Microcredit

BCDC runs a group-based loan program that offers small loans (i.e. microloans) of between $92 – $400 to rural farmers and shopkeepers in Uganda.  BCDC currently has approximately 850 borrowers in 22 villages and has distributed over $300,000 in loans.

What is microcredit?

Microcredit is the provision of small and collateral-free loans to those that lack access to the formal banking sector.

All BCDC loans are dispersed for a six-month period, are paid in monthly installments, and yield about 9 percent in simple interest. The average starting loan is $92 (U.S. dollars), while some borrowers receive over $400 in later loan cycles.

Why microcredit? 

Since the BCDC was founded, borrowers have utilized their loans in a variety of life-changing ways. Borrowers have built their first brick homes (rather than mud and stick), increased their children’s school enrollment, augmented their assets, including land and animals, and improved their health by eating more nutritious meals.

Why group-based loans?

In place of collateral in the traditional banking sense, borrowers’ loans are conditional on the repayment of their fellow group members. Groups range in size from 5 to 10 individuals.