Silver upholders

History

Silver Upholders was founded by Julius Selwambala, a native of Uganda, and "registered in Uganda under the Ministry of Justice and Constitutional Affairs registration certificate No. 102872 on the 31st day of October, 2008 and licensed to provide financial services by the Judiciary under chapter 273 of the laws of Uganda and Statutory Instrument No. 273 – 1." (http://www.silverupholders.org/background-and-history.html) It is a Christian organization that makes small loans to poor women entrepreneurs who would otherwise have no access to credit. Its clients use the money they earn to reinvest in their businesses or families in the form of education, and basic needs like food and clothing etc. Since its founding in 2008, Silver Upholders has expanded by opening three branches to compliment the headquarters in Maganjo (a neighborhood in Kampala).

Lending Process

Silver Upholders makes group loans to women. (The Uganda Microfinance Directory, 2011/12, Fifth Edition, AMFIU, The Association of Microfinance Institutions of Uganda) These group loans are the key to the success of the company as a lending institution. Because of these groups, Silver Upholders is able to pass on much of the cost of administering and monitoring its loans to the clients themselves, who must (among all of them) produce the weekly repayment regardless of a default by an individual member of the group. This keeps the default rate of the groups very low, for the women themselves apply pressure to defaulting members to pay.

Interest Rates

Silver Upholders lends out at 20% on a 20 week loan. This may sound extremely high given the poverty level of the clientele, however Silver Upholders insists it is one of the best offers available in the region. Given that the inflation rate is currently 28% in Uganda, and that the Bank of Uganda is lending at 26% to the country's major financial institutions, 20% is a reasonable rate. (http://www.bou.or.ug/bou/rates_statistics/statistics/interest_rates.html) Silver Upholders is able to provide a lower rate because of private investment, and the Ugandan Government's subsidies to microfinance organizations that provide cheaper funds to the organization.

(http://www.bou.or.ug/bou/rates_statistics/statistics/interest_rates.html)

Statistics: Silver Upholders has a client base of approximately 1100 with 100 active borrowers. Its average first loan size is 300,000 Ugandan Shillings. Its average loan size is 400,000, with a minimum of 200,000, and a maximum of 800,000 USH. Its loan repayment rate is about 97%. (The Uganda Microfinance Directory, 2011/12, Fifth Edition, AMFIU, The Association of Microfinance Institutions of Uganda)

Business Funding

Silver Upholders funds mostly retail projects including fruit stands, clothing shops, animal farming, etc. In addition, many of the loans go directly to purchasing fixed assets like sewing machines and the wood for pig pens, or inventory for a food shop. In the company's own words, "Most of our clients make their living in the informal economy as hairdressers, bakers, seamstresses, and “petty” traders, selling goods from tables and tiny kiosks or carrying them from place to place. With Silver Upholders' capital, they are able to increase or diversify their inventories. They can buy in bulk, decreasing their time away from work traveling to buy supplies. Profits accrued are immediately invested in better nutrition, healthcare, and education for themselves and their children." (http://www.silverupholders.org/where-we-work.html)

Authenticity Certifications

Silver Upholders is a member of AMFIU (The Association of Microfinance Institutions of Uganda), The Microfinance Information Exchange, (MIX Market) a source for microfinance data and analysis, and mftransparency, which promotes the welfare of poor micro-entrepreneurs and monitors the integrity of its member organizations. (http://www.silverupholders.org/affiliations-and-partnerships.html)

In addition, Silver Upholders is affiliated with PACE health organization, inuka.org, and the 1% club. (http://www.silverupholders.org/affiliations-and-partnerships.html)

Challenges

Silver Upholders is still very small. Because of this, it has limited ability to make large loans to worthy clients, which means that expansion of the businesses is not as great as it could be, and stifles economic growth. It also is not able to provide business education services to its clients. Silver Upholders is working to increase donations from outside sources, both domestic and abroad, in order to undertake initiatives which will make its system run as efficiently as possible. For example, the company is hoping to create programs to help educate clients on successful business practices, which will ensure that loans are used as efficiently as possible.