This document summarizes a webinar on promoting transparent pricing in the microfinance industry in Uganda. It discusses a project sponsored by the MasterCard Foundation to collect pricing data from 22 institutions in Uganda and analyze it. The analysis found variations in interest rates and fees across loan products and institutions. It also identified issues like compulsory savings and lack of disclosure. The webinar made recommendations to improve transparency, including standardized repayment schedules and financial literacy programs. Attendees were encouraged to get involved by endorsing the project's mission, educating others, or participating in future country projects.

1. Promoting Transparent Pricing in the Microfinance Industry Uganda Data Launch Hosted by MFTransparency and AMFIU Webinar July 27, 2011

3. Transparent Pricing Initiative in Uganda The enabling APR & EIR Program is sponsored by: Thank you to our local partner in Uganda:

4. AMFIU: Opening Remarks

5. Participating Institutions

6. Transparent Pricing Initiative in Uganda

7. Type of Institution (22 Institutions)

9. Loan Purpose (59 products)

10. Eligibility

11. Lending Methodology

12. Other Services Offered

13. Repayment Frequency

14. Reasons for Variations in Price 16 products have a range of interest rates

15. Interest Calculation Method

16. Fees & Insurance All products (100%) have a fee 36% of all fees are for the purpose of insurance

17. Fees & Insurance

18. Compulsory Savings 33 products out of 59 require compulsory savings Of the 33 products that require savings, 2 disclosed the amount of compulsory savings on the repayment schedule For 11 products, borrowers control savings internally

19. Pricing Calculations

20. Interest Rate Calculations

21. APR Ranges by Institution Type

22. APR Ranges by Loan Purpose

23. APR Ranges by Rural/Urban

24. MFTransparencyInteractive Price Graphs

25. Filter Graphs:Loan Size

26. Filter Graphs:Number of Clients

27. Filter Graphs:Loan Term

28. Filter Graphs:Loan Purpose

29. Filter Graphs:Institution Type

30. Filter Graphs:Interest Rate Type

31. Filter Graphs:Interest Rate Formula

32. Price GraphsAPR (Int + Fees + Insurance)

33. Products with > 50 Active Borrowers

34. Products with > 50 Active Borrowers Loan Amount < 5,000,000 UGX

35. Products with > 50 Active BorrowersInstitution Type: Privately-owned for-profit

36. Products with > 50 Active BorrowersInstitution Type: NGO

37. Products with > 50 Active BorrowersInstitution Type: Cooperatives

38. Products with > 50 Active BorrowersPurpose: Business

39. Products with > 50 Active BorrowersPurpose: Education

40. Products with > 50 Active BorrowersPurpose: Consumption

41. Products with > 50 Active BorrowersPurpose: Housing

42. Products with > 50 Active BorrowersInterest Calculation Method: Flat

43. Products with > 50 Active BorrowersInterest Calculation Method: Declining Balance

44. Summary Institution cost structure: Every institution has a unique cost structure which requires a unique pricing strategy. Product cost structure: Different loan products can have significantly different cost structures. It is therefore necessary to look at each loan product individually when assigning loan prices. Limitations of portfolio yield: If we do not analyze costs and prices on a product-by-product basis, our overall portfolio yield may be positive, but some individual products not profitable. This can cause sustainability problems in the future. Remember: Each product is unique and requires a distinct pricing strategy.

45. Recommendations

46. Loan Documentation: Considerations

47. Loan Documentation: Case Study Gatsby Micro Finance Ltd – an example of transparent loan documentation

48. Loan Documentation: Case Study Gatsby Micro Finance Ltdis commended for the disclosure on its loan documentation of: All charges at application (e.g. registration fees, loan commission, application fees) All charges at disbursement ( e.g. registration fees, loan commission) Annual interest rate charged Interest rate method used Grace period and interest charged during grace period Cash flow, differentiating between the principle, interest, penalty, total repayment and total balance

49. Resources: Recommended Repayment Schedule Template

50. General Recommendations

51. Financial Literacy Program

52. Questions & Answers

53. Ways to Get Involved Endorse MFTransparency. More than 800 individuals and organizations have signified their support in principle of MFTransparency's mission by becoming an endorser. Add your name to the list: http://www.mftransparency.org/endorsements/form/ Educate about transparent pricing. MFTransparency develops and disseminates educational resources covering a range of topics related to transparent pricing. These materials are all available free of charge through the Resources Library on our website. Participate in country projects. We work with government agencies, networks, associations, donors, investors, academics and other stakeholders in every project country and always welcome new partnerships. MFIs can also actively participate by submitting their data when MFTransparency launches the Transparent Pricing Initiative in their country.

54. Promoting Transparent Pricing in the Microfinance Industry