338,453
213,680
-159,264
-1,883
390,985
390,985
213,680
-177,695
-2,102
424,868
424,868
231,486
-195,192
-2,304
458,858
458,858
231,486
-211,219
-2,486
476,640
476,640
264,672
-225,746
-2,652
512,913
512,913
264,672
-238,120
-2,800
536,664
536,664
264,672
-249,047
-2,924
549,364
549,364
264,672
-257,941
-3,021
553,074
Equity
PwC
Page 27 of 32
Opening balance
Proceeds from issuing equity
Redemption share capital
Net earnings
Dividend distributions
Closing balance
Fixed tangible assets
Opening balance
Capital expenditures
Depreciation
Closing balance
15,000
17,636
30,591
9,516
39,243
17,559
54,743
0
53,382
0
50,213
0
48,640
0
50,903
0
84,857
0
149,372
0
193,581
0
258,466
0
296,767
0
360,704
0
405,993
0
451,388
0
476,729
0
517,051
0
539,983
0
551,721
0
-2,044
0
30,591
-865
0
39,243
-2,060
0
54,743
-1,361
0
53,382
-3,169
0
50,213
-1,573
0
48,640
2,263
0
50,903
33,954
0
84,857
64,515
0
149,372
44,209
0
193,581
64,885
0
258,466
38,301
0
296,767
63,938
0
360,704
45,288
0
405,993
45,395
0
451,388
25,341
0
476,729
40,322
0
517,051
22,932
0
539,983
11,738
0
551,721
12,119
0
563,840
0
1,225
-123
1,103
1,103
0
-123
980
980
1,225
-184
2,021
2,021
0
-184
1,838
1,838
1,335
-267
2,906
2,906
0
-267
2,639
2,639
1,335
-334
3,640
3,640
0
-334
3,306
3,306
1,455
-437
4,325
4,325
0
-437
3,888
3,888
7,396
-1,004
10,280
10,280
0
-1,004
9,275
9,275
0
-1,095
8,181
8,181
0
-1,095
7,086
7,086
0
-1,095
5,991
5,991
0
-1,095
4,896
4,896
0
-1,193
3,703
3,703
0
-1,193
2,509
2,509
0
-1,193
1,316
1,316
0
-1,193
123
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
50,000
0
566
50,566
50,566
50,000
0
1,187
101,753
101,753
50,000
0
1,815
153,568
153,568
0
0
1,885
155,452
155,452
0
0
1,908
157,360
157,360
0
0
1,931
159,291
159,291
0
0
1,955
161,246
161,246
0
0
1,979
163,225
163,225
0
0
2,003
165,228
165,228
0
0
2,028
167,256
167,256
0
0
2,053
169,308
169,308
0
0
2,078
171,386
171,386
0
-57,881
1,448
114,953
114,953
0
-57,881
0
57,072
57,072
0
-57,881
0
-810
-810
0
0
0
-810
-810
0
0
0
-810
1
2
0
2
1
3
0
3
1
4
0
4
1
5
0
5
1
6
0
6
1
7
0
7
0
7
0
7
0
7
0
7
0
7
0
7
0
7
0
7
Debt
Opening balance
Proceeds from issuing debt
Repayment of debt principal
Currency
Closing balance
Zone offices
New zone offices
Total zone offices
1
Charts
Loan portfolio
300
600
200
500
100
400
0
300
Loan loss
Decrease in loans
Increase in loans
16Q4
16Q3
16Q2
16Q1
15Q4
15Q3
15Q2
15Q1
14Q4
14Q3
14Q2
14Q1
13Q4
13Q3
13Q2
13Q1
12Q4
12Q3
12Q2
12Q1
-100
Closing balance (RH scale)
200
-200
100
-300
0
Zone offices
1
8
7
1
New zone offices
Total zone offices (RH scale)
6
1
5
1
4
3
0
2
0
1
16Q4
16Q3
16Q2
16Q1
15Q4
15Q3
15Q2
15Q1
14Q4
14Q3
14Q2
14Q1
13Q4
13Q3
13Q2
13Q1
12Q4
12Q3
12Q2
12Q1
0
0
Debt as % of loan portfolio
128.8%
600
107.6%
500
85.8%
400
300
200
100
PwC
0.0% 0.0% 0.0%
98.7%
87.4%
68.8%
60.7%
52.4%48.8%
42.8%39.8%
37.4%
24.1%
11.1%
-0.2%-0.1%-0.1%
140%
Debt
120%
Loan portfolio
100%
80%
60%
40%
20%
Page 28 of 32
0.0% 0.0% 0.0%
-0.2%-0.1%-0.1%
0
16Q4
16Q3
16Q2
16Q1
15Q4
15Q3
15Q2
15Q1
14Q4
14Q3
14Q2
14Q1
13Q4
13Q3
13Q2
13Q1
12Q4
12Q3
12Q2
12Q1
-100
20%
0%
-20%
Interest expense as % of interest income
45
100%
40
90%
80%
Interest expenses
35
70%
Interest expense as % of interest income
Interest income
30
60%
25
50%
20
40%
15
30%
10
5
20%
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
0
10%
0%
16Q4
16Q3
16Q2
16Q1
15Q4
15Q3
15Q2
15Q1
14Q4
14Q3
14Q2
14Q1
13Q4
13Q3
13Q2
13Q1
12Q4
12Q3
12Q2
12Q1
Sensitivity analysis exchange rate effects
Annual increase EUR/UGX (12Q1-14Q2)
Optimistic case
0.00%
Base case
5.00%
Pessimistic case
0.00%
Base case
5.00%
Movement debt (Base case)
EUR/UGX (average per quarter)
Currency
200
Decrease
Increase
Closing
3,500
3,400
150
3,300
100
3,200
50
-50
12Q1
12Q2
12Q3
12Q4
13Q1
13Q2
13Q3
13Q4
14Q1
14Q2
14Q3
14Q4
15Q1
15Q2
15Q3
15Q4
16Q1
16Q2
16Q3
16Q4
17Q1
17Q2
17Q3
17Q4
18Q1
18Q2
18Q3
18Q4
19Q1
19Q2
19Q3
19Q4
20Q1
20Q2
20Q3
20Q4
21Q1
21Q2
21Q3
21Q4
3,100
0
3,000
2,900
-100
2,800
12Q1
Debt as % of loan portfolio
12Q3
12Q4
13Q1
13Q2
13Q3
13Q4
14Q1
14Q2
14Q3
14Q4
Interest expense as % of interest income
OC
140%
12Q2
BC
OC
PC
BC
PC
9%
8%
120%
7%
100%
6%
80%
5%
60%
4%
3%
40%
2%
20%
1%
16Q4
16Q3
16Q2
16Q1
Page 29 of 32
15Q4
15Q3
15Q2
15Q1
14Q4
14Q3
14Q2
14Q1
13Q4
13Q3
13Q2
13Q1
12Q4
12Q3
12Q2
0%
12Q1
16Q4
16Q3
16Q2
16Q1
15Q4
15Q3
15Q2
15Q1
14Q4
14Q3
14Q2
14Q1
13Q4
13Q3
13Q2
13Q1
12Q4
PwC
12Q3
12Q2
12Q1
0%
A.
Appendix Overview Uganda
Summary
Uganda’s economic freedom score is 61.9, making it the 78th freest economy in the 2012 index. Its score is 0.2
point higher than last year due to improvements in monetary policy and the control of government spending.
The Ugandan economy has weathered the impact of the global economic turmoil well, achieving an average
growth rate above 8 percent over the past five years. Continued economic expansion has been facilitated by
open-market policies related to global commerce. The financial sector is relatively well developed for the region.
Despite some progress, institutional shortcomings continue to undermine prospects for dynamic long-term
economic expansion. Uganda has attempted to update various commercial laws to reduce administrative delays
and the cost of conducting business, but the overall regulatory framework remains poor. An inefficient judicial
system and pervasive corruption are even more serious problems, eroding the effectiveness of government.
Risk assessment
•
Sustained growth but held back by infrastructure deficiencies
Growth will remain strong in 2012. The start of oil exploitation in the Ugandan part of the Lake Albert basin in
the north-west of the country by Total, Cnooc and Tullow Oil will considerably offset the slowing of agricultural
exports to Europe. Agriculture, which employs 70% of the working population, is nevertheless expected to
benefit from better weather conditions than in 2011, which was marked by drought. Construction will be
spurred by works in the energy and oil sectors: oil installations, power stations, dams and pipelines. Reexportation to the Congo and South Sudan will grow. However, growth will be restrained by serious
infrastructure deficiencies, in spite of the operational start-up of a hydroelectric dam on the White Nile
intended to reduce the energy deficit by a third.
•
Economic policy tightening
The year up to the February 2011 elections saw a relaxation of economic policy. The structural public account
deficit deepened with the rise in current spending. Despite fiscal revenues from oil exploration licenses, the
authorities had to resort to advances from the Central Bank. This episode seems to have ended, so current
spending is expected to fall. Fiscal revenues, which represent only 14% of GDP, are expected to increase thanks
to the removal of various exemptions benefitting both businesses and households. These measures are proving
all the more necessary with the launch of Uganda’s five-year National Development Plan in 2010 aimed at
better exploitation of the country’s potential.
Despite the new resources expected from the launch of oil exploitation, domestic financing will be insufficient.
Foreign government aid will be more indispensable than in the past. One third of this aid paid into the state’s
budget is unallocated, but most of it is for infrastructure projects.
•
Persistent current account deficit
The external deficit arises from the substantial trading imbalances. The traditional agricultural exports of
coffee, cotton, tea, tobacco, fish and organic vegetables, though growing, are outweighed by imports of oil
products, equipment for oil exploitation and infrastructure construction. Part of the deficit (30%) is covered by
substantial remittances from Ugandans abroad but most financing is supplied by international government aid
and foreign direct investment. In the future the country is expected to have to resort to ordinary foreign
financing to fund investments to stimulate growth.
PwC
Page 30 of 32
•
Weakened political and security context
President Museveni and his party, the National Resistance Movement, in power since 1986, won the February
2011 elections with a convincing majority against an opposition weakened by division. The opposition is made
up of dissidents from the governing party, which makes for a difficult succession. The surge of inflation in 2011,
due to increased food and fuel prices exacerbated latent social tensions. Demonstrations, sometimes bloodily
suppressed, and strikes multiplied. Urban populations, mostly the young, complain that they are not benefitting
from the modernisation of the economy and suffer under inequality and corruption. Abroad, the Ugandan
army’s intervention in Somalia within the UNO forces, in Central Africa and South Sudan in pursuit of the Lord’
Resistance Army (LRA), enabled restoration of calm in the North.
PwC
Page 31 of 32
B.
Appendix Strategy map
Below depicted framework describes how the different elements of ‘The way in which we deliver our services’
will help service our stakeholders. The black arrows show a relationship, one element influences the other.
Maximize target client lending
Be close to clients
and do business with
the right clients
Finance & Risk
Stakeholder
‘Best practice’ microfinance will ensure a financially healthy company with
large social impact – the right product for the right clients
Provide relevant products to our clients
Provide loans to as
many clients as
possible
Provide a low cost
product
Create additional impact
Provide transparency
and a good customer
experience
Provide loans that are
suitable for our clients
Minimize operational
costs and overhead
Minimize loan losses
Maximize low cost
fundraising
Minimize internal
corruption
Process
Be mobile and provide
offices at the right
place
Provide good,
interactive insight into
results
Have great
sponsoring and
marketing processes
Have an adequate
internal control
framework
Advanced IT
environment
Good, transparent
finance processes
Great Head office staff
People management
Contribute to financial
education
Cost Management
Have a compelling fundraising proposition
PwC
Stimulate cooperative
behavior with clients
Ensure healthy
loans portfolio
Loan process
excellence
Instill good payment
discipline with clients
Simple and fast
application
procedures
Thorough loan
approval process
Consistently good
execution of loan
officer protocols
Great Local staff
Employ great loan
officers that enable
our vision
Provide sufficient
expertise for support
functions
Provide good
governance
Nurture a low cost
culture
Provide adequate
training to local
employees
Employ good local
management
Perform thorough
local recruitment
Be a good employer
Page 32 of 32