While it was good news that deposits by micro-finance institutions have gone up, it is equally important that such institutions increase lending to small scale businesses to ensure sustainability and expansion
One way of promoting job creation, is through increased access to funding by micro finance institutions, to small scale traders and the rest of the rural citizenry.
Small scale businesses have the capacity to absorb new entrants to the ever expanding labour market. The implication is that support to the micro-finance sector is more critical at this time, when calls for more jobs for the youth have been stepped up.
It is good news that the larger, more formal financial system is based on prudent policy measures as exhibited by the current healthy earnings reported by the licensed commercial banks.
However, that being the case, building the capacities of the micro-finance sector should be given more attention this fiscal year so that access to funding for more rural economic activities can become a reality.
One area that requires particular attention is the Umurenge sacco system, which, as a home grown initiative, is actually meant to bring the un-banked closer to the formal banking system.