About U&I Microfinance Bank

What is U&I Microfinance Bank's mission?

U&I Microfinance Bank's mission is "to provide micro credit solutions to positively transform the lives of our customers and other stakeholders by offering high quality financial services."

What types of financial services does U&I Microfinance Bank provide?

Since U&I Microfinance Bank has a national microfinance banking license, the organisation can offer a pretty comprehensive suite of services to its customers. Their main services are loans and savings, but they also offer remittance and mobile money services, and the Bank also facilitates access to various types of insurance products for its customers, including vehicle, life and health insurance. A significant proportion of U&I Microfinance Bank's customers are engaged in the transportation industry and often request loans to invest in physical assets to support their businesses. As a result, the average loan size of the Bank is just under £5,000 and the average loan term is 36 months. A smaller proportion of borrowers are involved in food, retail and farming and typically seek smaller loans, often in the range of £600 to £3,000, with terms between 12 and 36 months. The Bank is committed, with Lendwithcare support, on expanding their outreach to more rural customers engaged in agriculture and to develop loan products that support environmentally sustainable practices.

What is the cost of borrowing from U&I Microfinance Bank?

Microfinance institutions (MFIs) charge higher rates of interest for several reasons. Firstly, the administrative costs of making many small and high-risk loans are much higher than making fewer larger and collateralised loans; secondly, they take more time assessing the feasibility of applications and thereby reducing risk because borrowers cannot offer traditional forms of collateral nor do they have salaried incomes; thirdly, MFIs often operate in geographically remote areas with low population densities and this means that they incur greater operational costs; and fourthly they often accompany loans with a range of training and technical advice. The most representative loan product of U&I Microfinance Bank funded by Lendwithcare attracts an Annual Percentage Rate (APR)* of 40.5%.

*The Annual Percentage Rate (APR) is a standard way of expressing the cost of a loan that allows for comparison between loans. It includes annual interest, insurance, and fees that the borrower must pay, and is expressed as a percentage of the amount borrowed.

Does U&I Microfinance Bank any training?

Yes, U&I Microfinance Bank offers financial literacy training to its customers on a quarterly basis and environmental training once a year. Their financial literacy training programme includes topics on personal finance management, savings, loan management, investment, insurance and planning for retirement. Whereas their annual environmental training programme includes topics such as, adapting to climate change, waste production and management, and deforestation, land degradation and protecting biodiversity.

Where can I find out more information about U&I Microfinance Bank?

Further information about U&I Microfinance Bank is available at the organisation's website here.

*PAR30 is a commonly used metric that provides an insight into the quality of an MFI's loan portfolio, which is generally its major asset and therefore its greatest source of risk. It is computed by dividing the amount of delinquent loans greater than 30 days over the total amount of the loan portfolio.

Sources: *World Bank 2023 **United Nations Development Programme 2024 ***Statista 2024