2014 ANNUAL REPORT EFC UGANDA Vision & Mission our VISION To be the preferred financial services partner for micro and small entrepreneurs (MSEs) in Uganda. our Mission To partner with MSEs and increase access to specialized financial services on a permanent basis while contributing to wealth creation, improvement of people’s living conditions and development of Uganda’s private sector. EFC UGANDA ANNUAL REPORT 1 Who we are EFC Uganda Limited (MDI), which previously operated as EFC Limited, figures among the fastest growing microfinance ins- Part of a strong EFC network titutions in Uganda. Licensed and supervised by the Bank of Uganda, it is committed to contributing to the development of the EFC Uganda and the other Entrepreneurs Financial Centres (EFC) country’s private sector by providing increased access to financial operating in Africa under the model promoted and developed services for the underserved micro and small scale enterprise by DID have established a regional strategy that enables them (MSE) market segment. EFC Uganda is driven by its mission of of- to strengthen their capacities and services offered. By uniting all fering financial services to MSEs on a permanent and sustainable EFCs, this strategy makes it possible to standardize and pro- basis while contributing to wealth creation and poverty reduction. fessionalize transverse functions such as internal auditing and technological systems, governance practices and risk manage- Shareholders include Développement international Desjardins ment. It leads to increased synergies and sharing of resources (DID), which is a subsidiary of Desjardins Group (the leading fi- and contributes to enhancing efficiency, performance and impact nancial cooperative group in Canada), AfricInvest Financial Sector in the communities served. Limited (AFS), Bamboo Financial Inclusion Mauritius, the Belgian Investment Company for Developing Countries (BIO), ASN-Novib Microcredit Fund (managed by Triple Jump) and Uganda Gatsby Trust. All of these shareholders have one thing in common : they are concerned with the socio-economic benefit of Uganda. The shareholders’ contribution has been further augmented by inter- national partners such as Foreign Affairs, Trade and Development Canada (DFATD), FMO and the African Development Bank (AfDB), thus contributing to the strength and success of the organisation. EFC Uganda offers a wide range of products and financial services that are customized to suit the Ugandan market. These include smart cards, commercial and housing loans as well as recently introduced savings accounts which are already showing robust growth. Our lending products run the scope from the Market Women Trader Loans, Home Improvement Loans and Commercial Loans, while our savings products include Regular Savings Accounts, Premium Savings Accounts and Term Deposit Savings. The company presently operates in Kampala with a Head Office, Main Branch and four Business Loan Centers (BLCs). All of them show robust growth and continue to answer our clientele’s needs. Chairperson’s message The year in retrospect I am pleased to present this 2014 Annual Report of EFC Ugan- Central to EFC’s objectives is to place customers at the centre da Limited (MDI) for the year ended 31st December, 2014. This of what we do, and to ensure the continued delivery of efficient, document highlights the outcomes of the strategies and activities quality services to these customers. Indeed during the year, EFC implemented by the organisation’s dedicated team along its third service delivery surveys showed high levels of satisfaction from year of operations, with the full support of its Shareholders and the users of our services – including about the different savings Directors. This annual report also outlines the successes and accounts we now offer. challenges faced by EFC Uganda in 2014. In addition, EFC Uganda staff continued to demonstrate excellent Firstly, I would like to congratulate EFC Uganda upon the acquisi- service quality. The skills and commitment of EFC’s staff are tion of its microfinance deposit-taking institution (MDI) License in fundamental in achieving our desire to provide quality services. November 2014. This breakthrough will make it possible for EFC The Board extends its gratitude to EFC Uganda’s management to mobilize savings and expand the diversity of financial products team and employees for their commitment to making quality made available to Ugandan entrepreneurs. This major milestone financial services more accessible to Ugandan communities and will allow EFC’s customers to build up savings with our institution, to the continued growth and success of EFC. As the organisa- a need they had been clearly expressing since the inception of tion’s Chairperson, I am also committed to making EFC Uganda a EFC’s operations. It will also be beneficial to EFC itself by allowing reference in sustainable financial services delivery. it to access funds in a secure and sustainable manner. Therefore we believe that this innovation will offer significant leverage for Looking ahead, the Board is confident that EFC Uganda’s lea- economic development and self-sufficiency to both EFC and its dership, strategy and people will allow the organisation to conti- customers. nue thriving for the benefit of every stakeholder, and in particular of its customers. After obtaining an MDI Licence, the Board of Directors decided to update EFC Uganda’s strategic plan. This exercise will be un- dertaken over the next months and will ensure that the resources made available to EFC are in line with the organisation’s orienta- tions in terms of development and growth. EFC Uganda’s leaderhip, strategy and people will allow the organisation to continue thriving for the benefit of every Charles Nalyaali stakeholder. Board Chairperson EFC UGANDA ANNUAL REPORT 3 Managing Director’s Message Growth is certainly the most appropriate term to describe the year To comply with our vision of being the « preferred financial ser- 2014. After setting up solid foundations for our organisation, we vices partner for micro and small entrepreneurs », we rely in great have greatly expanded our service offer, Business Loan Center part on our team which is therefore our greatest asset. Because network and team with the purpose of reaching more entrepre- we want to attract, train and retain the best people, we offer our neurs. By doing so, we aim at bringing a greater contribution to employees attractive opportunities and help them achieve their financial inclusion, job creation and economic growth in Uganda aspirations while delivering the best service to Ugandan entre- while building long-term value for all stakeholders. preneurs. This is mainly done through the Individual Develop- ment Plan, which encourages employees to take initiatives while discovering and nurturing skills that they believe are useful for the company. EFC also offers its staff various coaching and education Growth is certainly the most programmes. appropriate term to describe the year 2014. Looking Ahead Every year brings in new challenges and 2014 has not been an ex- ception. As regulatory changes, political uncertainty, market volatility The obtention of our MDI license was paramount for the pursuit and growing competition will continue to challenge us, we know we of our growth. It made it possible to launch a new array of savings can rely on the strength and dedication of our team, shareholders products, namely Regular Savings Accounts, Premium Savings and partners, on the relevance of our strategy and business mix, Accounts and Term Deposit Savings, thus introducing new oppor- and on the close monitoring we carry out on a constant basis in tunities for our customers. But most importantly, this innovation order to smoothly and efficiently adapt when needed. promotes healthy financial habits among our current and future customers, based on planning ahead and saving for future pro- Additionally, in correlation with our growth strategy, EFC Uganda jects. Obtaining our MDI license also lead to the rebranding of the is looking at partnering with different organisations and adopting organisation, now trading as EFC Uganda Limited (MDI). new and innovative measures of doing business in 2015, including money transfers, prepaid credit cards and payment solutions. Over the past months EFC Uganda also increased its geographi- cal outreach in Kampala by launching two new Business Loan In conclusion, I wish to thank our customers for their trust, our Centers in Nansana and Nateete, thus extending its network to Board of Directors, Audit Committee and Management Committee reach additional areas. for their valuable guidance, as well as our shareholders and other partners for their essential support. We will keep working hard to In addition, EFC welcomed Mr. Charles Nalyaali as its new Chair- continue fulfilling everyone’s expectations. person in replacement of Ms. Marisol Quirion. Mr. Nalyaali’s expe- rience as a former CEO of two well-established banks in Uganda and microfinance expert will be most valuable for EFC. I take this Charles Nalyaali opportunity to thank Ms. Quirion for her contribution to the growth Board Chairperson of EFC Uganda over the past years. Positive results At year end assets totalled UGX 12.8 billion, representing a 52% annual growth. Capitalization stood at 64.2 % of the balance sheet while EFC welcomed new financing partners including Symbiotics and Triodos Bank. Loan portfolio amounted to UGX 8.5 billion, representing a 403% annual growth, with 33.8% of outstanding portfolio held by women and a well-controlled portfo- lio at risk standing at 1.37%. Claude Lafond Managing Director During the year, EFC Uganda’s team went from 54 to 86 skilled and dedicated employees with the hiring of new credit officers, public relation officers and business development officers, among others. Nearly half of the team were women and they held 44% of management positions. 2014 at a glance EFC Uganda obtains its deposit-taking license On 10th November, EFC Uganda obtained its MDI (Microfinance Deposit-Taking Institution) license from the Bank of Uganda and was allowed from then to collect savings.