Pride Microfinance Limited (Mdi)
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PRIDE MICROFINANCE LIMITED (MDI) 1 Pride MicroFinance Limited Annual Report CORPORATE PROFILE Who we are, Mission and Strategy 3 Your Growth is our Pride (Customers’ testimonies) 6 Board of Directors 7 Senior Management 8 Directors’ Report 9 Chairman’s Statement 11 Statement of Directors’ responsibilities 14 Contents Financial Highlights 16 Report of the Independent Auditor 17 Financial Statements 19 Contact Information 23 PML Branch Network 24 Abbreviations / Acronyms PML Pride Microfinance Limited MDI Microfinance Deposit-taking Institution CSR Corporate Social Responsibilities IT Information Technology Pride MicroFinance Limited Annual Report 2 Contents CORPORATE PROFILE CORPORATE PROFILE WHO WE ARE Pride Microfinance Limited (MDI) (PML) is a Microfinance Deposit Taking Institution regulated and supervised by Bank of Uganda. Since 1995 PML has been a cutting- edge financial services provider to hundreds of thousands of Ugandans in the field of Microfinance. VISION To be the leading Micro Finance Deposit-Taking Institution with the largest branch network, best portfolio quality and customer service in Uganda. MISSION To provide financial services to small, medium and upscale entrepreneurs through profitable operations that foster growth of both internal and external customers. CORE VALUES • Responsive and Responsible governance • Honesty, Integrity and Accountability • Excellency and Transparency • Efficiency and Effectiveness • Team Work and Customer Sensitivity • Equal Opportunity Employer OWNERSHIP PML is 100% owned by Government of Uganda. CORPORATE STRATEGY The focus for the next five years will be growth that will mainly come from consolidation and increased penetration within the targeted market segments for PML’s core product lines as stated below: • Intensive portfolio growth with limited product menu. • Aggressive mobilization of deposits which will be intermediated to provide funding for the growing portfolio. • Obtaining more long-term loan funds from various lenders to finance portfolio growth and have a diversified source of funding. • Research, product innovations and modifications of the existing products and services so that they are more tailored and custom designed to fit the ever changing needs and requirements of PML’s clientele. • Ploughing back all profits to finance portfolio growth. • Acquiring a new centralized software package to enable PML provide networked banking to its clients and move to the next level. • Training staff to ensure maximum productivity, efficiency and effectiveness. • Review individual performance targets for staff to enhance maximum productivity. 3 Pride MicroFinance Limited Annual Report CORPORATE PROFILE WHAT WE DO As a Microfinance Deposit-taking Institution, we have a range of both deposit and loan products designed to cater for financial needs of people in Uganda especially the micro, small and medium entrepreneurs. We also have money transfer services through Western Union. These products include: Deposit Products • Pride Smart Savings Account • Pride Akiba Savings Account • Fixed Deposit Account • Minor’s Savings Account • Group Savings Account • LIF ( Loan Insurance Fund) Loan products • Group Guaranteed Loans • Individual Loans • Salary Loans Proposed products • Asset Financing Loan Other services • Western Union Money Transfer • Insurance against death, disability and catastrophies for all loan clients. 4 Pride MicroFinance Limited Annual Report MAKINGMAKING BANKING BANKING EASY EASY A customer being served at PML using the biometric finger print reader The biometric finger print reader is a system that reads your finger-print in order to access personal information on your account. With this system our customers do not have to write deposit and withdrawal slips. This has made banking easy, faster and secure for them hence encouraging them to save. 5 Pride MicroFinance Limited Annual Report “YOUR GROWTH BOARD OF DIRECTORS IS“YOUR OUR GROWTH PRIDE” IS OUR PRIDE” CUSTOMER’S TESTIMONIES Ms. Kyomugisha Margaret, Head Office Branch Customer I had always stood in queues for hours waiting to either “withdraw or bank my money which made me very uneasy. But since I joined Pride Microfinance Ltd I usually take less than two minutes in the banking hall which gives me more time to be in my business and plan for it. This speed of work also extends to their loan’s department because the first time I applied for a loan at Pride, I was not their customer at that time but it only took 4 days to process my loan. I have acquired more loans from them since then which have helped me to grow my business and my self. I recently bought a plot of land using the loan I got from Pride.” Mr. Lubulwa Ibrahim, Owino Market Before Pride Microfinance Ltd came to us, I did not think that a “businessman like me from Owino market could benefit anything from formal financial institutions. However through their Group Guaranteed Loan Scheme, I got my first loan without pledging any formal security which opened doors for me. These loans have helped me grow my business, acquire land and build a house where I live now. I have also purchased a second plot of land and life is now much better. Pride Microfinance Ltd is very reliable and responsive to our needs. The idea of not writing deposit or withdrawal slips is very convenient because it saves time.” 6 Pride MicroFinance Limited Annual Report “YOUR GROWTH BOARD OF DIRECTORS IS OUR PRIDE” BOARD OF DIRECTORS Enoch Rukidi Monica K. Mugenyi Board Chairman Chairperson Risk and Credit Committee Maris Wanyera Peter Gachuba Chairperson Human Resource Chairman Finance & Procurement Development & Administration Committee Committee Paul K. Musoke Constance Makosya Managing Director Chairperson Audit & ALCO Committees 7 Pride MicroFinance Limited Annual Report SENIOR MANAGEMENT SENIOR MANAGEMENT Paul K. Musoke Veronicah Gladys Namagembe Managing Director Ag. Deputy Managing Director and Head of Operations Gerald Kikambi Rehema N . S Mutazindwa Head of Finance Head of Human Capital Management Peter Okwakol Samuel Baguma Head of Audit Head of ICT 8 Pride MicroFinance Limited Annual Report DIRECTORS’ REPORT DIRECTORS’ REPORT 1. PRINCIPAL ACTIVITIES The Company takes deposits from the public and various Institutions and provides advances to customers. 2. MARKET RISK Market risk exists wherever PML has taken credit extension, banking and investment positions. Banking and investment limits are set by the Board to contain the risk of losses within a prescribed amount in the event of adverse price movements. 3. CAPITAL ADEQUACY The company monitors the adequacy of its capital using ratios advised by Bank of Uganda. These ratios measure capital adequacy by comparing the company’s eligible capital with its balance sheet assets, off-balance-sheet commitments and market and other risk positions at a weighted amount to reflect their relative risk. Capital Requirement Basis: Core capital required is 15% of the total risk weighted assets including the risk weighted contingent claims. Total capital required is 20% of the total risk weighted assets including the risk weighted contingent claims. PML Capital Ratios: Risk Risk Balance Sheet Weighted Balance Sheet Weighted Nominal Nominal Amount Amount (UGX ‘000) Amount (UGX ‘000) Amount 2008 2008 2007 2007 Capital Capital Ratio Capital Ratio Ratios Core Capital 10,809,972 23% 9,507,018 25% Total Capital 15,516,204 33% 14,049,421 36% The above computation indicates that PML complies with the capital adequacy requirements under Sections 15 and 16 of the Micro Finance Deposit Taking Institutions Act, 2003. 9 Pride MicroFinance Limited Annual Report DIRECTORS’ REPORT 4. RESULTS The results for the year are set out on page 19. 5. DIVIDENDS The directors do not recommend payment of any dividend for the current year. (2008: Nil) 6. RESERVES The reserves of the company are set out on page 21. 7. DIRECTORS The directors who served during the year and to the date of this report were: - Mr. Enoch Rukidi - Chairman Mrs. Monica Mugenyi - Director Mrs. Constance Makosya - Director Mr. Peter Gachuba - Director Ms. Maris Wanyera - Director Mr. Paul K. Musoke - Managing Director 8. AUDITORS KPMG who were appointed during the year have expressed their willingness to continue in office in accordance with section 159 (2) of the Companies Act. This is also in accordance with the MDI Act, 2003. 9. APPROVAL OF FINANCIAL STATEMENTS The financial statements were approved by the directors at a meeting held on ......................................2009 By order of the Board Signed………………………………… Date: …………………………… SECRETARY 10 Pride MicroFinance Limited Annual Report CHAIRMAN’S STATEMENT CHAIRMAN’S STATEMENT s Pride Microfinance Limited (MDI) (PML) looks ahead to the challenges caused by the Global Economic Crisis, it is encouraging Ato report that it faces the future from a strong and solid point. During 2008, the institution realized satisfactory results overall, with profit before tax being UGX 3.42 Billion. Our loan and savings portfolios grew by 23% and 33% respectively. MACRO ECONOMIC ENVIRONMENT For 2008, the cost of doing business in Uganda increased with the increase in interest rates. This situation has been worsened by increasing fuel costs and inflation rates that have generally affected our clients’ business growth. The volatility in the Interest rates Enoch Rukidi was mainly caused by the “credit crunch” that Board Chairman originated from USA and is a key example of the effects of globalization. This has consequently resulted into changes in the