Brac Uganda has transformed into Brac Uganda Bank, moving from Tier 4 to Tier 2 tier financial credit institution, giving it the platform to boost its financial services after getting a licence from Bank of Uganda, the regulator of the local banking sector.
Brac Uganda started as a microfinance in 2006 growing its footprint to 163 branches across 84 districts with more than 270,000 clients ensuring greater financial inclusion especially for marginalized women, youth and low income communities.
The institution has been pursuing a change in its regulatory status that would allow it to expand the scope of its financial services. The retransformation will help Brac Uganda Ltd to offer savings accounts, money transfer, insurance and other financial services in addition to its credit products to the people of Uganda.
Speaking at the launch, Gen Ali, the First Prime Minister lauded Brac management over their specific focus on women, youth and rural population, “Am very much pleased that these are also the tree priority areas of the comprehensive strategy that government developed for financial inclusion,” he said.
Gen Ali underscored the importance of affordable and easy access to financial services thus reduce poverty cycle in the country.
The director of microfinance and ultra-poor graduation programme, Shameran Abed said they are committed to improving access to safe reliable and fit-for-purpose financial services through their new banking operation.
“Brac believes that given the right opportunities and tools, people living in poverty can turnaround their own lives.” He said adding that the bank will remain true to its core mission of enabling communities particularly women living in poverty in rural, urban and hard to reach areas so the so that they can realize their potential.
He said their increased range of financial services will enhance self-employment opportunities, build financial resilience and better harness their client’s entrepreneurial spirit.
According to the chief executive officer (CEO) of the bank, Jimmy Adiga, the transition from tier four to tier two will allow them to drive more impactful financial inclusion at an even greater scale.
“Our clients can now have the confidence and trust of saving at a formal institution, a critical component that ensures resilience for a low income households in times of social or economic shocks.”
As part of this transformation process, BRAC has partnered with three mission-aligned investors DEG (Deutsche Investitions-und Entwicklungsgesellschaft mbh), the German development finance institution, Equator Capital Partners, a fund manager investing in financial inclusion and Triple Jump, the Dutch impact investment manager advising the ASN Microkredietpool fund.
Mackay Amau, the Bank of Uganda’s Director for National Payments Systems said the law allows BRAC Uganda Bank to operate as a tier 2 institution under the agent banking law. He said they are drafting the national payment systems bill that will allow them to issue licenses to operators of electronic money like Bitcoin, Dagcoin, Easymoney and others.
According to Bank of Uganda rating, Tier 2s are Credit Institutions but not fully fledged Commercial Banks. BRAC has now joined the likes of Mercantile Credit Bank, Post Bank Uganda, Opportunity Bank Uganda and Top Finance Bank Uganda Limited as a regulated credit institution under Bank of Uganda’s rated Tier 2 banks.
