Schmidt, Oliver (2012): Uganda's microfinance policy regime: An exploratio through a political-economy framework.
Download (212kB) | Preview
In 2005, Uganda’ government fundamentally shifted the direction of its microfinance (MF) policy. Hitherto it had focused on integrating MF institutions into the financial sector, allowing them to take deposits. Since 2005, it focuses on savings and credit cooperatives (SACCOs); with government funding of and ostensibly interfering in the SACCOs’ operations. This paper explores the reversal of policy direction, drawing on public choice theory. It finds that the shift of policy direction served the objectives of Uganda’s politicians to maintain political power, as it offered them an avenue to create loyalty through patronage. MF special interest groups – particularly development agencies – had chosen a strategy based on information and financial contributions that failed to incite politicians and to maintain univocal support from technocrats and MF practitioners.
|Item Type:||MPRA Paper|
|Original Title:||Uganda's microfinance policy regime: An exploratio through a political-economy framework|
|Keywords:||Political Economics; Microfinance; Policy; Uganda; Regulation; Policy Making; Economic Develoopment|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa
D - Microeconomics > D0 - General > D02 - Institutions: Design, Formation, Operations, and Impact
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D78 - Positive Analysis of Policy Formulation and Implementation
|Depositing User:||Oliver Schmidt|
|Date Deposited:||04. Nov 2012 15:00|
|Last Modified:||22. Aug 2015 16:32|
Agabalinda, C., 2012. Sustainability Prospects of Government Supported SACCOs, Presentation at Makerere University Business School’s 1st Annual Microfinance Workshop, 28 and 29 February 2012. Kampala: MUBS.
AMFIU, 2008. Uganda Microfinance Industry Assessment. Kampala: AMFIU.
AMFIU, 2006. Ten years of AMFIU (1996-2000). Kampala: AMFIU.
AMFIU, 2005. Regulating and Strengthening tier 4 Microfinance Institutions in Uganda – Background Studies, Kampala: AMFIU.
Akandwanaho, C., 2007. Strategy for Rural Financial Services, Presentation at the public expenditure review workshop, 8 May 2007. Kampala: MoFPED.
Akerlof, G. and Shiller R., 2009. Animal Sprits – How Human Psychology drives the Economy and Why it matters for global Capitalism. Princeton, NJ: Princeton University Press.
Besley, T., 2006. Principled Agents? The Political Economy of Good Government, The Lindahl Lectures, Oxford and New York: Oxford University Press.
BoU, 2004. The Micro Finance Deposit-taking Institutions (Licensing) Regulations, in: Statutory Instruments Supplement No. 34 to The Uganda Gazette, No. 53, Vol. XCVII dated 15 October 2004. Entebbe: UPPC.
Byaruhanga, C, Henstridge, M. and Kasekende L., 2010. Exchange Rate, Fiscal, and Monetary Policy, In Kuteesa, F., Tumusiime-Mutebile, E., Whitworth, A. and Williamson, T. (eds.), Uganda’s Economic Reforms – Insider Accounts. Oxford and New York: Oxford University Press, pp. 52-88.
CGAP, 2012. Our Work – Government and Policy Available at http://www.cgap.org/p/site/c/govt/ [accessed on 3 March 2012].
CGAP, 2004. The Role of Governments in Microfinance. Donor Brief No. 19, June 2004, p. 2.
Collier, P., 2009. Wars, Guns and Votes – Democracy in Dangerous Places. London: Vintage.
Dasgupta, P., 2000. Economic Progress and the Idea of Social Capital. In Dasgupta, P. and Serageldin, I. (eds.), Social Capital – a Multifaceted Perspective. Washington D. C.: World Bank.
Fritsch, M., Wein, T. And Ewers, H.-J., 1999. Marktversagen und Wirtschaftspolitik, 3rd edn, Muenchen: Franz Vahlen.
Furubotn, E. G. and Richter, R., 1997. Institutions and Economic Theory: An Introduction to and Assessment of the New Institutional Economics. Ann Arbor: University of Michigan Press.
Godwin-Groen R. Bruett, T. and Latortue, A., 2004. Uganda Microfinance Sector Effectiveness Review, Available at www.fsdu.or.ug/pdfs/Uganda_Microfinance_Sector_Review.pdf, [accessed on 22nd October 2011].
Grossman, G. M. and Helpman, E., 2001. Special Interest Politics.Cambridge, MA: MIT Press.
Hirschmann, A. O., 1970. Exit, Voice and Loyalty, Responses to Decline in Firms, Organizations, and States. Cambridge, MA: Harvard University Press.
Kahneman, D., 2011. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux.
Kamuhanda, R. and Tanburn, J., 2005. Making Service Markets Work for the Poor – the Experience of Uganda. Kampala: ILO and DFID.
Kirsch, G., 2004. Neue Politische Oekonomie, 5th edn. Stuttgart: Lucius and Lucius.
Langguth, G., 2009. Kohl, Schroeder, Merkel – Machtmenschen. Muenchen: DTV.
Meredith, M., 2006. The State of Africa – A History of Fifty Years of Independence. London: Free Press.
Millinga, A. 2007. ‘Microfinance Policies and Regulatory System in Tanzania – Practitioner Perspective’, Presentation at the 3rd Africa Microfinance Conference, August 2007, Kampala, www.fsdu.or.ug (web site), date accessed 3 March 2012.
Minogue, K., 1995. Politics – A Very Short Introduction. Oxford and New York: Oxford University.
MoFPED, 2005. Microfinance Policy and Regulatory Framework in Uganda 2005-2015, Available at www.finance.go.ug/docs/Introduction_to_Microfinance_bklet.pdf, [accessed on 20th October 2011].
Muhumuza, W., 2007. Credit and Reduction of Poverty in Uganda. Kampala: Fountain Publishers.
Muzigiti, G. and Schmidt, O., 2010. Careers in the Banking and Microfinance Industry in Uganda. In Karugaba, D. and Schmidt, O. (eds.), Career Perspectives in Accounting, (Micro) Finance and other Sectors, Yearbook of MMU School of Business and Management Studies, Vol. 1, Fort Portal.
Mwenda, A., 2010. Uganda’s Politics of Foreign Aid and Violent Conflict: The Political Uses of the LRA Rebellion. In: Allen, T. and Vlassenroot K. (eds.) The Lord’s Resistance Army: Myth and Reality. London: Zed Books.
Niskanen, W. A., 1975. Bureaucrats and Politicians, Journal of Law and Economics, 18; quoted by Kirsch, op. cit.
North, D., 1990. Institutions, Institutional Change and Economic Performance. Cambridge, UK: Cambridge University Press, p. 3.
RFSP (2009). Rural Financial Services Programme. In AMFIU (ed.): The Uganda Microfinance Directory 2009/10, Kampala.
Robinson, M., 2001. The Microfinance Revolution – Sustainable Finance for the Poor. Washington D. C.: World Bank.
Rutherford, R., 1999. The Poor and their Money – An Essay about Financial Services for Poor People, Institute for Development Policy and Management. Manchester: University of Manchester.
Schmidt, O., 2012. Microfinance in Uganda: 2012 and beyond, Presentation at Makerere University Business School’s 1st Annual Microfinance Workshop, 28 and 29 February 2012. Kampala: MUBS. Available at http://mmumf.wordpress.com (web site) [accessed on 31st May 2012].
Schmidt, O., 2011. Association – Concept, Management, Context. Saarbruecken: VDM.
Schmidt, O., 2008. Finanz- und Bankenmaerkte in Niedrig-Einkommenslaendern: Erfahrungen aus Uganda, Ostafrika. Wirtschaftswissenschaftliches Studium, Vol. 37, Issue 2 (2/2008), pp. 95-99.
Stratmann, T., 1997. Logrolling. In Mueller, D. C. (ed.) Perspectives on Public Choice – A Handbook. Cambridge, UK: Cambridge University Press, pp. 322-341.
Tripp, A. M., 2010. Museveni’s Uganda – Paradoxes of Power in a Hybrid Regime. London and Colorado: Lynne-Rienner Publishers.
Tumusiime-Mutebile, E., 2010. Institutional and Political Dimensions of Economic Reform. In Kuteesa, F., Tumusiime-Mutebile, E., Whitworth, A. and Williamson, T. (eds.), Uganda’s Economic Reforms – Insider Accounts. Oxford and New York: Oxford University Press, pp. 35-51.
Wintrobe, R. , 1997. Modern bureaucratic theory. In Mueller, D. C. (ed) Perspectives on Public Choice – A Handbook. Cambridge, UK: Cambridge University Press, pp. 429-454.
Whitworth, A, and Williamson, T., 2010. Overview of Ugandan Economic Reform since 1986. In Kuteesa, F., Tumusiime-Mutebile, E., Whitworth, A. and Williamson, T. (eds.), Uganda’s Economic Reforms – Insider Accounts. Oxford and New York: Oxford University Press, pp. 1-34.
Wolff, P., Distler, M., Drochner, M., Meise, J., and Schmidt, D. 2011. ‘Regulation of SACCOs in Kenya – Case Study of the Country Working Group Uganda’, German Development Institute (GDI), (Bonn: unpublished).