After micro-loan boom, Uganda Mobile money firms target business lending
Rapid growth in consumer lending and a relatively light regulatory environment have encouraged mobile money operators to broaden their lending ambitions.
Uganda’s mobile money operators are expanding beyond small consumer loans and targeting farmers, small businesses and other productive sectors; after registering strong growth in digital micro-lending. It is setting the stage for increased competition with commercial banks in the country’s credit market.
Rapid growth in consumer lending and a relatively light regulatory environment have encouraged mobile money operators to broaden their lending ambitions in a market where many low-income borrowers remain excluded from formal credit due to a lack of collateral. Typically, mobile money loans are less than Ush1 million ($237.9), carry repayment periods of fewer than 30 days, and attract interest rates of below 10 percent per month.
