Umutanguha

What is Umutanguha’s mission?

Umutanguha’s mission is to facilitate access to financial services and accompanying non-financial services to all excluded populations. This includes those living in rural areas with a particular focus on widows, orphans, youth, and women, in order to enable them to save and to create income generating activities through loans. 

What types of financial services does Umutanguha provide?

Umutanguha’s main activities revolve around providing low-income sectors of the population with loans, savings accounts, leasing machinery and equipment, as well as financial education and advice. It generates income through charging interest on loans and round half of Umutanguha's clients are women.

How much interest does Umutanguha charge?

Microfinance institutions (MFIs) charge higher rates of interest for several reasons. Firstly, the administrative costs of making many small loans are much higher than making fewer larger 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. In addition, inflation is generally higher than in countries such as the UK.

The most representative loan product of Umutanguha funded by Lendwithcare attracts an Annual Percentage Rate (APR)* of 26.13%. 

*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 Umutanguha provide any training?

Umutanguha does provide extensive financial education to community and group leaders (particularly young people) who then replicate their learning in their local communities. The specific modules of financial literacy include:

• The importance of savings
• Loan management
• Digital finance
• Entrepreneurship and marketing

Where can I find out more information about Umutanguha?

Further information about Umutanguha is available from 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 **United Nations Development Programme ***World Health Organisation ****World Population Review